Using Business Simulations in Leadership Development
By Ameet Thakkar, Senior Consultant with OPP®
Introduction
What are business simulations?
Why use business simulations?
How do business simulations work?
Benefits of business simulations
Introduction
Several research articles point to the fact that active development of managers within an organisation delivers tangible business benefits1 including increased sales. Despite this, few organisations actively practise the development of managers, let alone possess an integrated talent management strategy! A recent CIPD survey revealed that 49% of organisations do not have a talent management strategy in place. This therefore leaves these organisations facing a number of issues, including the loss of high calibre mangers to competitors, and a lack of succession planning for senior managers who leave.
OPP® develops talent management strategies in partnership with organisations, which aid the delivery of effective, long-lasting and motivating personal development for participants. Business simulations are valuable during the initial stages of this process to identify needs and kick-starting the development process.
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What are business simulations?
Business simulations replicate relationships and decisions in a business environment and allow the collection of live information about a person’s interpersonal style, intellect and drive. Participants are given a role as a senior manager in a complex but fictitious organisation and given information on realistic day-to-day operational and strategic business challenges. The fluid and dynamic operating environment of the simulation presents participants with a number of opportunities, threats and problems to be resolved in 'real time', working alongside other delegates over the course of a day.
This metaphor organisation directly mimics a real organisation’s demands, in terms of a business model, strategy, culture, conflicts and other important issues. It is designed to elicit behaviours reflecting those that the individual would characteristically display in managing a given organisational situation, usually at a management level several steps above the current position.
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Why use business simulations?
Business simulations have objectives at two levels. At the individual level, they aim to develop current or future leaders in order to achieve a greater alignment between individual skills and organisational needs. At the organisational level, information from development events can be analysed to help identify future potential leaders and provide information on strengths and styles of a whole cohort of managers within an organisation. This strategic-level information can inform talent management strategies. For example, if a cohort of managers has a common development need of people management skills, group interventions can be used at this level, and also in the cohort below, to ensure these skills are fully developed in future generations of managers.
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How do business simulations work?
Simulations can be either structured or free-flowing. The style used depends on the objectives for using the simulation and the competencies that are to be measured.
Structured simulations run in a similar way to assessment/development centres. Participants have a full timetable of group and individual activities and are observed while they carry these out. Activities may include group meetings, in-tray exercises, one-to-one meetings, presentations, and more. All of the activities are based in the same fictitious organisation, and the delegates remain in the same role throughout the day.
Free-flowing simulations are much less structured, and the delegates are largely left to arrange their time and activity as they see fit. Generally there are a few key activities, such as meetings and presentations, which they are required to attend, but how they interact and what they decide to do is left to their own discretion.
OPP consultants observe the delegates' behaviours while they are adapting to these challenges. Afterwards, they provide in-depth feedback, incorporating evidence from psychometric tools, such as the MBTI® and 16PF® questionnaires, 360º questionnaires, such as the Benchmarks® questionnaire, peer feedback, self-evaluation and the simulation. Feedback sessions are interactive and the multiple sources of information provide delegates with a greater understanding of their own skills and development needs, helping them to plan their development. Candidates also receive in-depth reports, which they are encouraged to share with their managers.
This process forms the springboard for subsequent objective setting, ongoing coaching and different forms of action learning. This enables the individual to move into the next phase of their own development, as a leader in the organisation.
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Benefits of business simulations:
- The simulations usually last for a day, which makes them more realistic for participants and helps to elicit more authentic participant behaviour.
- The active participation in such a day provides participants with experiential learning of how they deal with large amounts of information, challenges from peers, making decisions and having to present information to senior managers.
- The simulations offer candidates a safe environment within which they can explore their own skills, abilities and personal styles
- All OPP business simulations can be based within industries different from those the participants have worked in, allowing a 'level playing field' when performance comparisons are made.
- OPP consultants are experienced at observing complex simulations and can provide significant insights and observations.
- OPP feedback sessions provide a confidential setting in which to explore development needs and issues with confidence.
- This means the outcome cannot be predicted, so candidates cannot benefit from preparation or inside information about the content.
- Every 'run' of the simulation is different because of the choices participants make.
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OPP has a number of off-the-shelf business simulations at senior management, middle management and junior management levels, enabling their benefits to be realised at all levels of an organisation. To discuss how OPP can help your organisation to use business simulations as part of a talent management strategy, please contact us on 01865 404636 or by email at: consult@opp.eu.com
1 Naish R. & Birdi K (2001) Evaluation of the Effects of a Management Development Centre Program on Development, Retention and Business Performance. The British Psychological Society 4-5 January 2001 Occupational Psychology Annual Conference, Winchester.Book of Proceedings, 24-25. |