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5 Effects of Business Simulations on Leadership Development


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In recent years, business simulations have become one of the most popular training tools for companies in various industries. But what exactly do business simulations help accomplish? This is a question we at IndustryMasters are asked frequently and one for which we have many answers. From teaching employees industry-specific business concepts to improving teamwork skills, business simulations are incredibly effective. Leadership development, though, is one of the most advantageous benefits of business simulations. Here are the top 5 ways business simulations improve leadership skills:

  1. They are stimulating and engaging

Let’s be honest – no one enjoys sitting through PowerPoint-driven lectures. Still, many employers attempt to foster leadership development by hiring guest speakers or giving a lecture themselves. Not only is this method outdated, it’s ineffective. Over 65% of the population are visual learners which means an audio presentation won’t engage them. Business simulations, on the other hand, are proven to help learners retain more information because they are stimulating and relatable. Business simulations allow employees to perform tasks that help develop leadership skills and make decisions in a safe environment, offering them an entirely different perspective and immediate feedback.

  1. They improve decision-making capability

Within a business simulation, participants do, rather than simply read or listen. Learners take on manager or even C-Level roles within a simulated environment and perform a series of tasks throughout the experience that require them to wrestle with tough, real-life decisions. They must contend with unexpected challenges and determine how to handle them properly. Because business simulations are more realistic than they are theoretical, employees are able to improve their decision-making abilities. They are actually making decisions and witnessing their impact, not just talking about them.

  1. They build teamwork skills

Participants generally work through business simulations in teams. Unlike typical work days in which they may complete tasks in isolation, simulations promote collaboration and an immediate awareness of how a decision from one team or department impacts another. Increased communications and collaboration are paramount for successful simulation teams to work effectively and without incident – just as in real life.

  1. They expose how businesses are run

In the real world, most employees are exposed only to their job and the responsibilities they are tasked with completing. Within a business simulation, however, they have the opportunity to witness how a business is truly run. By assuming the role of a manager or CEO, they participate in the day-to-day operations that they aren’t otherwise exposed to. While they make decisions during these simulations that help them grow as leaders, the overall simulation shows participants what is needed from them in a leadership role – from handling disputes to managing other employees, decisions that go beyond business operations. This, in turn, tests their character by requiring them to respond patiently, professionally, and strategically. A business simulation also incorporates assessment opportunities because performance is reviewed throughout the simulation and particularly once it concludes. To develop leadership skills, employees must become familiar with tests of character and frequent assessments.

  1. They offer employees “real” practice

There is a huge difference between studying to be a leader and actually being a leader. No amount of studying is comparable to hands-on experience. While it may not be wise to throw an inexperienced employee into a leadership role with hefty responsibilities, they can gain “real-life” practice through a business simulation. Obviously, it isn’t real-life experience, but it is the next best thing. Business simulations are designed to be as close to reality as possible, helping participants gain valuable and applicable experience.


At IndustryMasters, we are passionate about using business simulations for leadership development. We use advanced technology to create scalable, web-based business simulations. We develop simulations to teach employees how to become leaders. We can create generic or custom business simulations that teach leadership development through exposure to business acumen, diversity and inclusion, supply chain management, and more. If you would like to join the community of corporations from around the globe working with us to train their employees, please contact us.

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