Simulate Leadership for Success

More than ever, organizations recognize the value of good leadership. According to the Corporate Leadership Council, organizations with high-quality leadership outperform their competitors in shareholder returns and market capitalization, whereas poor leadership is related to an average of $1.2 million in net losses (Figure 1).

There is an acronym that sums up the post-recession economy: VUCA — volatile, uncertain, complex and ambiguous. Coined by the U.S. Army War College, VUCA is the new normal — leaders encounter unanticipated, novel and complex situations for which they have little experience. In the world of global credit crises, budget cuts and massive changes in consumer spending, simulations can help learning leaders effectively and efficiently prepare leaders to navigate a VUCA world.

Who Needs the Real Thing?
Much as flight simulators teach pilots how to manage life and death situations without paying the ultimate price, some leadership lessons should not be learned on the job. “Flight simulators put you in situations you hope that you will never encounter in the aircraft,” said Mark Gasta, chief people officer of Vail Resorts and a former commissioned officer and pilot in the U.S. Army. “In doing so, they give you the confidence that with the proper training and preparation you can overcome almost any situation.”

For example, a leadership simulation allows participants to practice skills such as disaster response, managing a difficult product launch, losing a key customer or navigating a financial slump. In a virtual simulator, a candidate might lead a fictitious organization for three hours. The candidate is bombarded with emails, telephone calls or online meetings with fictitious co-workers, prepares and presents a strategic plan to a board, coaches a resistant superstar, conducts damage control for a product launch or makes statements for the media about a corporate social responsibility issue. All role-plays are live and conducted with trained actors, and the constant stream of emails mirrors a leader’s everyday life.