Business Simulations as Leadership Observation Labs

A quote often attributed to Plato states, “You can discover more about a person in an hour of play than in a year of conversation.” And when the play takes place within the serious gaming of business simulations, the discoveries and insights can be extremely useful in leadership development.

Business simulations provide a fast-moving backdrop upon which business acumen and emotional intelligence are both on full display.We have worked with many of our clients to turn their simulation courses into “Leadership Observation Labs”. In this approach, participants not only learn and practice business skills and decision-making by running a simulated company as part of a team, but their behaviors are also observed by senior leaders or executive coaches as they do so. Our clients have used the insights gained from these observation labs to strengthen and develop the business skills and behaviors of their emerging leaders.

Listed below are several case examples of how we have worked with our clients to turn their simulation courses into observation labs: the approaches used; the outcomes; and a few best practices of each approach.

What you will see from the case examples is that one size does not fit all: companies with successful observation labs have defined specific objectives of how the observational data will actually be used, and have developed an approach tailored to those objectives.

Leadership Observation Labs – Approaches and Case Studies:

1. The “Knowledge Transfer/Succession-Planning” Approach: Used by a leading insurance carrier and an equipment dealership association.

  • Approach: An experienced senior leader is placed on a team and provides business and leadership coaching and mentoring throughout the course either to a specific individual or to the entire team. The senior leader actively participates on the team, helping shape the decision-making process and explaining details behind the decisions.
  • Outcomes: The mentoring relationship facilitates and speeds-up knowledge transfer of the “nuts and bolts” of the business, decision-making approaches, and leadership styles.
  • Best Practices:

– Take developing leaders on a tour “behind the clicks” to show how the decisions they made would play out in the real world.

– Run the lab with intact teams from within a department, division, or function.

2. The “Executive Coaching” Approach: Used by a Tier 1 automotive parts supplier and a large aerospace and defense company.

  • Approach: Professional Executive Coaches rotate through team rooms, observing leadership behaviors of specific individuals who they are coaching.
  • Outcomes: Information gathered is added to other data collected in previous/future observations and is used in one-on-one executive coaching sessions.
  • Best Practices:

Combine with leadership/EQ training.

– Executive Coaches should develop a long-term relationship within the company and with their clients to establish trust and credibility.

3. The “Unexpected Interruption” Approach: Used by a large aerospace and defense company.

  • Approach: Experienced Program Managers come into the team rooms at specific points during the rounds of competition and interrupt each team for 5-10 minutes, quizzing them on their strategies, plans, key financial metrics, etc.
  • Outcomes: The “quick hit” interruptions of the teams inject realistic disruption and pressure. Observations are used by the PMs to challenge teams during their final presentations and to score team performance.
  • Best Practices:

Do not announce that the interruptions will occur; more insights can be gained and more learning will occur when the interruption is unexpected.

– Conduct the interruptions in a collaborative manner so that meaningful course-corrections and off-the-cuff learning can also occur.

4. The “Behavioral Shaping” Approach: Used by a Big 4 management consulting company.

  • Approach: Firm’s Partners, Directors, or Senior Managers co-facilitate class lectures and add “war-stories” and practice-area specific content. They also coach teams on real world business applications and observe behaviors during competitive rounds.
  • Outcomes: Coaches identify and correct the sometimes subtle behaviors that can have negative impacts on real-world clients and consulting teams.
  • Best Practices:

Experienced staff should fill the co-facilitation role so that only relevant, time-tested behaviors are communicated and shaped.

The importance of behavioral coaching needs to be clearly stated by the co-facilitator so the process is not dismissed or minimized by the participants.

5. The “Earnings Call/Activist Investor” Approach: Used by a leading insurance carrier and a large aerospace and defense company.

  • Approach: Experienced senior leaders play the role of activist investors/analysts during team “earnings call” presentations at the end of the class, asking probing questions about how the team’s strategy would play out in the real world, financial metrics, sustainability, etc.
  • Outcomes: Allows senior leaders to observe individuals’ behavior “under fire” and ability to think on their feet. Used to identify high potential leaders.
  • Best Practice:

– Senior leaders need to be able to quickly analyze each team’s competitive data from the simulation rounds and use the information to pose relevant, and different, questions to each team.

6. The “Role Play” Approach: Used by a US motorcycle company, a leading insurance company, and a large aerospace and defense company.

  • Approach: Experienced leaders role-play and present a specific challenge to each team. For example: an owner coming back from an extended absence and demanding answers about the company; an insurance agent irate at direct-selling; an upset customer. Leaders observe participants’ behaviors in dealing with the potentially explosive situation.
  • Outcomes: Motivates the difficult discussions of specific plans, results, and numbers that participants would face in the real world. Allows leader to observe, assess, and validate/correct key behaviors.
  • Best Practice:

– To establish a baseline from which to measure observations, leaders should try not to go off-script during their role play.

7. The “Under the Microscope” Approach: Used by two top-5 insurance carriers.

  • Approach: An experienced leader is embedded as a behavioral coach with each team for the entire class including lectures/discussions:

– Observe and document team and individuals’ behaviors during competitive rounds of play and during lectures/discussions.

– Do not contribute to decision-making or answer questions.

– Provide group and one-on-one behavioral coaching during rounds, lunches and breaks, and at end of day.

  • Outcome: Coaches meet together after the course to discuss observational data and to identify “diamonds in the rough”; determine promotions, demotions, and re-assignments; and candidates for stretch-projects.
  • Best Practices:

Tell participants they will be observed and describe how the observational data will be used.

Prepare observers before the course with bios and performance evaluation data.

– Develop and provide one consistent form for all observers to use to collect data both on individuals and on teams and the behaviors and attributes they should be looking for at each point in the course.

– Be prepared for a public relations challenge – the intense scrutiny used in this approach can negatively bias participants’ and teams’ behavior during the course. Word will spread that the class puts participants under a microscope, and people may be reluctant to attend!