The Science Behind the Game

There is absolutely no need to know the theory in order to play. It is, however, useful to study theory, because as Kurt Lewin, pioneer of social, organisational and applied psychology, wrote: “There’s nothing more practical than a good theory”.

The Productive Leadership simulation game is based on the human capital production function, which is an internationally acknowledged theory for the analysis of the productivity of human capital (e.g. Kesti & Syväjärvi 2015, Kesti 2013). The equation has been successfully applied in dozens of companies and public sector organisations. The equation is as follows:

Revenue = K * HR * TYW * (1-AW) *QWL

Where K = business coefficient, indicating how an effective working hour can be translated into revenue (€/h), HR = the number of personnel measured in full-time equivalents per financial year (no.), TYW = theoretical yearly working time per employee [h], AW = auxiliary working time out of theoretical yearly working time [%] and QWL= quality of working life experienced by employees (0 to 100%).

Operating profit can be calculated using the equation EBITDA = Revenue – variable costs – fixed costs

The latest research indicates that there are much better and faster ways to improve productivity than cutting employment costs. Recognising and materialising advantages, however, requires better knowledge of one’s organisation and more efficient personnel-oriented development work.

The new, internationally acknowledged calculation model allows for analysing human capital for each organisation. Thanks to the evidence-based model, managers, HR experts and supervisors can be guided to better develop and benefit from the human resources available. Materialising the advantages, however, requires organisational leaders to have a better understanding of their organisation and good HR practices.

References:

Kesti M. and Syväjärvi A. (2015) Human Capital Production Function in Strategic Management. Technology and Investment, 6, 12-21.

Kesti M. (2013). Human Capital Production Function, GSTF Journal on Business Review, Volume 3, Issue1, pages 22-32.

Kesti M. (2014). Henkilöstövoimavarat tuottaviksi, FINVA kustannus, Helsinki.

There’s nothing more practical than a good theory.

Kurt Lewin

Social phychologist, 1890-1947

Marko Kesti

Marko Kesti

CEO, Researcher

Marko Kesti, MSc (Eng.), PhD. (Admin.), Adjunct Professor, is the man behind PlayGain. He has a long career working for international corporations, as an entrepreneur and a business coach. He is an analytical researcher and a science writer but also a well-liked, down-to-earth coach and lecturer, who helps his clients to better understand the importance of human resources and good leadership. He works as associate professor at Lapland University of Applied Sciences in the human capital productivity research programme.

The Productive Leadership game originated from the idea of offering a concrete tool for companies to improve productivity: research has shown that the well-being of personnel and good HR practices have a strong correlation with the financial success of an organisation. Strong practical expertise behind the theory – and the game itself – is the best guarantee that the operating methods learned while playing the game can translate into concrete improvements in productivity.

Tel. +358 (0)40 717 8006

Email: