There will be mixed opinions over this and there will be no right or wrong answer.

First the generic information to attempt this or not :
The advantage of doing it is you get more space to make your claim;

The disadvantage is that the criterion of relevance and interest is far higher. If you ask them for more time, and you waste that, you're in trouble.

Make it crystal clear what the relevance of the extra information is and how it relates to
the rest of your candidacy.

Now answering the specifics, definitely go for this essay if its factual and mentions a thing which will be different from at least 50 applicants(according to you).

Keep up to the word limit and revise to make it smaller.

Best of Luck

Thanks Jon and througmba for the replies!!

The fact that I was leading a group of 100 members is something is my major selling point and I am writing about this in all the applications.

What I am confused about is that whether I should be doing this in the optional essay (which will give me dedicated 250 words) to write about it
OR
Should I weave it in the Sloan cover letter. My research between yesterday and today is tilting me towards the cover letter as this is the place in which I have to sell myself and my most important accomplishment (of leading 100 people and one specific impact I had) has to come here.

For the optional essay, will it be ok to talk about a "Conflict resolution" scenario I managed and how I increased collaboration (major focus area for Sloan) among the 100 member team, which was actually going into a mode of competition instead of collaboration when I had joined. And how I brought about a change in the organization and increased the health scores of the group. Will this anecdote be Ok to talk about in the optional essay?

Thanks a lot guys for your support!! Truly appreciate it.

For the optional essay, will it be ok to talk about a "Conflict resolution" scenario I managed and how I increased collaboration (major focus area for Sloan) among the 100 member team, which was actually going into a mode of competition instead of collaboration when I had joined. And how I brought about a change in the organization and increased the health scores of the group. Will this anecdote be Ok to talk about in the optional essay?

Go for it, it seems very factual. Describe how you did it, that should be the meat.

Close with some questions, as if you wanted to explore more.