CEO LAB Instructor Guide
A practical guide for MBA and EMBA faculty running CEO LAB in class. Every number and rule here comes from the game itself.
Quick start: 10 steps
- Open /instructor for team sessions. “Create a class” gives students the same scenario for individual play; “Instructor console” runs teams in one shared market.
- Create a team session: session name, number of teams (2–6), difficulty, and optional learning objectives.
- Copy the console link and keep it private — it is the key to your session. Optionally enter your email and select “Email me my console link.”
- Share the student join link (/team) and the session code.
- Students pick a team and a role (CEO, CFO, CMO, COO).
- Ask every team to read the Q0 report before deciding Q1 — Q1 fields start empty.
- Press Start game. Watch live drafts on the console while teams decide.
- Press Run quarter (submitted/playing) when teams are ready. Optionally queue a shock before a quarter.
- Hold short debriefs after Q3 and Q8 using the professor dashboard and teaching moments.
- After Q12, export results (CSV), show the grading rubric and run the final debrief.
1. What CEO LAB is
Students run NOVA Appliances, a European maker of robotic vacuum cleaners, for 12 quarters. They compete with computer rivals — Volt (cost leader), Apex (premium), Orion (balanced), Zenith (low-cost follower) — and KAI Robotics, an aggressive challenger that enters in Q5. In classroom team mode, up to six teams share one market; slots without players are played by the computer.
| Mode | What it is | Use it when |
|---|---|---|
| Solo | One player runs NOVA against the computer rivals; saved in the browser. | Pre-class practice, homework, individual assignments. |
| Classroom team mode | 2–6 teams of up to four roles in one shared market, run from the instructor console. | Live sessions, modules and courses with team grading. |
Principle: "AI explains, the engine calculates." Every number comes from a deterministic engine. The same seed and the same decisions always give the same result. The AI coach only explains figures the engine has already produced; it never calculates.
2. Learning objectives
| Objective | Where it shows up | How to assess it |
|---|---|---|
| Competitive strategy and pricing | Price, positioning, market map, rivals' reactions, strategy declaration | Strategic consistency score; share trend; reflection on rivals' moves |
| Production planning and working capital | Production, the shop limit, payment terms (from Q5), cash bridge | Unsold stock vs sales; cash low points; receivables |
| Inventory risk | 3% holding cost, write-downs, forced markdowns | Write-down lines in the P&L; teaching moment on stock |
| Financial statements | P&L, cash bridge, balance sheet, valuation | Students explain one quarter's EBIT-to-cash movement |
| Capital allocation and financing | Capacity investment, R&D, NOVA Pro project, credit line, board capital request | Peak debt, emergency funding, ROIC |
| Judgment under uncertainty | Forecast range, demand study (±6%), shocks, CEO inbox | Quality of written reasons and reflection on decision outcomes |
| Ethical trade-offs and stakeholders | Ethical dilemmas (4–5 per game) with stakeholder table and required reason | Judgment consistency score; reflection essay |
Console learning objectives you can tick when creating a session: Competitive strategy, Pricing strategy, Capacity planning, Working capital, Financial management, Decision making under uncertainty, Strategic consistency, Risk management.
3. Course formats
| Format | Quarters | Shocks | Debriefs |
|---|---|---|---|
| A) One 90-minute session | Q1: 20 min to read Q0 and decide; Q2–Q4: 10–12 min each | One shock before Q3 or Q4 | 10 min after Q2 (short), 15–20 min final |
| B) 3-week module | Week 1: Q1–Q4, week 2: Q5–Q8, week 3: Q9–Q12; quarters between classes as homework | One per week (e.g. before Q3, Q6, Q10) | One in-class debrief per week |
| C) 6-week course | 2 quarters per week | Weeks 2, 4 and 5 | Mid-point (after Q6) and final |
A) 90 minutes: allow 20 minutes for Q1 so teams read the Q0 report, then 10–12 minutes for Q2–Q4 and 15–20 minutes for debrief. B) Homework: allow 30–45 minutes per quarter per team; a one-page memo can explain one decision with numbers. C) Assignment ideas: a mid-point strategy memo, a final valuation bridge, and an ethics reflection on one dilemma.
