F E A TUR E AR T I C L E

Enhancing experiential learning through businesssimulation and emulation: TBC Corporation createscompetitive advantage

Thomas E. Conine, Jr. | B. Carlo Peratoner | Peter J. Cuozzo | Terri F. Hoskins

One of North America's largest marketers of automotive replacement tires,

TBC Corporation emerged from a joint venture in 2018 with an aggressive

organizational development strategy, launching two major leadership pro-

grams as its cornerstone. The company's president and CEO, Erik R. Olsen,

recognized the need to accelerate the “forming-storming-norming-performing”curve that many new joint ventures experience. TBC's new talent development

framework is based on two leadership programs created in partnership with

TRI Corporation, specialists in experiential learning. Designed for TBC

employees at various stages of their career, Business Value Added (BVA) and

Business Essentials Program (BEP) both use a blended learning approach that

is experience-, relationship-, and education-based to create an interactive and

highly experiential learning environment. Differing in the learning methodolo-

gies they employ—a competitive simulation and action learning projects for

BVA and a collaborative emulation and financial projects for BEP—they

helped TBC executives translate leadership theory into practice across all of

TBC's business units.

1 | INTRODUCTION

For more than 60 years, TBC Corporation (TBC), oneof North America's largest marketers of automotivereplacement tires through a multichannel strategy, hasbeen a tire company ahead of the curve. Throughworldwide operations spanning wholesale, retail, fran-chise, and ecommerce, TBC provides customers top-tier brands and automotive maintenance and repairservices with the underlying mission to exceed cus-tomer expectations. Headquartered in Palm Beach Gar-dens, Florida, TBC serves wholesale customers in theUnited States, Canada, and Mexico through TBCBrands, National Tire Wholesale (NTW), TBC Interna-tional, and TBC de Mexico. Additionally, TBC respondsto the needs of consumers in search of total car care atmore than 720 company-operated tire and automotive

service centers under the brands Tire Kingdom® Ser-vice Centers and NTB® Tire & Service Centers. TBC,through a subsidiary, also owns the Big O Tires® andMidas® franchise systems.

In January 2018, Sumitomo Corporation of Americasand Michelin North America, Inc., entered into an agree-ment to form a joint venture that would own TBC. InApril 2018, the deal was closed. Simultaneously, TBCassumed 100% ownership of TCi (excluding its commer-cial truck division), which specialized in the distributionof passenger car and light truck tires, commercial trucktire sales and service solutions, and the manufacturing ofindustry-leading custom and premold truck retreads, andbegan the process of merging TCi with Carroll Tire, aleading distributor of private and major brand tires, toform NTW. NTW is one of the largest distributors of tiresin the United States.

DOI: 10.1002/joe.21998

6 © 2020 Wiley Periodicals, Inc. GBOE. 2020;39(3):6–16.wileyonlinelibrary.com/journal/joe

Post-merger, TBC embarked on an aggressive organiza-tional development strategy, launching two major leader-ship programs as the cornerstone: Business Value Added(BVA) and Business Essentials Program (BEP). The ideawas to leverage workplace learning as a social process tohelp integrate and align staff on the way forward.

2 | LEARNING INSIDE-OUT ANDOUTSIDE-IN

TBC Corporation's president & CEO, Erik R. Olsen, recog-nized the need to accelerate the “forming-storming-norming-performing” curve that many new joint ventures experience.Whatwas originally a two-year plan to integrate IT platforms,work processes, physical facilities, materials flow, enterprisesoftware, customers and associates, was condensed to9 months in order to get the new company operating at fullcapacity. “Wemade a commitment to integrate our organiza-tions in the most prudent and efficient way possible,” saidOlsen. “Wenever lost sight of that commitment.”

As shown in Exhibit 1, TBC views the talent develop-ment cycle as an integrated process that begins before a newassociate joins the company (the sourcing/recruitment stage)and progresses through several distinct stages. Although thecycle is graphically depicted in a neatly bounded sequence,

these stages occur at different times in different sequencesandwith different durations for different teammembers.

TBC provides customers top-tierbrands and automotivemain-tenance and repair services withthe underlyingmission toexceed customer expectations.

