Leveraging simulations to assess leader quality and drive organizational success

It’s fairly straightforward to evaluate someone’s practical abilities and technical skills. For example, a simple assessment can reveal the level of an individual’s computer programming skills. However, many of the skills required of today’s leaders, such as emotional intelligence and interpersonal or inherent skills, are often regarded as intangible and difficult to measure. Fortunately, through the power of scenario simulations, we see the potential to assess and unlock leadership potential in a measurable way.

The stakes are high for leadership development and succession

Given the costs of recruiting, selecting, onboarding, and training leaders, identifying leadership potential and performance, and developing bench strength for critical leadership roles can be daunting. We know that leadership quality impacts everything from profits to productivity, employee engagement, and customer loyalty. Yet research from the Corporate Executive Board estimates that 50% to 70% of new leaders fail within 18 months of taking on a role, regardless of whether they were an external hire or promoted from within. In today’s increasingly complex and interconnected business world, preventing leadership failure is more important than ever. 

The role of simulations in leadership development decisions 

Leadership development and succession planning decisions are fraught with risk, bias, and subjectivity. Targeted scenario simulations are an important piece of the puzzle in providing the most objective, fair, and accurate assessments. Just as pilots and astronauts use flight simulators to increase safety and reduce learning time, organizations are turning to leadership simulations to assess leader quality and make informed development decisions. Unlike many other assessment methods, good simulations objectively measure observable leadership capabilities in realistic scenarios. By presenting leaders with ambiguous situations that reflect real-life challenges, we create a controlled environment that allows for critical thinking, decision-making, and reflection, providing valuable insights into how leaders perform in challenging situations and how they inspire, guide, and develop others. Doing so enables us to quantify leadership potential and generate valuable data for development and succession planning efforts.

4 reasons to assess leadership capabilities with simulations

  1. People can’t fake it or trick the system: Well-designed simulations objectively assess participants’ performance in leadership scenarios. They accurately mirror real job assignments, pressures, and scenarios, making it impossible for leaders to fake their way through the experience. 
  2. Measure observable capabilities: Simulations allow objective observation of leaders as they are faced with new problems, ambiguous projects, and challenging subordinates, ensuring a more accurate assessment of their skills in action. 
  3. Save time and money: Assessing leadership qualities via simulation efficiently measures various aspects of a leader’s profile, enabling faster and more informed decisions.
  4. Inform better leadership decisions: Objective insights from leadership simulations serve the candidate selection process by providing targeted feedback for development and highlighting critical skill gaps.

A crucial caveat: the simulation must be well-designed. To ensure an accurate evaluation of leadership potential, scenario simulations should be designed with specific features in mind. These features include:

  • A contextualized experience that replicates real-life challenges and dilemmas that leaders may encounter
  • Encouraging leaders to play in the gray by presenting situations that require them to navigate ambiguity
  • A safe learning environment that enables participants to fail forward, explore alternative paths, and learn from mistakes
  • An engaging experience that enhances immersion and ensures maximum effectiveness

Layering on leadership development

Well-designed scenario simulations offer more than just assessment; they provide a platform for meaningful leader development. By creating immersive learning experiences that combine real-life challenges with collaboration and critical thinking, simulations help individuals enhance their decision-making skills and bridge gaps in their leadership abilities. The data captured from these simulations become actionable insights that can guide targeted development initiatives.

One way to analyze leader performance

There are numerous ways to assess leadership qualities through scenario simulations. Here’s one example—have leaders individually respond to a series of challenges presented in the simulations, and then generate a comprehensive dataset by collecting their responses and analyzing their problem-solving processes. For example, if we incorporate 6-8 simulations focused on coaching and gather corresponding responses, we can assign a leadership quality score. Next, we can correlate this leadership quality data with larger performance metrics or conduct regression analysis to gain deeper insights. By examining the relationship between leadership scores and key business outcomes, such as speed to product delivery and increased sales, we can highlight the potential impact of developing leadership skills. This analysis enables us to demonstrate the value of leadership development and succession management. 

Make decisions about development and succession management with confidence

In a skill-based economy that demands adaptable and versatile leaders, succession planning must focus on measuring future-oriented skill sets that align with the changing landscape. The power of simulations lies in their ability to provide actionable data, bridge gaps in leadership competencies, and drive measurable business outcomes. Organizations that leverage simulations in leadership development can align leadership capabilities with strategic objectives and maximize their talent investments. Reach out to our team to learn more about how we create tailored or fully custom immersive learning experiences to help you identify and develop future leaders. 

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