Six Words: Value, Tactic, Frighten, Accessible, Echo, Designer
For a semester or two, sometime during the 1980’s, I taught a Junior Achievement course at our local high school. I met with an Economics class and the teacher had to want Junior Achievement to participate. I think I met with the class once a week for a couple of months. I’m pretty sure the students learned something, but I know that I did.
Each class period I talked about something for a while, and then had the students participate in a business simulation. I don’t remember what guidelines JA gave me for the lecture part, but I assume that they gave me something. I know that I did talk about the basics of an economy, how some people produced food, some gathered natural resources, some manufactured products and some provided services. I talked about how people could barter whatever they had for things they needed or wanted, but that sometimes the timing of those that wanted to sell and those that wanted to buy didn’t happen at the same time – and how that led to creating IOU’s, and how that became money.
One example I used was coal. I remembered seeing coal when I was young because some of the houses and apartment buildings where I grew up burned coal, but my students didn’t know that and they had never seen coal. I think they knew what it is though. I knew that Texas is a major producer of coal and I thought that it should be easy to get samples to show the students. Looking in the phone-book, I found some coal companies in the Dallas area. Today’s students wouldn’t know what a phone-book is. I called one of the coal companies and asked if I could get a couple of pieces to show my class. I was surprised when the man I spoke to said they didn’t have any actual coal in the Dallas area and they never do. But he said that if he or anyone he worked with went to or from a mining area any time soon he’d see if he could get some for me. He did, and I was able to pass some lumps of coal around in class. I don’t think the students were impressed and I wonder if any of them have ever mentioned that they’ve actually touched coal.
Then we played the simulation game. The students were divided into teams. In the game, the teams were going to sell pens. Each team had to decide how many to make, determine the cost of the materials, how much to charge, how much to spend on advertising in order to make a profit. When it came to pricing and advertising, they could take either of two tactics. They could decide that their pens were a high value, designer product and charge a high price which would mean spending a lot on advertising and hoping that enough people wanted to echo the style conscious people that could afford them. Or they could price them to be very accessible and try to be profitable by making a small profit on a large number sales. The simulation game was a bit frightening. Either approach could work, but either approach could easily lead to bankruptcy and a lot depended on what the competition did.
During class, each team made their production, advertising and pricing decisions, then wrote them down and gave them to me. I would take the decisions and feed them into a computer, print the results and bring those result to class the following week we’d compare results. We repeated this for about six weeks and then measured each team’s profitability at the end of the period.
Now, think for a moment, how ridiculous that would be to today’s high school students. Today, the same simulation would be valid, and the students would have to make the same decisions. But then they would immediately enter their decisions into the laptop computers that each of them have, the simulation would be run on a common system where the competitors decisions interact with each other, and the students would instantly see their results on their laptop screens. The teacher could project all of the results on a screen to lead a class discussion. The students could run six weeks worth of simulations in minutes. And businesses do the same thing. The next time someone asks if advances in technology really help in the classroom, or in real life, ask them if they’ve ever touched a lump of coal.