One Friday afternoon in May, managers from some of the world’s biggest companies signed on to an unusual video call. Within minutes they were transported back in time to the Atlanta Olympics of July 1996. After a week without a hitch, the games had been thrown into chaos by a fatal pipe bomb attack. Should they continue?
This was the question posed to executives by Edouard Getaz, a film producer turned leadership trainer.
During a simulation lasting several hours, the participants heard audio recordings and watched video footage of decision-makers at the time – from the FBI to the International Olympic Committee – to figure out the right course of action at key points during the crisis. Participants broke away to engage with each other, test their ideas and receive feedback.
Getaz’s company, InsideRisk, offers such “immersive” leadership training sessions to executives from companies, including Airbus, Richemont and HSBC. They are designed to trigger real-life emotional responses to crises that could hit any business.
As corporate leaders have dealt with an onslaught of challenges – from the pandemic and economic shocks to geopolitical upheaval and supply chain disruption – these practical, immersive training techniques have become more popular. Companies are aware that reputation management and the ability to navigate crises effectively are crucial given regulatory scrutiny, high standards for corporate behaviour and transparency and how quickly negative publicity will spread through social media.
“Crisis management and leadership training are converging,” says Getaz. Experiential learning, anchored in neuroscience and behavioural economics, has become essential in today’s business environment, where traditional methods of teaching and training “doesn’t work”, he adds.
The goal of such real-world training is to unlock “cognitive breakthroughs”, he explains. He hopes to end the era of coaching through PowerPoint presentations that emphasise academic theories and business principles rather than real scenarios.
The thinking is that realistic, high-pressure situations help executives to develop practical strategies for problem solving and make them better decision-makers in times of stress. Participants learn in an active way that providers say leads to better retention of knowledge. Immediate feedback helps executives learn more quickly and adjust their approach accordingly. Training in simulated environments, through role-playing and virtual reality, is also just more fun.
“It’s about understanding that top talent and high potentials need the ability to face any type of situation. This is a big shift in mindset in how to go about preparing your top executives,” says Getaz. “I wanted people to acquire experience from other people who had to face high-stakes situations.”
New ways of learning are evolving just as the traditional MBA – or Master of Business Administration course – has come under fire.
MBAs have long been regarded as comprehensive programmes tackling core aspects of business, including finance, marketing, accounting, strategy and organisational behaviour. They offer good networking and internship opportunities that often lead to jobs. But the rapid pace of technological innovation and the extent to which traditional business models are being disrupted is making some MBA curriculums outdated even before students join the workforce, business executives say. In addition, admissions processes are elaborate, courses are costly and programmes lengthy.
Practical experience that is directly relevant to a particular job can be regarded by employers as more valuable than theoretical knowledge. As a result, online courses, more specialised certifications and immersive training opportunities have become popular as they can provide more targeted and flexible education at a cheaper cost, often borne by employers.
These alternatives can be particularly useful for executives who are further on in their careers and are having to make high-stakes decisions. Companies can ensure courses are tailored to their specific needs and drill down into the skills required for different leadership levels.
“When we learn by doing, we’re discovering the insights that come from action,” says David Novak, former chief executive and chairman of Yum Brands, in his new book How Leaders Learn.
“What classroom learning doesn’t always deliver is self-awareness about what gets in the way of our own growth and openness to ideas and experiences, and that’s the greatest hurdle any of us face, especially when we’re confronted by so much change,” he tells the Financial Times.
Bret Hood, a retired FBI special agent and expert in financial crime, who is now a leadership consultant, was among the participants of the InsideRisk workshop. “The best thing about experiential learning is that the immersion often leads you to [make] decisions that you wouldn’t expect to make,” he says. “I was forced to perceive my objectivity and ethicality in a completely different way.
“Whereas I thought that I would never go against the law or always make the right decision, these immersions taught me that situations, pressures, and even things as simple as likeability can change my decision making processes in both conscious and unconscious ways.”
He also highlights downsides. “Coming to terms with the idealistic self and the actual self can be traumatising for some people. These events can remove the protective mental images we have of ourselves, which can be very disturbing,” he adds.
Academics at the University of Sydney Business School and Cambridge’s Judge Business School point out that it is often a chain of events – rather than the type of single incident covered in a “war game” training scenario – that causes the most significant reputational damage. They cite Boeing, which has faced a series of production and safety setbacks since the crashes of its 737 Max planes.
Some companies have brought some experiential training in-house. In UK financial services, the Bank of England requires boards to run regular “fire drill” exercises.
“A well-run company will be regularly testing their own incident management process – running simulated crises such as systems outages, data loss and cyber attacks,” says Joe Garner, the former head of HSBC’s UK retail division and of Openreach, BT’s infrastructure arm, who is now an executive coach. “The best simulations are very lifelike and include aspects such as mock media interviews for the CEO. In my experience, it can feel very real and I learned many things from these drills.”
He says that the simulations work best when they are observed by experienced experts who can provide feedback on how the team performed under pressure.
“Nothing can fully prepare an executive for the kind of high-pressure decisions that you sometimes have to make at 2am in the middle of a crisis,” he warns. “However, like all abilities, crisis management improves with practice.”
He says the best outcomes arise when the training and simulations can be put into effect in real life situations, and notes that there has been no shortage of opportunities for this. “The financial crisis of 2008, Covid and Brexit provided plenty of real life experience for this generation of CEOs.” – Copyright The Financial Times Limited 2024
- Sign up for Business push alerts and have the best news, analysis and comment delivered directly to your phone
- Find The Irish Times on WhatsApp and stay up to date
- Our Inside Business podcast is published weekly – Find the latest episode here
