Business simulation - practicing the management of complex situations
Managers are increasingly faced with the challenge of mastering complex situations. The skills required for this can be taught to junior managers using business simulations. A project report.
Companies need to give their future managers the skills they need,
- to recognize changes in the company and its environment at an early stage and
- to lead the areas entrusted to them to success.
Companies often struggle with one problem: in seminars, they can only sensitize their junior managers to the complexity of this task to a limited extent. As a result, young managers often lack the behavioral confidence they need in everyday management.
In the fall of 2021, a global technology company therefore decided to carry out a business simulation as part of its leadership development , in which the participants
- experience the complexity of the environment in which leadership takes place "live", so to speak,
- try out different problem-solving and management strategies and
- identify alternative approaches so that they ultimately have a larger repertoire of actions and their behavioral confidence increases.
In addition, through their trial actions in the business simulation, the junior managers should develop a feeling for where they still need to develop.
The simulation reflects reality
Prior to the management development measure, an existing business simulation program was modified with MTI support so that it reflected the company and its market. The aim was for participants to work with real company and market data during the training.
The central challenge was defined as follows: The company is under great pressure to innovate because its market is changing rapidly and technological progress is constantly enabling new solutions to problems. As a result, the company's strategies have an ever shorter shelf life. All areas of the company must therefore regularly rethink their strategies and processes. This results in the following challenges for managers:
- They must recognize the need for change at an early stage.
- In addition to their employees, they often also have to win over the areas with which they cooperate and their superiors as fellow campaigners to set a new course. And:
- Managers must coordinate their actions and act as a team.
Learning to manage complexity
Once the preparations were complete, a three-day workshop divided into five phases took place at the end of 2021. In it, the participants first reflected on the success factors of leadership in a time characterized by rapid change and the resulting demands on managers. They then received their role descriptions for the business simulation.
Care was taken to ensure that the young managers were not deployed in their specialist discipline in order to avoid them relying primarily on their specialist knowledge to overcome the challenges in the simulation. This was not intended to deepen their technical expertise, but rather to teach them how to remain capable of acting as managers and teams in a complex environment characterized by numerous interdependencies and changes.
Sometimes actors, sometimes observers
In the first phase of the simulation, the setting was: the company is running smoothly and its business is stable. However, the first weak signs indicate that the framework conditions will change in the foreseeable future. The key questions in this phase were:
- How do I behave in such a situation?
- How do I recognize changes, potential opportunities and risks at an early stage?
This was followed by a plenary discussion with two MTI consultants who moderated the workshop,
- which instruments are available for recognizing changes and
- how to assess their relevance for the company and respond appropriately.
Increasing pressure to act
The setting in the next phase was: the company's business is still stable, but the signs of fundamental change are increasing. The managers now had to derive concrete information from the environmental signals and determine whether certain courses needed to be reset.
In the third phase, the pressure to act increased further - for example, because important key figures showed negative signs - so that in the fourth phase the simulation was obvious to all participants:
- If we had not taken initial precautionary measures in phase 3, we would have slipped into a crisis" and
- "If we don't develop new strategies now, we won't achieve our long-term goals. "
Securing and building on what has been achieved
In the fifth and final simulation phase, the aim was to check whether the change measures taken had the desired effect and, if so, to ensure that the redesigned processes and structures had the necessary stability.
The practical business simulation enabled the company to increase the awareness of its junior employees for the complexity of their management tasks. In addition, by trying out various management and cooperation strategies, their ability to act in an environment characterized by change increased.
The technology company benefited directly from this when procurement problems intensified following the outbreak of the war in Ukraine in February 2022. So it decided: From now on, business simulation should be an integral part of our leadership development - worldwide.
Author:
Hans-Peter Machwürth is Managing Director of Machwürth Team International, Visselhövede, a specialist for customized, global personnel development programs.
WE BRING YOUR STRATEGY TO LIFE
Mastering complexity - through practical training. Business simulations create a protected space in which managers can try out complex situations and gain confidence in their actions. This creates skills that have an immediate impact in dynamic day-to-day business. If you are considering how simulations can enrich your leadership development , please contact us - together we will develop approaches that shape the future.
You can find out what this can look like here: Case studies & experience reports