TBC partnered with TRI Corporation to co-designand co-facilitate two critical leadership programs: BVAand BEP. BVA's purpose was to inculcate economicprofit (EP) into TBC's daily operations, while BEP wasdesigned to build and enhance skills around leadingself, leading others, and leading the organization. BVAlaunched in November 2018 and BEP followed inAugust 2019. A third program, Leadership EssentialsProgram (LEP), will launch in 2020, affording TBC theopportunity to again work closely with associates atcompany-owned retail stores and distribution centers,and with functional managers.

EXHIBIT 1 TBC's integrated talent development framework

An integrated, value-added approach to human resource leadership

Talent Management/

Succession PlanningSelectionSourcing/Recruitment

TBC Culture/ Work Environment

TBC Culture/ Work Environment

TBCTBC Vision/Mission

TBC Values

TBC Objectives

CONINE, JR., ET AL. 7

Both BVA and BEP use a blended learning approach;however, they differ in the core vehicles they employ todrive learning outcomes—a competitive business simula-tion for BVA versus a customized collaborative emulationfor BEP. The distinction? A simulation involves a competi-tive team-based leadership of a hypothetical company andindustry. An emulation mimics a real company in a realindustry using real data. BEP forms the cornerstone of abroader organizational development strategy integratingtalent acquisition, new associate orientation, leadershipand technical training, associate engagement, performanceand talent management, and succession planning, all inservice to TBC's vision, mission, and values (Exhibit 2).

EP takes into considerationthe opportunity cost of invest-ment, also referred to as thecost of capital, and is a criti-cal metric to accelerate share-holder value.

With participants from both former companies inattendance, BVA and BEP were the flagship initiatives toestablish new concepts, such as EP, and new ways ofworking, such as socializing TBC's new leadership frame-work (Exhibit 3).

BVA and BEP emphasized experiential learningthrough human interaction. Both were designed usingreal-world financial and market data combined withleadership theory and best practices, incorporating peercoaching and interactions with senior TBC executives to

socialize the learning from both an inside-out andoutside-in perspective. Inside out focuses on internalTBC learning and best practices from TBC participantsand the company's senior leaders; outside-in looks atexternal best (and worst) practices by utilizing non-TBCfaculty. Taken together, these two perspectives create amore holistic, integrated learning process.

3 | BUSINESS VALUE ADDED

BVA's purpose was to integrate EP into TBC's dailyoperations. Why the emphasis on EP as a measure ofthe company's performance, versus EBITDA (earningsbefore interest, tax, depreciation, and amortization)? EP(often referred to as EVA™) aligns all decision-makingwith the integration of the income statement, balancesheet, and cash flow (i.e., all three relevant financialstatements). EBITDA is primarily focused on theincome statement alone. EP takes into considerationthe opportunity cost of investment, also referred to asthe cost of capital, and is a critical metric to accelerateshareholder value.

Using a blended learning approach, BVA leveragedtwo core-learning vehicles: a business simulation andaction learning projects. As with any blended learningprogram, participants were sent pre-program materials4 weeks before the start of BVA. These materials includedsimulation readings, a review of a series of financialequations, a self-assessment, and a draft project charterprepared by the action learning project sponsors. Thecompetitive business simulation was conducted over thecourse of a four-day, in-residence program. A 5-monthcycle of action learning projects, strategically identifiedand championed by TBC senior executives, followed.Next, participants presented their project conclusionsand recommendations to senior management.

EXHIBIT 2 TBC's vision, mission, and values

8 CONINE, JR., ET AL.

3.1 | Educational objectives

The educational objectives for BVA were comprehensiveand far-reaching:

• Create a vision, set a strategy, communicate it effec-tively, and drive alignment to execute on the plan.

• Possess and operationalize a deep knowledge of allaspects of business acumen.

• Make decisions under uncertainty (limited informa-tion, time pressure, divergent opinions, etc.) from asystem's perspective.

• Develop, coach and motivate team members.• Be a value-added business partner to all operations/

functions and deal with their interdependencies.• Apply BVA learnings in a team environment on a TBC

strategic project.

“One of TBC's core values is to be fiscally responsible,”Olsen explained. “In the BVA program, the executive leader-ship team had the opportunity to work alongside our associ-ates to bring this value to life. It's one thing to talk about it—it's another to deliver it on a consistent basis. We used actionlearning to take economic profit from theory to reality.”

