Executive summary

CEO In Training

Developing talented managers from within the ranks of an organization is critical to its future success and sustainability. Managers can emerge from any functional area and usually have exposure and expertise in the area they happen to originate from whether it be production, operations, administration, marketing or finance. They usually do not have exposure to all areas of the company. Effective and interesting training programs to round out their backgrounds are hard to find. Programs that expect you to fall backwards in the hopes your colleagues will catch you may be interesting team building experiences, but they don’t prepare candidates for the rigors of managing a division or leading an entire company.

The CEO in Training Program creates a gamified simulation offering participants the opportunity to manage and have responsibility for every aspect of a company operating in a highly competitive industry. In this case, that industry is the frozen sliced apple industry. The task is to lead one of six apple processing companies, located in varying apple producing regions across the country, through a single processing season, from the September harvest, through the production season, to the end of the contract period. This 12-month period is known as “The Pack.”

The frozen sliced apple industry is a mature, seasonal, high capital, low margin and highly competitive industry. Executives participating in the simulation must quickly learn the industry and its metrics, design a processing facility, fund it through a combination of debt and equity, bid against each other to purchase raw apples from regional markets around the country, determine their finished product cost, develop a staffing plan, set compensation levels, schedule production, manage inventory, and bid against other players for customer contracts. Apple growers, (the suppliers) sell their crops to the highest bidders and large food companies like Conagra, Mrs. Smiths, Nestles and Sara Lee, (the customers) fulfill their frozen sliced apple needs by executing purchase contracts with a select few low bidders. Not every processor will receive apples from each region, and nor will they receive a contract with every customer. This makes management information and the pricing decisions it supports, of critical importance. As the program progresses, random variables affecting regional crop size, apple yield and customer demand will force additional analysis and decision making to optimize company results. Once the raw apple and customer contracts are committed, each processor will negotiate with their competitors to utilize excess production capacity and sell off excess apples and/or excess customer contract obligations. At the end of the program, the processor with the highest calculated ROE will be deemed the winner.

As the program progresses, participants also receive practical instruction in a range of general business topics typically related to each phase of the simulation. Topics will include macroeconomics, capital budgeting and formation, costing methods, interest rate construction, risk analysis, sales forecasting techniques, the time value of money, net present value and IRR calculations, ratio analysis, the business cycle and a general overview of bankruptcy. Some topics may be review for certain participants, while for others this may be their first exposure to many of these topics since managers within organizations rise from varying areas of the company with diverse educational backgrounds and experience.

During each phase of the program, participants will also receive instruction and assignments related to developing a fully integrated financial model including a projected income statement, balance sheet, cash flow statement and their related revenue, cost and balance sheet drivers. A review of basic accounting principles will also prepare each participant to create, read and understand financial statements and the stories they tell.

At the end of the program, each participant will have received a broad exposure to a wide range of business topics, become proficient in developing a fully integrated financial model, and have managed all aspects of a company through a complete 12 month season in the frozen sliced apple industry. Each CEO in Training participant will have full decision-making authority for their organization. Based on their ability to problem solve and think strategically, they will have a unique, realistic opportunity to step into the role of CEO with the potential for the success or failure that comes with it.