An introduction to using business simulations for leadership development, including: - Types of simulation programs available. - How custom business sims work. - Scenarios best suited for custom business simulations. - Who is involved in custom business simulations. - What to look for in a provider of custom business simulations.

1. All about business simulations
for leadership development.
A starting place for talent management executives
who’ve been asked to ‘find something that works.’

2. The problem:
How to make leadership
development perform .
All large companies engage in leadership development training—
with varying degrees of success. Talent managers are increasingly
asked to deliver applicable RESULTS: relevant and engaging
experiences for emerging and established business leaders.
Training and development must organize leadership programs
grounded in real business decisions and problem-solving. Instead
of sitting in a classroom, reviewing case studies that may or may not
resonate, your top brass wants leadership development to apply
directly to your business, your industry... your on-the-ground, on-the-fly,
decision making.
© Simulation Development Group

3. The choices:
‘Solutions’ abound.
Executive Education Business Simulations
Typically led by university professors, Business simulations are widely used among
executive education programs sequester the Fortune 500 to move learning from the
executives and senior leaders for class- classroom to the real world. Simulation
room training. Content customization programs let teams practice decision-making
varies by institution, and is highly de- about actual problems they face. Executives
pendent on budget. Classes are typically experience in real time how their decisions
taught by business theorists (i.e. aca- affect one another and the bottom line.
demics), not business leaders.
Programs vary widely based on the service
In-House Solutions provider. Examples include:
— Live, team-based simulations that
Some organizations, fearing a service combine technology and live
provider simply can’t understand their interaction.
business, or simply hoping to save — Virtual-only simulations for solo
money, will choose to develop a training.
leadership training curriculum in-house. — Competitions in which teams use
simulation programs to ‘win’ complex
decision-making scenarios.
— ‘Off-the-shelf’ solutions for immediate
use, with no customization.
© Simulation Development Group

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Business Simulation
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We’re accustomed to hearing that business simulation sounds like an idea from
The Matrix. But rest-assured, it’s highly practical; simulations attempt to duplicate
the type of learning that happens on the job, over years of experience. How does it
happen?
Technology: Custom simulations will model the decisions your company’s leaders
face every day, and the complex effects of those decisions. Simulators are able to
capture all the possible decisions an individual will make and quantify them.
Business Acumen: The very best simulators are designed by business leaders with
C-suite experience, not business theorists. Working together with your in-house
experts, highly experienced simulation developers will capture the essential issues
that drive your organization to grow and out-matneuver competitors—and then map
those issues to a complex web of decisions.
Live team-building: Best-in-class simulations take place live, not in cubicles. Your
company will host a forum—one-day or multiple days—and break participants into
teams. The goal: to design an experience that allows each individual to live a day in
the life of your CEO. Simulations help employees step out of their own silos and
understand multi-faceted, business-changing decision-making.
© Simulation Development Group

5. Business Simulation
In practice, it looks like this:
1. Teams make multi-disciplinary decisions in real-
time, getting immediate feedback about how the
group’s mix of decisions affects their colleagues,
the bottom line, and intangibles.
2. Teams join together to see groups results, study
how to improve strategic thinking and actions.
3. Each team regroups to apply what they learned
and re-test decisions, results.
Simulation participants practice making business-
changing decisions, and see immediate results.
© Simulation Development Group

6. Scenarios best-suited for sims.
Aligning To Change Silo-Busting
A company undergoing Organizational silos are
change—whether due to inefficient and expensive.
reorganization, a new sales Simulations are an excellent
initiative, or new marketing way for employees from
strategy— may need to align different disciplines to under-
their employees under a new stand the unique challenges of
strategic directive. their colleagues.
Leadership Development Business Acumen
Many large companies use For organizations seeking very
simulations to engage emerging specific skills development
and current business leaders. related to their business and
Simulation tools teach practical industry, simulations can help to
business skills, as well as the model complex business
intangibles of leadership scenarios, and test out
excellence. decision-making under duress.
© Simulation Development Group

7. Business Simulation
Examples, please!
CASE STUDY: Fortune 500 Pharma Company Faces Talent Crisis
Talent management has become a critical risk for the com- Executives gather and are organized into teams to consider
pany; a cohort of dozens of so-called Boomers within the highly complex business problems:
company—all senior executives with decades of pharma- — What effect will regulation have on the lifetime value of the
ceutical management experience—is readying to retire
over the next 10 years. Management wants to identify a existing drug portfolio?
program that will accelerate learning for targeted emerging — How should sales and marketing adjust to these changing
leaders within the organization. conditions?
Talent development leaders study executive education pro- — What pressures will R&D face given a smaller drug pipeline.
grams, but find that many of the lessons are consistent with an — How will pricing strategies change in the coming decade?
MBA curriculum—which at least half of the targeted “emerging
leaders” are already pursuing or have completed outside of Rather than attending a classroom discussion about how, in
work. What’s more, the academic curriculum lags real-world theory, these issues will play out within their industry, execu-
changes in the industry. Management wants a training program tives are practicing decision-making by making adjustments to
that will contend not only with the intangibles of leadership de- pricing, for example, and learning how these adjustments may
velopment, but also the real-life, complex decisions facing sen- affect other areas of the organization.
ior executives.
And because executives are practicing their skills, rather than
The company hires a business simulation provider to develop a engaged in a more passive memorization of skills, their lesson
customized solution that can manage the complexity of devel- retention is higher, and their level of engagement is higher.
oping leaders in a fast-changing industry such as pharma. After
a short time period of development, the company is ready to go
live with their first simulation executive forum.
© Simulation Development Group

8. Who’s involved from your org?
Subject Matter Experts (SMEs)
Your simulation developers will solicit help from your internal subject matter experts.
The actual people involved depend on the industry and training. For example, a
simulation focused on operations optimization may include product engineers,
manufacturing, logistics, and sales & marketing.
Business Strategists
Include ‘big picture’ thinkers on your review team, whether from the C-suite or other
senior, strategy-setting roles. These individuals will offer a better sense of how your
organization’s disciplines (or ‘silos’) work together and how they malfunction. The
simulation should try to uncover and combat some of these organizational ‘sticking
points.’
Human Resources & Talent Development
Your talent management team will likely serve as project managers, ensuring the var-
ious stakeholders--both internal and external—maintain strong communications and
ensuring the project is developing at the right speed.

9. What to look for in a
sim service provider.
This isn’t hard...
You may think hiring the right vendor is complicated because sim
technology seems like a ‘black box.’ Actually, the hiring decision
should be straightforward. Make sure to ‘check’ these three
boxes
Business leaders, not business ‘theorists.’
Hire simulation developers who have on-the-ground business
experience. These individuals will be responsible for knitting
together all the issues your company faces, and delivering a
highly functional, realistic decision-making simulation.
Client references.
The company you hire should have at least dozens of simulations
completed, across many industries. Building simulations is an art
and a science, and only companies with strong experience—and
clients who believe in their work—should be on your short list.
A great user experience.
The best technology solutions are barely noticed by their users.
Ensure your provider offers an easy-to-use interface, with rave
reviews from client subject matter experts and users.
© Simulation Development Group

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