The competitive business simulation TRI Corporationdesigned for TBC took place during a four-day in-residenceprogram. Within the simulation, TBC's BVA participantswere grouped into three teams, each of which was taskedwith running one of three competing companies in anaggressive marketplace over a simulated two-year period.Participants had to develop and execute on their strategy,

making a variety of operational decisions in a dynamicindustry—often without complete information and undertight time constraints. The flow of the four-day in-residenceportion of the BVA program is summarized in Exhibit 4.Three BVA programs were conducted in 2018 and 2019 fora total of 60 participants. The four-day in-residence programincluded a heavy dose of financial and business content.

Participants had to developand execute on their strategy,making a variety of opera-tional decisions in a dynamicindustry—often without com-plete information and undertight time constraints.

BVA content also introduced the notion that all TBCleaders need to become “value managers.” In otherwords, they have to adopt a dispassionate, value-orientedview of corporate activities that recognizes the businessfor what it is: investments in new productive capacity oractivity that earn a return above the opportunity cost ofcapital. Value managers must look at the various aspectsof the business and seek out the activities that erode orpotentially trap value. They must always balance short-

EXHIBIT 3 TBC's leadership framework

CONINE, JR., ET AL. 9

and long-term decisions in their day-to-day activity, con-stantly asking what they can do to:

• increase the organization's top line,• protect price,• grow volumes,• develop marketing and advertising initiatives,• reduce turnover with proper training aligned with nec-

essary job skills,• improve processes and productivity,• recognize and reward employees as appropriate, and• conduct daily after-action reviews on key learnings

from the past.

3.2 | The simulation

In the simulation, TRI associates role-played various char-acters, from customers to suppliers, to make the simulationmore interactive and “real.” For example, participants couldnegotiate pricing and terms, practice their influencing andpresentation skills, and strike a balance between the hardand soft leadership skills needed to win in the marketplace.

Adding a note of reality into the simulation, TBCsenior executives listened to and critiqued the partici-pants in two operational reviews, one at the end of “Year1” and the other at the end of “Year 2.” Rather than posi-tion these executives in front of a classroom, the simula-tion fully integrated them into the flow of the program.

A comprehensive projectcharter was due one weekbefore the start of BVA toalign all team members onthe scope and expected deliv-erables of the project.

These senior executives also served as champions forthe BVA action learning projects, so there was time setaside on each of the first three days of the program for

EXHIBIT 4 Business Value Added (BVA) at a glance

10 CONINE, JR., ET AL.

the project teams and their champions to get together toplan the way forward. A comprehensive project charterwas due one week before the start of BVA to align allteam members on the scope and expected deliverables ofthe project.

As noted in Exhibit 4, there were three main flows or“learning branches” to the program. Content plenary ses-sions focused on operational finance and project manage-ment. Project sessions provided time for project teammembers, their sponsors, and their champion to discussvarious elements of the project and next steps. And simu-lation sessions designated the timing and topics for thevarious stages of the business simulation.

3.3 | Action learning projects

The BVA projects were all at the enterprise level andencompassed a wide variety of topics, including enhanc-ing the capital expenditure process, reducing workforceturnover, improving supply chain efficiency, balancinghigh margin/low volume stock-keeping units (SKUs),optimizing transportation management systems, creatinga continuous improvement process to provide and mea-sure world-class customer service, enhancing the existingculture of safety, and developing a process around infor-mation as a critical asset (including predictive and dataanalytics). All required cross-functional balance, soft-and hard-skill applications, qualitative and quantitativeconsiderations, and risk management. BVA project titlesincluded:

• Transportation Management• A Culture of Safety• Associate Turnover• Supply Chain Planning• The Value of Data• Pockets of Profit• Continuous Improvement

During the four-day in-residence portion of BVA,each action learning project team meeting was structuredand provided with a set of required deliverables before ateam could move on to its next team meeting the follow-ing day. Teams worked on their assigned projects overthe course of the next 5 months, culminating in a board-room presentation to TBC's senior executives.

Nine BVA projects are currently at various stages ofimplementation and have three- to five-year minimumcash flow expectations. They are expected to have animpact on revenue, process and productivity improve-ments, working capital, asset management, and costreduction.

