Our aim is to explore to what extent, and in what ways, can theatre be used in the learning process when the focus is on deepening the leadership skills of managers. This paper focuses on the concept of arts-based initiatives (ABI) as knowledge co-creation in a group of practitioners. The unit of analysis is a theatrical performance exercise (TPE) at a Marines’ Military Academy. Through observational and interview data gathered at this Academy, a case study approach is used to explore the experiences of participants in a performance exercise, where the task is to plan, organize and execute the play as a group. This includes, scripts, characters, role-plays, costumes, stage decoration, sound, promotion and performance of the theatre play. We situate theatre as knowledge co-creation within ABIs framework, review related literature and then analyse the experiences of military students throughout the process of creating and performing the theatre play. Finally, we present key findings about the kinds of value that the military students identified in the theatrical experience. In the end, we conclude as to how theatre can be used in the learning process, when the focus is placed on deepening leadership skills of managers, and identify the benefits that can emerge from it. There is a growing cry for ways of approaching management and leadership development that embrace the perplexed environments of contemporary organisational contexts. One response has been the use of arts-based initiatives (ABIs) for management and leadership education. Schiuma’s (2011) study suggests arts-based working has effects both on people and on organizational infrastructure with varying effects and intensities. In this study we are interested in exploring what possible benefits could emerge from ABI. Namely, understanding theatre in military training as a value driver to develop leadership skills and to organizing reflection via arts-based approaches (Pässilä & Vince, 2015) and critical creativity concerned with understanding (Adams and Owens, 2015), This paper speaks to knowledge management researchers, professionals, and development practitioners, the study overviews the growing trend of ABIs and its possible benefits, highlighting reflection on and of emotions, thoughts and challenges.