AUSTIN, Texas — Back in 2000, Bjorn Billhardt was a student at Harvard Business School, where he was struggling to understand some basic concepts of macroeconomic policy.
So he built a simple simulation program that let him and fellow students experiment with economic variables outside of the lecture hall.
A professor liked it so much she asked for a simulation on supply chain management, where students could run a factory and learn as they went along.
It was such a hit that the business school hired Billhardt to create more interactive learning programs. With Harvard as his first client, Billhardt founded online training company Enspire Learning.
Today, Enspire provides online business simulations and leadership development programs to customers including the University of Texas, USAA, GE and Southwest Airlines. It has worked with 60 Fortune 500 companies, and has done simulations with Fortune 1000 companies in more than 20 countries, including the United Kingdom, Singapore, China and Iraq.
“People learn best through experience and practice,” Billhardt said. “You can passively listen to a management consultant, but you’re not going to become a better manager. Making mistakes and learning from a simulation is far better than failing in the real world.”
The most effective training, Billhardt says, involves competition. “If given the choice, who wouldn’t rather play a game instead of listen to a PowerPoint presentation? Having teams go up against each other is powerful motivator for people to test and hone their skills.”
In Enspire’s management development programs, which usually last a full workday, employees are broken into teams that compete against one another in a virtual world to build a successful business or launch a new product.
Players use computers or tablets to take part in the simulation, which includes interacting with pre-recorded actors playing employees and other workplace roles. The simulation selects from 60 potential responses, and gives the feel that the player is communicating directly with the actor.
One team’s decision to lower pricing or launch a marketing campaign will have a visible effect on other teams’ ability to sell their products and services. Along the way, challenges arise, including natural disasters, employee issues and other unexpected twists. Each team has a score card that earns points based on performances.
“It puts people in a safe, controlled environment to practice, to test, to question and to learn,” said Eric Greisdorf of Austin-based energy management company ClearResult, which is using Enspire to train employees who are moving into supervisory roles. “The people we’ve identified for leadership positions are very strong at their craft, but often they don’t have experience in leading people. The purpose of the Enspire program is develop that skill set.”
Billhardt, now 39, says it would have made sense to start Enspire in Boston, close to the company’s one paying customer.
But the Hamburg, Germany, native had done a student exchange at Pflugerville High School as a junior and returned to earn his undergraduate degree from UT. He wanted to get back to Central Texas.
“The environment in Austin was so much more supportive than any other place I had lived. I knew it was the only place I could imagine building a company,” he said. “So in June 2001, in the midst of a pretty big recession, all my classmates went off to their fancy consulting jobs and I drove a U-Haul from Boston and set up shop in an apartment on 38th Street.”
Getting off the ground took time. “The only money we had was a $25,000 student loan I took out — that was our credit line. We had to support ourselves from the very first day from actual revenue from customers,” Billhardt said.
For the first decade, Enspire focused on working one-on-one with corporate clients to create customized simulation programs. Four years ago, it launched a product line, which now accounts for about 30 percent of revenue and is growing steadily.
This year, the company will post revenue of $6.4 million, up from $5.6 million in 2012 and $4.6 million in 2011. It has been profitable all but in 2007, when the company hired too quickly, and 2009, when it was hit by the recession.
Enspire is starting out 2014 with a boost — it just landed a $2.8 million contract with an undisclosed medical association in California to redesign its training program for nurse practitioners.
Clients typically pay $500 to $700 for management training programs and $1,200 for senior leaders. In addition to the day-long software simulation, Enspire provides a business executive who facilitates the program and provides feedback throughout the experience.
According to consulting firm Bersin & Associates, U.S. companies increased leadership development spending 14 percent last year to $13.6 billion in 2012.
Determining whether leadership programs achieve their goals is hard to measure. Enspire says it judges itself based the future success of its participants and return business, which it gets from the vast majority of its clients. For 2014, the company already has booked $4 million in revenue, Billhardt said.
Enspire, which has 47 employees, does all of the video production for its games at its headquarters on Guadalupe Street near the University of Texas, which is a longstanding partner and customer.
At UT’s McCombs School of Business, incoming MBA students take part in a one-day Enspire training program during the school’s five-day orientation session.
Students are broken into the study groups they will be working closely with during the semester. The groups then compete to bring a product to market. Each member is given a title, such as CEO, chief financial officer or director of marketing, and together they work through five business quarters. Each quarter presents a new challenge, such as fund raising or a product launch, and the simulation throws in disruptions such as a hurricane or a labor issue.
“It’s the first opportunity students have to work with members of their study team in a challenging environment,” said Deidra Stephens, director of McCombs’ Texas MBA Plus Leadership Program. “They have to communicate effectively, understand each other’s strengths and weaknesses and make sure the entire group understands why decisions are being made in a really fast-paced environment.”
At the end of the day, business advisers are brought in and the teams make a fundraising pitch to them. The advisers walk students through a debriefing, and a winner is chosen.
“It’s really interactive, it’s a lot of fun, it’s stressful, but in a good way,” Stephens said. “Students say it really highlights what they want to learn in the MBA program, and year after year, it is the highest-rated activity in orientation.”
After years of steady growth, Billhardt made the decision this year to accelerate the company’s expansion plans.
In May, he hired Austin tech veteran Lawson Ellinor, who has held senior leadership positions with Bazaarvoice, Dell and IKON, as chief operating officer.
Ellinor said he was drawn to Enspire by its learning-by-doing approach to training.
“I grew up in sports, and practice is everything,” Ellinor said. “After a game, sports guys watch the film over and over and make adjustments. In business there’s no emphasis on practice, even though it’s critical to growth. Enspire’s simulations focus on building a person’s experience, and that’s a rich experience, whether at UT in MBA school or leaders developing at a Fortune 500 company.”
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