4 | BUSINESS ESSENTIALSPROGRAM

Designed for executives at the director-level and above,TBC Corporation's BEP program builds and enhances skillsacross three domains: leading self, leading others, and lead-ing the organization. Like the core of BVA, BEP was struc-tured to take place in-residence over four days. Contentareas spanned leadership at TBC, operational finance, con-flict management, cognitive bias in decision-making, execu-tive presence, and coaching for development (Exhibit 5).

4.1 | Educational objectives of BEP

The educational objectives for BEP were complementaryto those of BVA:

• Gain self-awareness across a spectrum of assessmentsand feedback sessions.

• Develop a working knowledge of TBC's leadershipframework.

• Build upon TBC's Values and Social Responsibility inthe communities in which the organization doesbusiness.

• Explore critical soft skills such as coaching, conflictmanagement, influence and executive presence.

• Be a collaborative business partner to all operationsand functions.

• Enhance one's knowledge of operational finance.• Create long-term growth from a responsible mindset

in meeting commitments, accountability, and prudentrisk-taking.

• Apply BEP learnings to enhance one's IndividualDevelopment Plan (IDP).

4.2 | The emulation

BEP used a highly customized, collaborative case study,or emulation, to drive outcomes. This experiential exer-cise compressed a three-year hypothetical time frame intothe four actual days of the BEP in-residence program andemployed a balanced scorecard with three major compo-nents: financial, strategic, and leadership (Exhibit 6).Each round of the emulation represented one year ofoperation. As the teams progressed through the exercise,their actions affected scoring, with different activitiesspecifically targeting each of the scorecard elements. Thefinancial scorecard summarized the total financial perfor-mance of the company.

To develop the emulation, TRI interviewed more than50 TBC executives and employed actual TBC financials

CONINE, JR., ET AL. 11

and leadership and market challenges to create Automo-tive Service Corporation (ASC), a hypothetical companythat closely resembles TBC.

Because TBC had historically grown through acqui-sition, it developed an underlying “holding company”mentality that drove silo-type behaviors. The BEP emu-lation required participants to adopt more collabora-tive behavior to produce synergistic financial and non-financial results. Participants were divided into fourteams—retail, wholesale, franchise, and supplychain—each responsible for its own department as wellas a set of enterprise financial metrics and key perfor-mance indicators (KPIs) they needed to drive acrossASC. They were challenged by ASC's CEO with specifictargets in three enterprise-wide stretch goals: grow rev-enue, increase margins, and increase cash. Financialmetrics included net sales, earnings before interest andtax, and cash. KPIs included innovation, profitablegrowth, integrated people processes, and a focus on thecustomer. In one of the most powerful interactive ses-sions of BEP, participants were asked to be prepared todiscuss a financial challenge they or their departmentfaced. Participants then chose four of those challengesin plenary and collaborated on action plans toaddress them.

4.3 | Leadership challenges

During the course of each hypothetical fiscal year, TBCsenior executives would interrupt teams twice to issue areal-world leadership challenge—the third element of thebalanced scorecard—that required the team's responsewithin 15 minutes. Over the three fiscal years of the emu-lation, each team member had the opportunity to providea one-on-one response to the TBC executive while theremaining team members listened to the report-out. Lead-ership challenges included such topics as associate engage-ment, diversity and inclusion, managing millennials,associate retention, data security, trust in the organization,sourcing new talent, giving back to the community, andmanaging in the matrix. Each described an operational orbehavioral challenge that spanned the breadth of theenterprise. As new real-world challenges emerge over timeat TBC, they can be seamlessly incorporated into the emu-lation to keep it current.

Here is how a typical leadership challenge unfolded:A single individual on the team was presented with aone-page summary of the challenge (Exhibit 7) and had15 minutes to develop a high-level plan to address theissue. That person could work on the challenge in isola-tion or with the support of other team members. This

EXHIBIT 5 Business Essentials Program (BEP) at a glance

12 CONINE, JR., ET AL.

was not an easy decision, as the other team memberswere working intensely on the other deliverables for thatfiscal year. After the 15-minute preparation, an actualTBC executive entered the team space to role-play withthe individual. Other members of the team wereinstructed to quietly observe the interaction. The leader-ship challenge role-play lasted 10 minutes. At its conclu-sion, the executive took 5 minutes to give feedback to therole player and team.

