Imagine going to the emergency room and finding out you need your appendix removed. There are only two surgeons available. All you know about the first is that she has played the game Operation thousands of times. All you know about the second is that she spent more than 200 hours practicing in a surgical skills lab. Who do you choose?
The obvious choice is the second doctor. While Operation does require a steady hand (especially removing the funny bone), it’s no substitute for practicing actual surgical skills. The human body is dynamic and even a single wrong decision can be deadly. Doctors need to understand the consequences of their decisions before they work with live patients.
Like bodies, businesses are dynamic. And, although implementing a poor strategy, communicating ineffectively or making a bad decision won’t have life and death consequences, the impact can be quite significant. After all, what’s the cost of losing a high-potential employee because they don’t feel valued? What happens when ten senior leaders leave for the same reason? How is a company affected when a sales & marketing strategy is pursued aggressively at the expense of R&D? How will a leader react when a venture upstart enters their niche market?
In 2012, McKinsey estimated that poor managers cost companies $355 billion annually in lost productivity. So, we have to ask ourselves: If the stakes are so high, why aren’t there more “labs” for managers and leaders to develop and refine their skills?
Dynamic business simulations create these much-needed “business laboratories.” Here, managers and leaders can learn, experiment and make mistakes -- all in a consequence-free environment. However, like a surgical lab, business labs must go beyond basic skill building to replicate the dynamics of the actual environment. That means integrating strategy, financial acumen and leadership in a way that’s relevant. With the proper context, leaders can see how their decisions create ripples in their organizations, and adjust accordingly.
Elite performers in all professions know the importance of learning from mistakes. By giving leaders the opportunity and context to learn and practice, today’s companies can rapidly and dramatically improve organizational performance.
Jamie Hayman is Vice President of Business Development at Insight Experience, a Boston-based firm delivering contextually rich, immersive business simulations and learning experiences to accelerate and integrate leadership, business acumen and strategy execution.