Problem: Like most high tech companies, semiconductor giant Texas Instruments rode the technology boom in a state of bliss. As customers waited in line for its products, TI became more product and technology centric, and admittedly less concerned about its customers. Then came the bust. TI was suddenly forced to compete for new business, yet elements of its management simply wouldn’t adjust to the market’s new demands. How could TI jolt its people into a renewed awareness of the customer?

Solution: Texas Instruments called on BTS USA, a global supplier of computer-based simulations for learning. The provider developed a customer loyalty course for TI’s top 300 executives aimed at raising awareness about customer-centric thinking. The course was so successful that it was expanded to an additional 2,000 TI managers, and earned BTS a coveted Supplier Excellence Award from a grateful TI.

They call it a “Customer Loyalty Boot Camp.” The title is appropriate because much like the Army’s indoctrination for recruits, it represents the Tough Love approach to employee learning. And for Texas Instruments, it seemed like nothing less would do.

Picture the scene. A classroom of 25 TI executives, all chastened by a stern lecture from the company’s senior vice president of worldwide sales and marketing, Jeffrey S. McCreary. “This company is broken,” McCreary railed. But the audience wasn’t getting the message. The year was 2001, the bottom was dropping out of the semiconductor industry, and TI’s fortunes were plummeting along with it. It was no time for the company to be dismissive of its valued customers--or perceived as such.

Also in the classroom were consultants and trainers from BTS USA, a global learning and business consulting company that provides simulations to help companies implement business strategies. BTS had been invited to help develop and deliver a course for TI executives on customer loyalty. The two and one-half day course had been painstakingly created by BTS following extensive interviews with TI executives, key account managers, and customers to gain an accurate picture of the problems facing the company. The customized course was designed and created with the active participation from TI’s training department.

The 25 assembled managers were divided into five teams, each assigned to simulate executives of a fictitious company called Streaming Wireless Video. (STREAVO). The concern “manufactured” a handheld product that included chips supplied by another fictitious company called Terrific Instruments (TI). It was now time for the TI managers to walk a mile in their customer’s shoes.

Each team was responsible for a different department within STREAVO, including engineering, finance, supplier management, manufacturing, and marketing. Using laptop computers and a simulation to analyze data, such as engineering specifications, financial statements, and customer and market reports, they pondered the purchasing decision for three hours before hitting a button named “commit.”

“Little did they know that upon return from their coffee break, the teams would walk into a valley of darkness,” recalls Daniel Parisi, senior vice president of BTS USA and general manager of its San Francisco office. Parisi was in charge of the seminar, and was about to make their lives miserable by delivering information about Terrific Instrument’s execution missteps including failure to meet time, cost, and performance commitments. 

The simulated learning concept he was using got its start in 1985, when Swedish entrepreneur Henrik Ekelund launched BTS to help companies meet strategic business goals. Ekelund found simulation to be a useful tool to communicate complex business strategies to executives, and apparently clients agree. BTS has since expanded to the United States, United Kingdom, Finland, South Africa, Australia, and Spain.

At the heart of the learning exercise are custom-designed computer-based simulations that replicate the actual business processes of the client company. Each management team is assisted in the decision-making process with a laptop on which they can perform budgeting and “what-if” analysis and scenarios. Over the course of a three-month development process, the simulation was co-created by BTS and the client, and inserted into a platform of Excel and Visual Basic software. “It simulates the technical and business interrelationships that exist between TI and its client,” says Parisi. “In this case, the semiconductor’s performance and functionality are realistically linked into the handheld’s design specifications,” he says. “Also, the impacts of the supplier execution missteps are extremely realistic,” adds Parisi.

The concept often uses a kind of shock therapy to jolt executives into reality. At Texas Instruments, for example, many executives were not sensitive to the impact TI’s execution missteps could have on the customer. There also were gaps in their knowledge regarding their customers’ drivers of profitability and competitive advantage. In many cases, they lacked a long-term view of TI’s customer relationships.

When the TI executives returned from their break, Parisi was there to greet them, a scowl on his face and a baseball cap that read Terrific Industries on his head. “There are problems with your order,” he told the assembled “STREAVO” management teams. Not only would there be a five-week delay in delivery, but alas, the chip would not meet specifications, he told the horrified group.

What’s more, Parisi was brutally unsympathetic to the customer’s predicament. “Count your blessings,” he sneered. “After all, we’re Terrific. We’re Number One.” Then came the clincher: an ultimatum from STREAVO’s retail customer, “Circus City,” which was affected by Terrific’s delays. “We don’t care about your problems,” grumbled Circus. “You will either help us or we will cut you off.”

The effect of the simulation exercise was written on the faces of the Texas Instruments executives who felt betrayed and frustrated at the arrogance on display. Some also felt that the excuses sounded distressingly familiar, as indeed they should have. To complete the session, Parisi played a five-minute video of comments from actual TI customers. “TI’s own customers said almost exactly what the TI managers in the STREAVO simulation were saying,” said Parisi. Indeed, hearing customers echo their own experience in the simulation “was like hitting them in the stomach,” he said.

The boot camp was so successful that it has since been rolled out to more than 2,000 TI managers and engineers, says Parisi, who claims the results speak for themselves.

“In 2001, TI had some dissatisfied customers. But at the end of 2003, it was receiving supplier excellence awards from the very same customers,” says Parisi. “Within 24 months, TI turned the entire company in a much more customer centric direction.”

The customer retention sessions actually represented BTS’s second simulation project with TI. The relationship began in 1999 when BTS developed and implemented a Strategy Boot Camp Workshop aimed at introducing senior managers to new business strategies underway at Texas Instruments. TI had decided to focus exclusively on the semiconductor field and had jettisoned some 16 businesses during a reorganization. The simulation-based training exercise required the managers to make certain C-level decisions that would affect pricing, recruitment, manufacturing, sales, and other areas.

TI’s success is prompting calls to BTS from prospective clients. It has signed another major U.S. semiconductor company, and currently has three others in the buying process. Other clients include Applied Materials, Bell Canada, HP, Sun Microsystems, Sony Electronics, and a large U.S. media and entertainment company.

TI was so pleased with BTS’s performance that it recognized it in May with a Supplier Excellence Award. BTS USA was one of only 27 companies from a list of over 22,000 suppliers to receive the coveted honor. “BTS's execution has been exceptional,” says sales and marketing chief Jeff McCreary. “The [customer loyalty] course has been conducted extensively in the Americas, in Europe, and in Asia and is resulting in higher participant satisfaction than any course TI has previously crafted,” he adds.  “Fundamentally, BTS has helped make TI a better company,” says McCreary.