Executives reflected on theirone-on-one role-play experi-ence and had the discretion toadd or subtract points on ele-ments of the strategic scorecard.

There were two leadership challenges in each of thethree emulation rounds, ensuring that each team membereventually participated in a one-on-one interaction with anexecutive. The TBC executive rated each participant on

two dimensions: technical response to the leadership chal-lenge and executive presence in delivering that response.These ratings had an impact on the team's financial andnonfinancial performance.

The four senior executives involved in the role-playmet after each round on leadership challenges to calibrateand normalize their scores. Executives reflected on theirone-on-one role-play experience and had the discretion toadd or subtract points on elements of the strategic score-card. Scores for each leadership challenge were normal-ized and tabulated for integration with the final roundresults. The executive presence and leadership challengescores were averaged for the role-plays and their finalscore averaged with the prior round's score. The averagingtechnique facilitated the simulation of the incrementalnature of how leadership affects business performance.The final leadership challenge score had a small impact onthe financial performance shown on the team scorecard.

4.4 | Business initiatives

In addition to leadership challenges, each BEP emulationrequired teams to act on various business initiatives, withtheir decisions affecting both the financial and strategic

EXHIBIT 6 Balanced scorecard overview

[Color figure can be viewed at wileyonlinelibrary.com]

CONINE, JR., ET AL. 13

sections of the balanced scorecard. Teams had to evaluatethe current state of their department scorecard, as well asthe enterprise scorecard, and select the initiatives thatwould address weakness in the business. Teams alsoneeded to consider the budget implications for these ini-tiatives, and to decide whether to select a business initia-tive in isolation or in collaboration and consultation withthe other three departments. Decision-making thatfavored financial performance would likely sub-optimizethe strategic KPI performance. Conversely, favoring

initiatives that affected strategic KPIs had a potentiallynegative consequence on financial performance.

4.5 | The individual development plan

Participants were also given time, both individually andin peer groups, to reflect on their IDP and revise it. TheIDP listed two to four key short-term development goalsfor the individual in agreement with their manager.

EXHIBIT 7 Sample leadership challenge: Managing in the matrix

[Color figure can be viewed at wileyonlinelibrary.com]

14 CONINE, JR., ET AL.

Participants were encouraged to think of theirdevelopment across three domains: educational-based(such as attending a seminar or obtaining a certifica-tion), relationship-based (such as doing a 360� assess-ment or engaging in a coaching/mentoringrelationship) and experience-based (such as workingon a specific project or taking a short-term “bubble”assignment in another department). In one of the mostpowerful interactive sessions of BEP, participants wereasked to bring with them a key financial challengethat they and/or their department faced. Four of thesechallenges were selected by the participants for adeeper dive and brainstorm so they could collabora-tively and proactively create an action plan to addressthose real business challenges. Each participant thencarried forward their financial challenge post-program,utilizing the same template and rigor demonstratedduring the plenary.

Several participants haverequested follow-up sessionswith their teams to spread theword on operational finance,conflict management, andcoaching for development.

In addition, the peer coaching and reflection timethat TBC built into the BEP program afforded partici-pants, who are in high-speed mode all day every day, per-mission and space to think, reflect, discuss, and create—an opportunity they greatly valued.

5 | THE BENEFITS OF A BLENDEDAPPROACH

Both BVA and BEP use an action research methodologyto continuously improve each subsequent offering. Feed-back gleaned from both the participants and the TBCsenior executives provided the ammunitionfor improvements. Both programs benefited from ablended learning approach that included pre-programreadings and team preparation, in-residence methodswith a focus on experiential learning and praxis, andinteractions with senior leaders in both a businessand social setting. With both programs, the learningextended well beyond the in-residence portion—in some

cases a year beyond if members of an action learningteam stayed associated with their particular project.

The combined benefits of BVA and BEP to TBC Cor-poration have been clear:

• The leadership culture is more consistent and robust,with a well-trained pool of high-performing executivesto lead the company into the future.

• Leaders are aligned around a shared vision, mission,and set of values.

• A “leader as coach” mentality spans the organization.• Effective cross-functional, cross-business relationships

have blossomed.• Associates' financial and business acumen has been

strengthened.• There is a greater understanding of and alignment

with the broader corporation.

