Industry Insights

Using Business Simulation Games for Leadership Training & Development: How it works

Posted by Alexandra Harris on Aug 28, 2020 2:00:45 PM

In the modern era of training, organizations have had to invest heavily in their human resources, ensuring that they are up to date and well equipped for the multitude of business challenges they face. Leaders must be agile, adaptable, and ready to think creatively, but how can organizations effectively train people for such a position of responsibility? How can businesses align the theory of leadership with an opportunity for the practical? One effective way is through experiential learning, using business simulation games to develop both the soft and hard skills needed to lead teams and organizations towards success, and in this piece, we are going to explore how that is done.

What is a business simulation game for leadership training?

Developing leadership skills with business simulation games

A business simulation game for leadership is an app, game, or exercise that allows participants to run their own companies and take key strategic and operational decisions in a realistic business environment. Participants must take the role of leaders and manage a simulated scenario, along the way collaborating to achieve desired results, whilst heeding off competition and adapting to external threats and opportunities. There are clear rules, a wide range of business decisions to be made, and continual feedback throughout the business simulation game that help the participants to demonstrate and practice their leadership skills.

The benefits of using business simulation games for leadership training and development
For this section, allow us to split the benefits into two sections, participants and organizations:

Benefits for participants Benefits for organizations
Real-time consequences allow participants to make tough decisions without real-world risk. This allows them to see cause and effect and see how different factors in a business impact each other, in effect, this is experiential learning at its core. Organizations can rapidly boost engagement among their collaborators by creating engaging and motivational learning environments that are fun, challenging, and require the use of multiple business skills, such as dealing with people, navigating difficult decisions, and practicing leadership strategy.
Simulations run over the span of multiple business years, each round (business year) allows participants to analyze the effectiveness of their previous decisions and adjust their strategy accordingly. This is a hands-on way for participants to boost their agility, as they must iterate continually to find the best decisions to lead them to success. Organizations can use business simulation challenges to create greater cross-functional and cross-geography alignment. By mixing participants from different business units, functions and locations in simulation teams, they create strong links between these collaborators who develop a deeper knowledge of other parts of the organization.
Accelerated learning in a short space of time is enabled by business simulation games for leadership: participants are able to experience years of market activity in just several hours. Large amounts of data are collected during a business simulation game, giving organizations the chance to spot what might be missing (such as skill gaps) and whether key strategic issues are being repeated.
Hypothetical and imagined scenarios vary from the day-to-day business management to a challenging VUCA (Volatile, Uncertain, Complex, Ambiguous) environment - by varying these challenges, leadership skills are tested to the max and those who stay calm and strategic often come out on top. When an organization is facing a transformational change, or a key milestone such as a product launch, using business simulations helps to prepare participants for what may come and develop a common understanding of what will be faced.
Real-time feedback is key for leadership training and development, as participants benefit massively from an immediate action and reporting learning process. This feedback loop provides motivation to move on and trial a different approach. An organization gains far more than they expect through business simulation games, as they empower their staff by giving them a chance to put theory into practice and demonstrate their worth.
Business simulation games create an emotional impact as opposed to a merely intellectual one, and research shows that emotional memories last much longer than factual ones. Long-term retention of learning is thus far more likely with a business simulation.  

 

How to apply leadership training through business simulation games

Now that you've explored the benefits of the business simulation game for leadership training and development, and perhaps decided on whether simulations are right for your training programs, here are some tips on the ways in which they can be employed in an organization.

Tips on employing business simulation games in your training programs

1. Design a simulation to meet impending needs

Some businesses or organizations use simulation games as an opportunity to test skills and introduce a fun challenge to their teams, but more focused organizations will see the potential to apply the practice for problem-solving, by procuring a tailor-made simulation experience that meets existing and future needs. These are sometimes referred to as Concept Simulators, and they provide a very specific function, with the idea being that leaders are best developed when presented with realistic and specific situations that demonstrate impact across multiple departments.

2. Make simulation games a fixed part of leadership training

Hosting a sporadic or infrequent simulation game, rather than having it as part of the core leadership training strategy can lead to some confusion within the ranks. It’s far more impactful to use them as the practical section of leadership training, giving professionals the chance to take theoretical information gained from seminars, workshops or meetings and apply it.

3. Focus on the group, not the individual

Of course, individual simulations exist, but when examined, they often fail to assess the key aspect of being a leader - how they impact a group. Teams, regardless of location, can either be used in situations where they collaborate, or where they compete, and different outcomes can be derived by trying both. Working together demonstrates teamwork, communication, and delegations, whereas working competitively can show useful strategic traits and commitment to decisions.

4. To train, to develop, or to refresh, that is the question

Simulation games present so many interesting and actionable opportunities to organizations, as long as they are designed well, applied as part of a strategy, and are outcome-driven. At the start of any prospective simulation experience, the organization must decide whether they are looking to:

  • Train new leadership qualities, along with updating core professional skills
  • Develop and hone particular skills or nurture necessary traits
  • Refresh their teams to maintain their competency and ensure that they remain up to the task

Conclusion

StratX Exl is a world-leader in leadership development and has been running simulation-based programs to build leadership qualities and skills for Fortune 500 companies for over 35 years. See how your business can leverage this innovative training to move your organization forward by reaching out to the team today.

Where to next?

Do your leaders have the key leadership skills necessary for success? Download our free white paper on the top leadership and development trends to explore the leadership competencies that will impact leadership training and development programs over the coming years.

Trends in Leadership

Topics: Experiential Learning

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