4. Before class: setup checklist
- Create a session: name (up to 60 characters), number of teams (2–6), difficulty, optional objectives.
- Keep the console link private — the session code plus the console key in the link give full control. Use the optional email field and “Email me my console link,” or copy the link into your notes now; it cannot be recovered.
- Share the join link /team and the session code. Students choose a team and a role.
- Teams with no players are played by the computer and are not graded.
- Q1: production, advertising, R&D, quality control and capacity investment display “—” and are required. Price and salespeople keep their Q0 values. Students find the Q0 report on the briefing screen and on the Reports page.
- Recommended pre-reading: the student briefing and the strategy guide (/strategy-guide).
| Difficulty | NOVA cash | Debt | Brand | Quality | Capacity | Rivals vs base |
|---|---|---|---|---|---|---|
| Clear Runway | €14M | €0 | 25 | 64 | 50,000 | cash ×0.85, brand ×0.8, quality ×0.9, sales force ×0.85 |
| Balanced Board | €10M | €0 | 20 | 60 | 50,000 | ×1 (base) |
| Tight Margins | €8M | €1M | 18 | 58 | 50,000 | cash ×1.1, brand ×1.08, quality ×1.04, sales force ×1.08 |
| Hostile Takeover | €7M | €2M | 16 | 56 | 45,000 | cash ×1.2, brand ×1.15, quality ×1.08, sales force ×1.15 |
| Role | Levers owned |
|---|---|
| CEO | Ethical dilemma choice and reason; submits the team decision; covers any unfilled role |
| CFO | R&D, NOVA Pro project (design, funding, launch), board capital request |
| CMO | Prices, advertising, positioning, salespeople, market reports |
| COO | Production, capacity investment, quality control |
If the CEO seat is empty, the lead is the CFO, then CMO, then COO.
5. Running a quarter
What students do:
- Read last quarter's results and the AI coach note.
- Check the CEO inbox (solo) and any ethical dilemma.
- Decide. Watch the warnings: "Shops will take at most X units (1.5× last quarter's sales)", bank limits and board warnings.
- Sign off: the lead submits, or a majority of present members approves.
What the instructor does: watch live drafts per team on the console, Pause / Resume, queue a shock, then press "Run quarter N (submitted/playing)". A team that never submits plays the Q0 plan in Q1 and repeats last quarter's plan from Q2.
Suggested time: Q1 takes 20 minutes because teams must read the Q0 report; Q2–Q4 take 10–12 minutes each in class. Homework takes 30–45 minutes per quarter per team.
6. Shocks
| Shock | Effect | Duration | Teaching purpose | Best moment |
|---|---|---|---|---|
| Import tariff on components | Component costs +12% | 2 quarters | Cost pass-through, margin vs share | Mid-game (Q4–Q7) |
| Key supplier fails | Usable factory output −25% | 1 quarter | Operations risk, stock buffers | After teams cut stock (Q3–Q6) |
| Sudden recession | Demand −12% | 2 quarters | Overproduction, cash discipline | When teams expand capacity |
| Demand boom | Demand +12% | 1 quarter | Capacity limits, pricing power | Early (Q2–Q4) |
| Shift to premium | Premium segment share +5 points | 2 quarters | Positioning and R&D | When NOVA Pro is possible |
Besides your shocks, the market rolls random events every quarter (e.g. raw material costs +10% / −8%, recession −10% demand, demand boom +10%, supply disruption −15% output, energy costs +5%, competitor launch, premium momentum). In new games random events are 1.6× more likely and up to two can start in one quarter.
Tip: announce nothing. Let teams discover the shock in their results, then discuss how they read the signal.
