Simulate Leadership for Success

Further, simulations are more effective at predicting performance and leadership potential than interviews or situational judgment tests. A 2011 study by PDI Ninth House, a leadership consultant, showed that simulation ratings had stronger relationships with on-the-job performance than more traditional methods. Candidates scoring in the top 25 percent also were four times more likely to be high performers.

Today, the term simulation includes everything from simple classroom role-plays to day-in-the-life assessment centers. As applied in organizations, however, simulations differ on many dimensions such as purpose, cost, skills assessed and level of realism. For example, behavioral measurement by trained observers is characteristic of assessment center simulations and is particularly useful to identify leaders’ strengths and development needs in the VUCA world (Figure 2).

When organizations prefer to avoid real consequences of leaders’ failure, either virtual or day-in-the-life simulations where participants assume a role in a fictitious company may be appropriate. Until recently, these simulations were generally reserved for large corporations that could afford the design and administration costs. In 2005, reported design costs were as high as $500,000 and $9,000 per participant, according to the Corporate Leadership Council. Today organizations have access to cost-effective virtual simulators that run around $1,500 per leader.

In addition to avoiding the cost of failure, other benefits include reduced design costs, eliminated facilities and travel costs, easier deployment, global reach, and rapid customization of content and report format. Virtual simulators, which often last a few hours and are administered through email, phone calls and online meetings, may best mimic business interactions in today’s technology-rich workplace.

Boosting the Real With the Fake
Baxa Corp., a medical technologies provider, employs a combination of virtual simulators and on-the-job assignments in its high potential program. “Cost is the biggest differentiator for small and mid-sized companies,” said Susan Starkey, Baxa’s organizational development manager. “They often go with a 360 or personality test instead of a simulation. But 360s can be painful, especially for early leaders. Simulations offer a fun alternative to discover strengths and development needs.”