In 2019, global spending on leadership training was an impressive $370 billion. However, only 14% of CEOs feel that they have the leadership talent necessary to execute on business strategies. Even when that investment is made, many leadership development programs fall short. But learning doesn’t always lead to better organizational performance, and people revert to the old ways of doing things.
Part of the reason for this is that they fail to include an important component of successful leadership development: Disrupting mindsets. Disrupting a leader’s mindset is the critical first step toward changing behavior and organizational performance. Leadership development programs need that revelatory moment for leaders to prioritize new or different behaviors.
Incorporating business and leadership simulations into leadership development is the best way to solve this. These simulations place leaders in real-world situations, forcing them to wrestle with different approaches. They serve as a bridge between concept and application — and they can be used in just about every industry to help shape and mold the future of the workforce.
Here are a few of the benefits of an experiential and simulation-based approach to leadership development:
1. It catches leaders in the act of being themselves.
Leadership development isn’t all that tricky. The techniques and skills are relatively straightforward, and it doesn’t take much for people with smarts to catch on. What’s much harder for leaders is to recognize how they currently behave during key moments — and the impact of their behavior on organizational success. Simulations do a great job of reflecting how leaders conduct themselves in a pressure situation. Holding up a mirror to what they and their peers do today is an important first step in leadership development and can be a catalyst for necessary shifts in their mindsets and behaviors.
2. It forms a shared memory of the future.
Behavior change introduced during simulations persists in the real world at a much higher rate than traditional leadership development. Part of this is due to the triggers people encounter in a simulation. They’re often the same as those in their day-to-day lives. People experience a trigger, react, then witness the outcome.
This establishes what Arie de Geus refers to as shared memory in “The Living Company: Growth, Learning and Longevity in Business.” People form shared memories surrounding that series of events and how the cohort responded. When returning to the real world, that behavior change persists. Leaders remember the potential outcome of an action before they take it.
3. It creates psychological safety.
Simulations are most effective when they’re designed to reflect one’s organization and the tensions it will face. Leaders discuss and respond to realistic situations in a safe space, allowing them to experiment and try things they would not be confident enough to try in the real world. In essence, it gives them space to practice leadership without the pressure of real-life performance.
4. It encourages hyper-engagement.
Business simulations allow for peer-based social learning. They offer a chance to learn from peers’ perspectives and reactions to a situation. Often, there’s competition thrown into the sessions. Leaders compete to outdo one another — and they become hyper-engaged and have fun.
Business simulations place leaders in realistic situations they’ll experience and allow them to work through these situations with peers while viscerally feeling the impact of different approaches. Many participants suggest this kind of experience doesn’t feel like leadership development — it feels like they are getting help and practice in running their businesses, and they are grateful for that. When all is said and done, that might be the best testament of all.