7. Game mechanics
| Demand | Rule |
|---|---|
| Market | 162,000 units expected in Q1, about 10% growth; segments Value 40%, Balanced 40%, Premium 20% at the start |
| Segment weights (price / quality / brand) | Value 0.6/0.2/0.2 · Balanced 0.4/0.35/0.25 · Premium 0.2/0.4/0.4 |
| Price sensitivity | Drawn once per game (0.75–1.3), fixed for the whole game |
| Forecast | The decision screen shows a wide forecast range; the demand study (€150K) gives a ±6% band, never the exact figure |
| Other reports | Customer expectations €100K; exact segment distribution €120K; delivered next quarter |
| Price range | €200–€600 |
| Production | Rule |
|---|---|
| Capacity | €1M of investment adds 10,000 units from the next quarter; at most +40% of capacity per quarter (minimum €1M) |
| Quality control | €0–€3M; caught defects are scrapped, escaped defects hurt brand and perceived quality |
| Factory modernity | Raised by capacity investment, decays 3% per quarter, cuts the defect rate by up to 60% |
| Experience curve | Unit cost falls as cumulative units grow |
| Inventory | Rule |
|---|---|
| Holding cost | 3% of ending stock value per quarter (cash) |
| Aged write-down | 10% per quarter on units unsold two or more quarters after production (FIFO) |
| Excess write-down | 10% per quarter on stock above last quarter's unit sales, from the second quarter in a row; each unit written down once at the larger rate |
| Shop limit | Retailers take at most 1.5× a product's last-quarter sales; the rest stays in stock |
| Forced markdown | Flooded shelves: 8% per extra 1× of normal sales, capped at 15% |
| Cash and financing | Rule |
|---|---|
| Credit line | €5M; interest 2.5% per quarter |
| Above 80% used | Interest on the part above 80% doubles to 5% per quarter |
| Board warning | When more than 60% of the line is used or unsold stock exceeds 2 quarters of sales |
| Line full | The bank limits production (and then spending) to what the company can pay for |
| Emergency shareholder funding | Covers any remaining gap; lowers board mood by 15 points and is subtracted from final value |
| Board capital request | Up to €10M; three challenge questions scored 0–2; approval depends on answers and ask size vs cash |
| Interest income / tax | 0.5% per quarter on cash; tax 25% |
| Payment terms | From Q5: 30 / 45 / 90 days, +4% / +7% / +14% appeal, more cash arrives next quarter |
| Dividends and buybacks | Not available in this version |
| Board mood | Rule |
|---|---|
| Levels | Delighted ≥75 · Confident ≥55 · Concerned ≥45 · Uneasy ≥35 · Alarmed ≥15 · Open revolt below 15 (starts at 60) |
| Moves it | Profit +10 / loss −12; loss streaks; share trend ±6; unsold stock above 70% of sales −12 (above 150% −18), above 40% −5; cash falling >20% −12 (>10% −6); low cash −10; high leverage −8; emergency funding −15; capital-increase promises ± |
| Inbox and dilemmas | Rule |
|---|---|
| CEO inbox (solo) | Two messages per quarter from 8 types, plus board messages; no reply by quarter end = the last option, stated in each message |
| Ethical dilemmas | 4–5 per game between Q2 and Q11, drawn from 16 situations; a short written reason is required before choosing |
| Default | No decision = the option named on the card |
| Hidden risk | Shortcuts carry a chance of a scandal 1–2 quarters later; the chance is revealed only after the choice |
Valuation: enterprise value = normalised annual EBIT (average of the last two quarters × 4) × multiple. The multiple starts at 7 and is adjusted for growth (revenue CAGR × 4, −1.5…+2), profitability ((avg EBIT margin − 10%) × 15, −2…+2), market share ((share − 20%) × 8, −1…+1.5), brand ((brand − 40) / 30, −1…+1) and leverage (−debt / €5M, up to −1.5); it is kept between 3 and 14. Equity value = enterprise value + cash − debt. Final shareholder value = equity value − emergency funding.
8. The AI coach
- Uses only the engine's numbers, rounded for display; never calculates.
- Explains the 2–3 biggest drivers, ends with exactly one open question, at most 170 words.
- Never tells teams what to choose and avoids judgement words (solid, strong, weak, good, poor).
- English or Turkish, following the player's language. One note per quarter per team (classroom) or per game (solo), saved and shown again without a new call.
- Solo limits: 12 notes per language per game and 30 requests per hour per game.
In class: ask each team to answer the coach's question in one sentence, then discuss that reasoning when reviewing the next quarter's results.
