Caterpillar's engineers wanted certainty. Business meant deciding without it.

Technical expertise runs deep at Caterpillar. The trouble started when its engineers and technical staff moved into management: they didn't yet think like businesspeople, and they didn't know the company's financial model well enough to make the commercial and strategic calls the role now demanded. So Caterpillar brought in Capsim to raise the quality of those decisions.

When the best analysts have to decide

None of it was a matter of intelligence. An engineering culture is built to solve a different kind of problem than a business one.

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. The ability to deal with uncertainty and ambiguity in making decisions challenges businesses regardless of the industry.Craig Watters, Ph.D., Capsim

You can't lecture someone into deciding under uncertainty. You have to put them there.

A business, in their own numbers

Capsim tailored a series of three-day, onsite seminars: a full-immersion experience across finance, operations, marketing, forecasting, competitive analysis, and strategy. Teams run a simulated company over six years, with a debrief after each round to make sense of the results. The pace is fast, the competition aggressive, and the clock always short, which is the point. It forces the calls the classroom never does. And Capsim mapped the simulation onto the metric Caterpillar already runs the business by, so participants weren't learning generic finance. They were learning theirs.

Many of the benchmarks in the simulation fit neatly into Caterpillar's overall financial outcomes model, called Operating Profit after Capital Charges, or OPACC.Blaine McCormick, Ph.D., Capsim

Running the business simulation in Caterpillar's own financial language is what made the learning transfer. A decision in the sim carried the same consequence it would carry in a real Caterpillar review.

The habit of deciding

The habit stuck. Caterpillar used the simulation to build business acumen in its high-potential staff, and participants left able to 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. Understanding financial statements, the corresponding ratios, and how decisions made in one area affect every other area in the company are the clear takeaways.Blaine McCormick, Ph.D., Capsim

The partnership went a step further. Caterpillar and Capsim built a second program to put precise data behind it, measuring each participant on how well they understand fundamental business principles and can apply them. It surfaces individual strengths and gaps, and points to what each person should develop next. The business simulation built the judgment; the measurement program proved it.