A leadership simulation is an exercise in which managers make decisions in a realistic but safe scenario and then work through those decisions with a facilitator. There is no single price tag: the cost depends on what goes into the programme. Whether it pays off depends on whether the organisation measures the change in behaviour and its effect on results.
Quick Overview
What you will learn:
- What research says about the effectiveness of leadership training and debriefing
- Why simulation fits the experiential learning cycle
- Which cost components make up a simulation programme
- How to judge whether the programme pays off
Who this article is for:
- HR and L&D teams in large organisations
- Board members and directors planning development for senior managers
- Financial controllers reviewing training budgets
Reading time: 7 minutes
Why a Simulation Rather Than Another Lecture
A meta-analysis by Lacerenza and colleagues (pubmed.ncbi.nlm.nih.gov) pooled data from 335 independent samples and assessed leadership training against the four Kirkpatrick criteria: reactions, learning, transfer to the job and results. Training proved effective at all four levels, but how effective depended on the programme’s design. Stronger effects were associated with, among other things, a needs analysis, feedback, a mix of delivery methods (practice in particular), sessions spread out over time and face-to-face delivery.
A simulation brings these elements together in a single format: participants practise a decision, see what it leads to and get feedback on it. Fewster-Thuente and Batteson (pubmed.ncbi.nlm.nih.gov) analysed what first-year students on health professions programmes said after a short simulation of teamwork and found every stage of Kolb’s cycle in their accounts: concrete experience, reflective observation, abstract conceptualisation and active experimentation.
The Debrief Is Where the Learning Happens
Without a debrief, a game is mostly an experience. In a meta-analysis of 46 samples covering 2,136 people, Tannenbaum and Cerasoli (pubmed.ncbi.nlm.nih.gov) found that debriefs improved the effectiveness of teams and individuals compared with control groups, and that the effect was similar in simulated and real settings. The authors stress the importance of aligning what the debrief focuses on with what is being measured, along with structure and skilled facilitation.
For a senior leadership programme, this means planning the debrief as carefully as the scenario itself. A good debrief answers what happened, why we chose what we did and what we will do differently back at work.
What It Costs: Components, Not a Price Tag
Research rarely reports what simulation costs. A review by Zendejas and colleagues (pubmed.ncbi.nlm.nih.gov) found 967 comparative studies of simulation-based training in healthcare, of which only 59 reported any cost element at all. The figures most often given were for the simulator and training materials, while some potential cost components never appeared in any study. The lesson for a business is that it is easy to understate a programme’s cost if you only look at the supplier’s invoice.
A full account includes:
- participants’ time — working days that senior managers spend away from their day jobs; it never appears on an invoice, so it is easy to leave out;
- scenario development — tailoring the exercise to the company, its sector and its strategy;
- facilitation and debriefing — the facilitators’ work before, during and after the simulation;
- technology and logistics — licences, equipment (VR, for example), venue and travel;
- measuring results — surveys, observation of behaviour and analysis of indicators after the programme.
When a programme runs for several cohorts, the scenario is built once and its cost is spread across every run.
Is It Worth It? How to Work It Out
Maloney and Haines (pubmed.ncbi.nlm.nih.gov) frame economic evaluation of simulation-based education around three questions: what you get, what you have to give up to get it, and how that compares with the next best alternative. In practice:
- Define the behaviour you want to change before you commission anything — for example, how managers make decisions in a crisis or handle difficult conversations.
- Choose a measure for each Kirkpatrick level — reactions and knowledge straight after the sessions, behaviour a few weeks into the job, results in the organisation’s own data.
- Take a baseline before the programme so you have something to compare against.
- Set the full cost against the effect and against the cost of the alternative, such as a workshop without a simulation. If the effect on results is hard to put a value on, say so plainly rather than inventing figures nobody has measured.
Who Is Responsible for What
- A board-level sponsor sets the programme’s business goal and signs off the budget.
- The HR business partner or L&D team runs the needs analysis and plans the measurement.
- The facilitator runs the simulation and the debrief.
- Each participant’s line manager creates opportunities to use the new skills on the job.
- The financial controller helps calculate the full cost and compare it with the alternative.
Read Also
- Measuring Training Effectiveness: the Kirkpatrick Model in Practice — measuring results
- Training as an Employee Retention Tool: What It Really Costs — costing training
- ESG in Business Simulations: Learning by Doing — simulations in practice
Build Your Skills
Two programmes take the topic further: War Games for Management — VR Crisis Simulations and Business Simulation: Crisis Management and Teamwork in Practice. The first is designed for senior executive teams; the second trains decision-making under pressure, communication and team leadership. Get in touch and we will tailor the scenario to your organisation.
Frequently Asked Questions (FAQ)
What are business simulations?
They are exercises in which participants run a company, a project or a team in a realistic scenario and see the consequences of their decisions without putting the real organisation at risk. A debrief follows, in which participants connect what happened in the game with situations they face at work.
How do you develop leadership competencies?
By combining several methods: knowledge, hands-on practice and feedback, spread out over time. Those programme features were linked to stronger results in the meta-analysis by Lacerenza and colleagues (pubmed.ncbi.nlm.nih.gov). A simulation is one form of practice. It is also worth planning what happens after the programme, such as follow-up conversations with each participant’s manager about how they are applying the new skills.
How does a development centre differ from a training simulation?
A development centre uses simulation exercises mainly for diagnosis: observers assess each participant’s competencies and identify areas for growth. A training simulation is there for learning, so what matters most is reflection in the debrief, not assessment. The two can work together: the diagnosis sets the goal and the simulation provides the practice.
How much does training cost, and how do you tell whether it pays off?
The cost depends on its components: participants’ time, programme design, delivery, technology and measuring results. To judge whether it pays off, compare the full cost with the measured effect at each level of the Kirkpatrick model and with the cost of an alternative form of development.