The concept of a simulation culture, which has long been harnessed by the tech industry, is now rapidly making its way into the mainstream business landscape. As aptly put by Jensen Huang, CEO of NVIDIA, “Simulations let us find problems at the least costly phase of a project and ultimately get to market sooner with a high-quality product. But it is much more profound than that. A simulation culture naturally forces concurrent hardware-software codesign and naturally aligns internal teams. A simulation culture has profound implications throughout every aspect of product development that is integrated. Failures and results are reproducible and continuously improving, with all past learnings captured in the tools and flow.”
Simulation culture is an integral part of how high-performing teams find success. It is a philosophy of work built on the idea that playing out scenarios, institutionalizing preparation practices, and role-playing future moves drive better decisions, more profitable projects, higher win rates, closer client relationships, and bottom-line growth. It is the best method for groups of people to safely learn from experience, make errors, learn lessons, and, perhaps most importantly, remember those lessons in a deeper way so that they perform at the highest levels together.
Simulation culture has reached a critical point in its evolution because of the confluence of a few factors. One is the explosive growth of artificial intelligence (AI) combined with high-performance computing abilities. AI can now make simulation-based practices more immersive, more data-enhanced, and therefore more powerful. The second is macroeconomics forcing more frequent and rapidly evolving business cycles that demand business model adaptability.
These two factors, in turn, require that people learn to work in different ways with more accountability. And they need an efficient way to do that at scale. That’s why companies that embrace simulation culture will be able to get where they need to go faster and smarter.
SIMULATION CULTURE ENABLES FAST PIVOTS AND GROWTH
We have worked with Salesforce, a BTS client, to implement a simulation culture in the fast-growing company. According to Salesforce’s EVP of Global Enablement Jody Kohner, “Salesforce is a rapidly evolving, high-growth company. Our go-to-market strategy is always evolving. So, it’s critical that we are bringing our employees, in particular our customer-facing employees, along for the ride in a very meaningful and impactful way.”
A simulated experience answers that need. Through simulations, Salesforce teammates get to experience different perspectives on the various moving parts of the business. People from other departments get to try new things, test out creative ideas, and fine-tune potential decisions by accessing real-time data and adjusting their approaches in a safe environment.
There are four major ways Salesforce uses simulations:
- Connect with customers: “We want our salespeople to be able to speak the language of the customer in any industry, but we don’t want them to use trial and error to get there,” Kohner says. “Simulations give salespeople the chance to learn what matters to clients so they can show up, be relevant, help the customer solve real problems, and take advantage of new opportunities.”
- Kick off a sales year: Salesforce loves to start a new fiscal year with a special event in which it puts 40,000 people through a simulation of its latest go-to-market strategy. Learners get to try out what elements are new and different from last year and start thinking differently.
- Prepare leaders: As Kohner explains: “Through simulations, senior leaders are able to practice taking on C-suite roles and evolving the company. Not only do they get an opportunity to walk in a customer’s shoes, but they also get real experience on how to support and coach their teams in these types of situations with customers.”
- Provide real-time wisdom sharing: “As we have wins and losses, we use micro-simulations to embed the lessons learned at scale in the organization,” Kohner says.
These simulations are about learning, but they’re also about motivation. Organizationally, Salesforce has found that implementing a simulation culture has led to greater alignment. With over 70,000 team members, group simulations allow co-workers to practice cross-functional teaming, prepare for inevitable moments of tension on a big initiative, and inspire each other to act in the Salesforce way.
“One of the most surprising outcomes of our simulation culture has been the sense of community it has built,” Kohner says. “People have made deep and meaningful connections.”
Think of simulations as ways of connecting. In our post-pandemic workplaces, we witness each other’s hunger for connection. People want to reach out and talk to others and find moments of fun and shared interests, but in a remote, global setting, it’s hard. Simulations can bring teams, leaders, and entire organizations together for a shared, active purpose. They can provide apprenticeship at scale and speed across the enterprise. The more people experience breakthrough performance together, try new things, create trust and support, and raise the bar, the closer the team, the stronger the culture, and the higher the shareholder returns.
How can you use a simulation culture to improve employee performance and give your business a competitive edge?
DO, DON’T TELL
Simulation cultures give leaders the power of visual modeling of strategy scenarios, operating models, and process redesigns to get hands-on with challenges and opportunities. Having their teams use modeling methodology gives people the authorship and ability to “do.”
One of the biggest challenges for leaders is overcoming all-or-nothing thinking, where it is tough to test assumptions in their organizations. Many companies have an old-fashioned culture of perfection in which failure is never an option. They sustain an old leadership model based on command and control, telling people what to do rather than having people use their own initiative to solve problems. Simulations help leaders get rid of old models of leading and start interacting with everyone around them for the sake of better, more collaborative decisions.
Take, for example, a company that was fine-tuning its strategy. Rather than just the CEO and head of strategy doing most of the thinking, they pulled in the entire executive team to start simulating various growth, cost, and capital-deployed scenarios. This experience of strategy creation connected all members of the C-suite through participation, authorship, and ownership. The deeper level of connection better prepared them to lead execution successfully.
INSTITUTIONALIZE THE BEST AT SCALE
Through simulation, you can turn consequences into learning experiences for the enterprise. According to the “learning pyramid” attributed to the National Training Laboratories Institute, people tend to retain and understand information better when they actively engage with it through real-life experiences. This retention rate is estimated to be around 75%, compared to passive methods like reading or listening.
The simulation allows you to go beyond after-action reviews and one-off learning to spread insight and expertise at scale. What if you could figure out what it is that makes your top 10% of performers great and then give access to that expertise—through simulations—to everyone else in the company?
On the flip side, what if you were able to rapidly respond to costly errors or learn big from smaller-scale mistakes? Say a company loses out on a deal. To make sure that it doesn’t happen again for the same reasons, it could implement a micro-simulation of the deal for all sales leaders to practice with their teams. Through the simulation, all the sales teams can partake in the deal by experiencing responses and their impacts. This simulation will help the company institutionalize wisdom immediately and avoid the same mistake in the future.
USE SIMULATIONS TO MAKE STRATEGY REAL
Simulations provide a powerful path to ensure that leaders and teams get better at decision-making and collaboration. The only way to execute on the strategy is through making decisions better, faster, and at scale; teaming more effectively; and adapting more quickly to new ways of working. A simulation culture leads you to embed these capabilities into the ways in which you define, plan, and execute the strategy as a matter of practice and habit.
Take, for instance, a tech company that aimed to make big moves quickly and accelerate growth. It wanted to make the right moves and uncover new opportunities to help drive the necessary change. In one year, the company deployed more than 40 active simulations throughout the business. These simulations encompassed functional workflows, strategy modeling, financial modeling, leadership moments, the unique company culture, and critical roles in the company.
Leaders and others in the organization were able to work with the data to see what happened when different levers were pulled. They were able to test assumptions by practicing their specific roles and how they might respond during important leadership moments. By creating these opportunities to learn from simulations, the tech company gained insight into future situations and the understanding to be able to drive impactful decisions.
Life really is the best teacher, as Kohner agrees. Through simulations, learning becomes natural, internalized, and shared automatically.
Jessica Skon is global CEO of BTS Group, a global consultancy specializing in the people side of strategy. BTS provides leadership development using custom business simulations for strategy alignment, business acumen, and leadership development.