AUGUST 2007

Leadership Simulation Challenges Students in Trial By Fire

By Meredith Alexander Kunz

Two first-year MBA students have come to talk business in a simulated management meeting, but in just a few minutes, they’re at the center of an all-out fight. Playing the roles of a CEO and a president newly installed by venture capitalists at a growing tech company, the students are confronted with a team of executive VPs in revolt. The new leaders need buy-in for their goals and budget, but instead, they’re being attacked or ignored by their management team—Business School alumni and faculty acting the VP parts.

Across the table from the student-leaders, the VP of engineering stares them down, demanding to know why the company’s founding CEO suddenly got fired. At the other end of the table, the CFO is on his cell phone talking golf with an I-banking buddy. Shouting over the engineering and finance execs, the angry VP of sales and marketing—a tall, imposing guy with a booming voice—insists on raises for his staff. He then trashes the performance of the distracted CFO, who interrupts his phone call to accuse his critic of being “fluffy.”

Students are used to pressure, but this situational leadership exercise is a trial by fire. Will they get flustered and throw up their hands—or get angry and start issuing commands? Can they lead their way out of this mess?

While it may sound like a scene from a reality TV show, this is a snippet from the GSB’s first-ever “executive challenge,” one of the learning opportunities offered to MBA students through the School’s Center for Leadership Development and Research. Held over a full day in March, the simulation brought 43 alumni, as well as faculty and staff to role-play and judge student performance in multiple sessions of three leadership cases. At day’s end, the judges offered public honors and feedback to the teams of six that responded with cool under fire.

About a third of the first-year MBA class, or 120 students, participated after completing the two-quarter course formerly known as the Leadership Development Platform, now renamed Strategic Leadership. Next fall, all first-year students will enroll in Strategic Leadership as part of the School’s new MBA curriculum, which emphasizes hands-on learning and leadership training. The course will include lecture instruction in strategy and conceptual leadership in addition to the experiential, role-playing exercises and realistic work simulations of the “leadership laboratories,” which are funded and staffed by the School’s Leadership Center. This year, the executive challenge served as the final exam and capstone experience for students who took the leadership course, and School leaders plan to offer an executive-challenge-style simulation to as many students as possible next year.

Pilot Finds Success

Originally launched by Evelyn Williams at the University of Chicago’s business school seven years ago, the simulation came to Stanford this year with Williams, who is a lecturer in management and director of the “leadership laboratories” portion of the Strategic Leadership course. No other schools offer similar simulation programs, she said. “The pilot was a huge success, and we’ll be doing it again next year—hopefully expanding the executive challenge so that more students can participate.”

The Stanford Business School’s relatively small size makes it a good candidate for this type of program, says private equity investor and GSB lecturer Joel Peterson, who participated as a faculty judge. A Harvard Business School graduate, he pointed out that a large school such as his alma mater would have a tough time with the challenge logistically. “Stanford is unique in being small enough to be able to pull off these sorts of events.”

How did Williams recruit alums to participate? She believes the executive challenge is an ideal forum for experienced business executives, whom she calls “master craftsmen,” to pass along what they know to the next generation. “It’s a nice way for busy senior managers—alums who can’t give up a quarter’s time to teach in the classroom—to bring maximum impact, and to create an amazing learning experience for these students,” Williams said.

The idea of mock sessions like these already holds a prominent place in at least one other professional school. Law students have a grand tradition of pursuing simulated cases: In moot court competitions, for example, students argue legal cases before courts made up of practicing lawyers. It makes sense for business schools to offer something along the same lines.

What is more, Williams cites research on adult learning that shows that people learn best by experience. But, she said, the key is that the role-playing cannot be done in a vacuum.

“It’s not just the simulation itself that makes it useful, it’s the reflection, measurement, and feedback that’s part of the experiential learning process that makes it really work,” she said. The feedback is structured: Coaches give advice to students as they prepare beforehand and debrief them afterward, and alumni judges give their reactions directly after the role-playing session.

Alumni Role Players

Students received case materials the morning of the exercise and had limited time to prepare. Since the challenge was also a final exam, students arrived with queasy stomachs. Kristen Gasior, a first-year MBA candidate, said she calmed her nerves before the exercise by remembering her high-school basketball days: “Once you get playing, it’s fine. Once I started, I got into the groove.”

The afternoon of the executive challenge, a team of students appeared for the goal-setting meeting wearing suits and ready for action. The two students playing the CEO and the president introduced themselves to the alumni VPs and then launched a preemptive strike, asking for the whole management team’s input early on. They listened well and acknowledged the tension in the room. At one point, after an outbreak of complaints from the VPs, the student-president remarked with a small smile, “Is everyone feeling OK here?”—which prompted nervous laughter. After some tough wrangling among the VPs, the student-CEO told the group, “If you start pointing fingers, it’s going to be destructive.”