BVA paved the way for improvement in financial andbusiness acumen. Participants in the simulation alsoreported the positive nature of the cross-department net-working they experienced. Perhaps most important, BVAparticipants worked on a strategic, real-world projectover 5 months post-program to apply both the financialand leadership skills learned during the four-day in-residence portion of BVA.

Likewise, BEP also delivered several key learnings.First, each participant, working with their immediatemanager, identified a strategic financial challenge thatthey have continued to work on post-program. Other keyinsights and learnings varied by participant, with most ofthem identifying “collaboration” as a core skill experi-enced through the emulation that they have taken backto their day jobs. Related to this, as with BVA, was thevalue of networking and meeting associates from acrossTBC Corporation and, in the process, realizing that theyshared some of the same issues and challenges. Anotherkey takeaway noted by the participants was their learn-ing more about executive presence and how to deliver apowerful presentation. Lastly, several participants haverequested follow-up sessions with their teams to spreadthe word on operational finance, conflict management,and coaching for development.

The next step in the leadership development process atTBC is to design and deliver the Leadership Essentials Pro-gram (LEP), which is scheduled to launch in 2020. Theaudience for this program will be people leaders below thedirector level, including retail store managers, distributioncenter managers, and functional managers. TBC will adhereto its mantra that leadership development is a process, notan event—a process that can create distinct competitiveadvantage when applied comprehensively and withoutboundaries across the global enterprise.

CONINE, JR., ET AL. 15

AUTHOR BIOGRAPHIES

Thomas E. Conine, Jr., PhD, is a professor of financeat Fairfield University in Connecticut and president ofTRI Corporation, which specializes in corporate edu-cation, experiential leadership, and simulation pro-grams to help clients develop leaders, sharpenfinancial acuity, improve business acumen, andenhance shareholder value. An adjunct faculty mem-ber at GE Crotonville, General Electric's corporateeducation center, since the early 1980s, Dr. Conine isa member of the GBOE Editorial Advisory Board andhas previously written for the journal on a variety oftopics. He can be reached at tomc@tri-sim.com.

B. Carlo Peratoner is CEO and co-owner of TRI Cor-poration in Beaverton, Oregon. Since joining TRI in1999, he has established the company as one of theworld's leading executive education providers and hasbeen involved in all aspects of the business: clientmanagement, development, delivery, and operationsmanagement. Peratoner has more than 18 years ofcorporate experience in manufacturing, engineering,information technology, accounting, finance, projectmanagement, sales, and general business consulting.In addition to traveling the globe conducting TRI pro-grams, he is an EdD candidate at Columbia Univer-sity's Program in Adult Education. He can be reachedat carlop@tri-sim.com.

Peter J. (Pete) Cuozzo, EdD, is managing partner ofCuozzo Enterprises, a boutique management consult-ing firm specializing in organizational effectiveness,executive development, talent management, andemployee engagement. Earlier in 2020, he was vice

president of change leadership and an executive coachat TBC Corporation. Dr. Cuozzo is an experiencedbusiness executive and professional educator withnearly 40 years of experience as a corporate officer,senior HR leader, CEO advisor, chief learning and tal-ent officer, executive coach, organization developmentpartner, and entrepreneur. His previous employersinclude GE, Stanley Black & Decker, Syngenta, HP,and Hess Corporation. He can be reached atpetecuozzo@gmail.com.

Terri F. Hoskins is senior vice president and chiefhuman resources officer at TBC Corporation in PalmBeach Gardens, Florida. As a human resources execu-tive and corporate officer, she has more than 25 yearsof experience in leading global organizations throughchange management, talent development, labor rela-tions, and leadership-focused learning. She has abroad background combining HR with finance andmarketing experience and has championedenterprise-wide sustainable performance at such com-panies as Hooters Restaurants, Outback SteakhouseRestaurants, Hess Corporation, and BB&T Banks. Shecan be reached at thoskins@tbccorp.com.

How to cite this article: Conine, Jr. TE,Peratoner BC, Cuozzo PJ, Hoskins TF. Enhancingexperiential learning through business simulationand emulation: TBC Corporation createscompetitive advantage. GBOE. 2020;39(3):6–16.https://doi.org/10.1002/joe.21998

16 CONINE, JR., ET AL.