CASE STUDY
How Cummins Developed Strategic Decision-Making Skills in Managers with Capsim
As a global powerhouse in diesel engines and related technologies, Cummins’s markets are incredibly diverse. From the oil fields of the Middle East to the mines in Western Australia to the freeways of North America, the company’s products are put to work around the world and maintained by a vast network of affiliated service centers, each with varying needs.
In the matrix organization, managers work together across boundaries to develop and implement strategy across many different markets, cultures and economies. It is critical that all managers understand their responsibility for strategic implementation.
With the goal to ensure strategy generation anywhere—from local markets to corporate headquarters—and to clearly define lines of responsibility, the executive team began developing a training plan to roll out across the country.
Cummins asked Capsim to develop the strategic decision-making skills of its managers. At the corporation’s headquarters a pilot program was introduced to most of its senior management team in North America. Overseen by the chairman, CEO, VP of strategy, and CFO, Capsim’s simulation with its practical blend of theory andpractice became an integral part of the development process.
Expanded internationally, the three-day program is planned around the executive team’s schedules. The group outlines the organization’s recent strategic challenges, the planning process, and defines the responsibilities for strategy within the company. After intense competition between participants in the simulation, the executives return to watch each team deliver a final debrief.
“Cummins is in a strong position in terms of management and products,” Capsim instructor Paul Brennan said, “but they have to be constantly alert to disruptive competitors in any of their product or geographical segments. The simulation makes management aware that they are all responsible for maintaining the strategic direction.It also helps each member of the team stay engaged and accountable for the overall mission.”
Each strategy seminar—whether it’s held in India, China, South Africa, Brazil or in the U.S.—includes senior managers from all sections of the business.
“Through our partnership with Cummins, we play the role of both coach and expert,” Paul said. “We use the platform to train, but also as a way to add value to the strategic process. With the executive team overseeing the final debriefs, our seminars provide an opportunity for management evaluation in a strategic context.”
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