Caterpillar Improves Business Acumen in Emerging Leaders With Capsim


Case Study – Caterpillar
The Challenge 

While technical expertise can play a large role in the success of Caterpillar’s workforce, they also need to think like business people and make decisions on commercial and strategic issues in a team environment.

Caterpillar discovered its engineers and other technical staff struggled when they moved into managerial positions. Those employees lacked an understanding of business principles and the corporation’s financial outcomes model. So the company turned to Capsim for a training solution to boost the quality of managerial decision-making.

“Caterpillar management understood that in an engineering culture, the need for extensive, accurate, and detailed information before moving forward on decisions often conflicted with the business world’s need for speed,” Capsim’s Craig Watters Ph.D., remembers. “The ability to deal with uncertainty and ambiguity in making decisions challenges businesses regardless of the industry.”

The Solution

Caterpillar chose Capsim to tailor a series of three-day, onsite seminars focused on developing business acumen. Designed as a complete immersion experience in management from all angles, the program addresses key issues critical to Caterpillar’s business—finance, operations, marketing, forecasting, competitive analysis and strategy.

Participants are placed in teams to run their simulated companies mimicking six years. A debrief occurs between each round to highlight simulation results. “Many of the benchmarks in the simulation fit neatly into Caterpillar’s overall financial outcomes model called Operating Profit after Capital Charges (OPACC),” Capsim instructor Blaine McCormick, Ph.D., says.

Because the training is fast-paced with aggressive competition, strict time constraints and the need to rely on the team as a whole, it provides a real-life learning experience in management.

The Outcome 

Caterpillar continues to use our business simulation to build business acumen in its high-potential staff. The training helps participants frame their proposals and ideas in clear business terms.

“Each participant gains first-hand experience in making the types of decisions their own senior management wrestle with every day,” Blaine states. “Understanding financial statements, the  corresponding ratios, and how decisions made in one area affect every other area in the company are the clear takeaways.”

Due to the program’s success, Capsim and Caterpillar introduced a new program to provide precise data on the company’s return on investment. Each participant is measured on his or her understanding of fundamental business principles and the ability to apply them. Not only does the course highlight each individual’s strengths and weaknesses, but it also identifies participants' future training needs.

Discover the products Caterpillar integrates to build future business leaders.

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