Why Include Business Simulations in Leadership Development Programs?

From teaching employees industry-specific business concepts to improving teamwork skills, business simulations are incredibly effective. Leadership development, though, is one of the most advantageous benefits driven by the application of simulation in business . But what exactly do business simulations help accomplish? Here are the top 5 ways business simulations improve leadership development programs:

1. They are stimulating and engaging

Let’s be honest – no one enjoys sitting through PowerPoint-driven lectures. Still, many employers attempt to run leadership development programs by hiring guest speakers or giving a lecture themselves. This method is outdated and ineffective. Over 65% of the population are visual learners which means an audio presentation won’t engage them. Business simulations help learners retain more information because they are stimulating and relatable. Business simulations allow employees to perform tasks that help develop leadership skills and make decisions in a safe environment, offering them an entirely different perspective and immediate feedback.

2. They improve decision-making capability

Within a business simulation, participants do, rather than simply read or listen. Learners in a leadership development program take on manager or even C-Level roles within a simulated environment and perform a series of tasks throughout the experience that require them to wrestle with tough, real-life decisions. They must contend with unexpected challenges and determine how to handle them properly. Because business simulations are more realistic than they are theoretical, employees are able to improve their decision-making abilities. They are actually making decisions and witnessing their impact, not just talking about them.

3. They build teamwork skills

Participants generally work through business simulations in teams. Unlike typical work days in which they may complete tasks in isolation, simulations promote collaboration and an immediate awareness of how a decision from one team or department impacts another. Increased communications and collaboration are paramount for successful simulation teams to work effectively and without incident – just as in real life.

4. They expose how businesses are run

In the real world, employees are exposed only to their tasks. Within a business simulation, however, they have the opportunity to witness how a business is truly run. When participants assume the role of a manager or CEO, they participate in the day-to-day company operations . They make decisions during simulations that advance their development as leaders. This includes handling disputes to managing other employees – effective decision making that goes beyond business operations. This, in turn, tests their character by requiring them to respond patiently, professionally, and strategically. A business simulation also incorporates assessment opportunities. Performance is reviewed throughout the simulation and especially at the conclusion. To develop leadership skills, employees must become familiar with tests of character and frequent assessments.

5. They offer employees “real” practice

There is a huge difference between studying to be a leader and actually being a leader. No amount of studying is comparable to hands-on experience. While it may not be wise to throw an inexperienced employee into a leadership role with hefty responsibilities, they can gain “real-life” practice through a business simulation. Obviously it isn’t real-life experience, but it is the next best thing. Business simulations are designed to be as close to reality as possible. Participants gain valuable and applicable experience throughout the leadership development program.