July was another extremely busy month in the world of virtual business simulation capability development. Our team had the opportunity to work with hundreds of leaders from around the world delivering customized, virtual learning experiences developing leadership capabilities in the area of Business Acumen.
As our technology and reporting capabilities have advanced, and as we have become more focused on the data analytics that Business Acumen skill development engagements can produce, it is my pleasure to share some interesting trends that can be used to understand and explain some of the behaviors you may be seeing in your organization, within your peers, or within your direct reports.
Here are three unique trends that we have observed and assessed coming out of our post-simulation data analytics:
Increased Analysis Paralysis
This is an increasing trend and one we have never seen so prevalent. We have seen a significant increase in the amount of “analysis paralysis” which we define as spending too much time with and getting caught up in the details of information without actually taking action. We have seen a growing trend of participants going through simulation experiences not being able to finish because they have managed their time poorly and have spent so much time analyzing the data, they failed to make the necessary decisions needed to execute the strategy of their simulated companies and didn’t finish on time. Before the pandemic we only saw teams fail to finish on time less than 3% of the time. Now it is about 10% of the time. When a team spends too much time in analysis and doesn’t make the important decisions to execute their strategy, their decisions simply revert back to the previous year decisions basically like real life. Making decisions based on the slow inertia of last year’s decisions is not a good idea.
More Short-Term Thinking than Long-Term
Short- verses long-term thinking is another increasing trend that is not going in a positive direction. In this trend, the data is showing much more of an emphasis on investing in short-term tactics than long-term assets. Instead of investing in things like larger plants and more capacity, participants are surging customer service, personal sales, digital distribution, and digital marketing. All things that may have a short-term impact at the expense of long-term growth.
People vs. R&D
This is an interesting and, in my opinion, and unlikely trend. Since the begging of using simulations to develop Business Acumen capabilities, it has been almost a given that most participants over a three-year simulation workshop invest in increased R&D and decreased investments in people. Since the pandemic, that has changed. There has been a shift away from big and bold investments in R&D – even for company’s executing a Product Leadership strategy - and a shift towards building teams of people to sell more and service customers more. In the last several weeks, R&D investments are down more than 20% across several hundred participants and close to a thousand years of simulation.
Based on these observations from the data, the question becomes, what to make of this analysis and what can organizations do about it?
My answer is that in times of uncertainty, organizations without strong Business Acumen are going to be less aggressive, hide behind data and analysis to stay “busy”, and keep people on the payroll at the expense of future growth in the business.
Leaders who are seeing similar trends need to address them as soon as they can. Not addressing them, especially in a time of tremendous disruption, could set your company back decades or even worse, could put it on the path to non-existence. The best way to address them is to develop organizational capabilities in the areas of:
- Strategic Thinking
- Goal Setting
- Financial Management
- Human Capital Management