But the student team had trouble clamping down on cell phone calls, demands for job security, and budget assurances. The VPs wouldn’t agree to hard-and-fast changes.

“You figured out the human issues,” Joel Friedman, MBA ’71, who played the CFO, said afterward. “You used humor. But you didn’t close the deal and get buy-in on your budget.”

“Don’t give control away,” advised the VP of sales and marketing, played by Leo Joseph, MBA ’96. “If you ask for agenda items, you open it too much.”

The key to the exercise was “the tradeoff between listening to what people had to say and not losing control of the agenda,” said judge Michael Colby Orsak, MBA ’90.

But much more was at stake during these sets of simulations: It was a chance for the students to move beyond the formalized world of the task that is so prevalent in business training and into the world of people, as School Dean Robert Joss explained to student participants. To lead, you must incorporate both into your thinking: “It’s something you learn by practice,” he said, adding that the exercise allowed students to do so “in a safe space.”

Role-play: ‘Intimidating, But Also Helpful’

The chance to gain insight from the seasoned leaders was not lost on students. Student Uri Pomerantz recalls looking at the role-players’ “stoic faces,” which he found “very intimidating—but also helpful. If they were very friendly, it wouldn’t have been nearly as effective. You learn a lot through being challenged.”

One piece of advice that will stay with Pomerantz: “Alumni said, ‘You need to bring us in more, to recap the main discussion points or restate what was agreed upon.’” He added: “I wish I could have applied these things to jobs I’ve had in the past.”

Gasior, too, was impressed by the alums’ performance. “I’m sure it was very real-life. They weren’t following a script—it was very dynamic.” The executive challenge surpassed the role-playing workshops that were held during her two-quarter leadership course, she said, because alumni role-players “didn’t just accept a simple explanation” and move on—they continued to challenge the students in new ways.

Indeed, alums went above and beyond the case materials in interpreting their roles. Gasior, who played a tech company president, was shocked at first when an alumnus whipped out his BlackBerry during the meeting; then another started perusing the newspaper. She quickly decided to clamp down on the BlackBerry-browser. “I called him on it. I thought, this is pretty unproductive, so I asked him if he could do that after the meeting.”

Her team finally got the management team’s attention and went on to gain a commitment from them to write a new business plan. Her group won second place in the competition.

Learning Experience For Alumni

Alums who participated were quick to point out that they gained from the challenge as well, not least because it helped them recall their own leadership training.

“I was reminded of a time very early in my career when I blew many of these meetings,” said Joseph, who is chief operating officer at P.A. Semi, a fab-less microprocessor startup in Santa Clara, Calif. “I was young, and I said, ‘Look, here’s what we’re going to do,’ and [more senior] people said, ‘You don’t know what you’re talking about,’ and in most cases, I did not—I was going by a model.” Joseph tried to pass along the painful lessons of his “type-A leadership” days to students, even if some other judges considered his advice harsh.

“This is as much of a learning experience for me—I see them making mistakes that I have made,” said Karen Cassel, MBA ’96, general manager of the performance marketing division of Exponential, an ad network company in Emeryville, Calif. She said she believes training like this can help “shape leaders to be more effective.”

Some busy managers and investors who took time off to test out their acting—and arguing—skills walked away with more than they’d bargained for. Orsak, a venture capitalist who has been in similar meeting situations many times, felt the role-play taught him added “empathy” for the executives he deals with. “I have a deeper understanding of how their personal views shape their behavior, which could allow me to be a more effective leader of a meeting. I can address their issues, rather than ignore them because I’m not aware of them,” said the cofounder of Worldview Technology Partners in Palo Alto.

Several alumni judges said they wished they had had a similar learning experience in Business School. (Some recalled that the closest they’d come was the elective course Interpersonal Dynamics, known as “Touchy Feely,” which was launched in 1971 to help students gain insight into how people relate to each other.)

“If you look at what correlates with senior executive and CEO success, it is emotional intelligence, not IQ,” said Michael Johnson, MBA ’90, a private investor who founded and ran a public company for 10 years. “This is by far the most productive investment of time students could make.”

As the School’s new first-year MBA curriculum is ushered in this fall, the inclusion of the executive challenge will add a kind of experience very different from the average lecture course or even the typical case exploration. It’s a level of hands-on learning that many business students crave and that Stanford alums are keen to offer.

FEATURES IN THIS ISSUE