Suggested course policy on outside AI tools (copy and adapt): "You may use AI tools to understand concepts and check your reasoning. Every decision you submit and every number in your reflections must come from the game's own reports. Name any AI tool you used and what you used it for. You remain responsible for every decision your team makes."
9. Assessment
| Rubric item (console) | Points | How it is calculated |
|---|---|---|
| Value | 40 | Shareholder value ÷ the team's own starting net cash, proportional to the best graded team (a lone graded team is compared with every company) |
| Profitable quarters | 20 | Share of quarters with positive net income |
| Share trend | 20 | 10 + 2 points per market-share point gained since Q1, between 0 and 20 |
| Submitted on time | 20 | Share of quarters submitted by the lead or signed off by a majority |
Export results (CSV) gives two tables. Quarters: quarter, team, company, avg_price, units_sold, market_share_pct, revenue, net_income, ending_cash, brand, quality. Grades: team, company, players, rank_among_teams, rank_overall, shareholder_value, value_growth_x, final_share_pct, share_change_pts, value_40, profit_20, share_20, discipline_20, total_100.
Suggested grade mix: game performance 30%, written reflection 50%, participation 20% [suggestion]. Sample reflection (3 questions): 1) Which decision moved your value most, and what did the numbers show? 2) Where did your team's strategy and actions diverge, and why? 3) Pick one ethical dilemma: who gained, who paid, and would you decide the same way again?
Absences: the lead role covers unfilled roles; majority sign-off counts as submitted; a team with no players is computer-played and not graded.
10. Reading the professor dashboard
| Column / item | Meaning |
|---|---|
| Revenue, Cash, Share | Latest quarter figures per team |
| Risk | Combines minimum cash, defect rate and peak debt |
| CEO score | 0–100: value 30, ROIC 15, strategic consistency 15, financial discipline 10, market 10, risk 10, decision quality 10, judgment consistency 10 (weights rescale when an item is missing) |
| Teaching moments | Auto-generated prompts, e.g. low cash, stock averaging many quarters of production, emergency funding, a dilemma shortcut that became public, a sustained premium |
| Learning objectives | Score per objective you selected when creating the session |
Judgment consistency is 60% fit of each choice to the declared strategy and the team's own written reason, plus 40% quality and completeness of reasons, minus 10 points per shortcut that becomes public. It never rewards always favouring one group and never decides which option is “right”.
11. Debrief plan
| Debrief | Five questions | Data to show | Cold call |
|---|---|---|---|
| After Q3: early mistakes | What did the Q0 report tell you? How did you set Q1 production? Where did unsold stock appear? How did rivals price? What would you change now? | Units sold vs production, unsold stock, write-downs, prices | "Walk us through your Q1 production number." |
| After Q8: strategy and competition | What is your strategy in one sentence? Which rival hurt you most? What did KAI's entry change? Did you invest in capacity or R&D, and why? How did you react to the shock? | Market map, share trend, CEO score, board mood | "Which number would make you change strategy?" |
| Final: value, judgment, ethics | What created value? What destroyed it? Which dilemma was hardest? How consistent were your reasons? What would you tell next year's class? | Valuation, rubric, judgment consistency, teaching moments | "Defend one dilemma choice to the board." |
Leaderboard: show it after the discussion, not before; highlight different routes to value (cost leadership, premium, cash discipline) and pair ranks with the written reflections.
12. Troubleshooting and FAQ
| Issue | What to do |
|---|---|
| Lost console link | Choose “Email me my console link” when creating the session. Otherwise, copy the link into your notes now — it cannot be recovered. |
| Student in the wrong team | The student clicks Leave team on the team screen and rejoins the correct team. |
| A team does not submit | Q1 runs on the Q0 plan, later quarters repeat last quarter's plan; majority sign-off also counts |
| Reloads | Solo games autosave in the browser; team drafts are saved on the server as students edit |
| Language | EN/TR switch at the top of every page; the coach writes in the player's language |
| Accessibility | Not yet formally audited (keyboard and screen-reader support). Contact us if a student needs support. |
| Data stored | Class sessions, team names, member names and roles, decisions and coach notes are stored on the server. They are deleted 12 months after the session ends. Instructors can delete a session immediately with the confirmed Delete session button. Solo games stay in the browser except coach records. |