It is not uncommon to see enterprise transformations fail due to a lack of enthusiasm from your employees. But now imagine a strategy inspired by video games, one that uses technologies and techniques designed to motivate enterprise staff through feedback, measured achievements and incentives. It’s called Gamification, and its claim to fame is that Gamification can not only improve workplace engagement and productivity but also increase the success rate of enterprise transformations. Is this just another management fad or are there some winning ideas to this game?
Contributors

• • Michael Hugos, Author, Essentials of Supply Chain Management
  • Mark P. McDonald, Chief Information Officer, City of Vancouver

Transcript

Sanjog Aul [00:00:00]:
Good morning, and welcome to CIO Talk Radio. To learn more about the show, please visit www.ciotalkradio.com and as always, we invite you to join the discussion on Twitter #Ctrlive and look for this show as #gamification. Today’s topic is Can Gamification Improve Enterprise Transformation? And our guests for today’s show are Mark McDonald, who is the Vice President and Head of Research with Gartner Executive Programs and is also a Gartner Fellow. Good morning, Mark. How are you?

Mark McDonald [00:00:30]:
Good morning, Sanjog. It’s good to be here.

Sanjog Aul [00:00:32]:
Good. So, enjoying that chilly weather in Chicago or you’re somewhere else?

Mark McDonald [00:00:37]:
Oh, I’m in Chicago. It’s very cold here.

Sanjog Aul [00:00:39]:
All right, good. So stay warm and fuzzy, and let’s enjoy this conversation. And we also have Mike Hugos, who’s the Managing Principal at SCM Globe, and he’s also an author and a mentor. Good morning, Mike. How are you?

Michael Hugos [00:00:53]:
Hi, Sanjog. Thanks for having me.

Sanjog Aul [00:00:56]:
Great to have you, too. So today, the conversation we have picked up, actually this word gamification had been the latest buzzword. Enterprises want to use it, individuals and marketers want to use it, but we wanted to connect it to enterprise transformation, which is many times the end goal for an organization. So just to get started, Mike, I would like to start with you. Do you have an inventory of the reasons why enterprise transformation fails and how much of that is connected to or attributed to the human component?

Michael Hugos [00:01:32]:
Well, probably most of it is attributed to the human component, because the truth is that we are creatures who fall in love with our habits and change is hard. Even when we want to change, change is hard, let alone when we have a situation where we walk into work and the power is to be having out some big plans for a change.

Sanjog Aul [00:01:58]:
Okay, so, Mark, what have you seen the world doing when it comes to enterprise transformation and you could really say that there is much more to be attributed to the people component than any other reasons.

Mark McDonald [00:02:09]:
Well, I think the interesting thing, Sanjog, is we’re really seeing a fundamental change in the whole notion of enterprise transformation and being brought in part by the topic we’re talking about today, gamification, but perhaps on a more broad basis on the notion that much of these new technologies, the digital, social, mobile, cloud technologies, are really technologies that focus on individuals and behavior as opposed to kind of the central top down, my way or the highway IT technologies we’ve had in the past. So I think that’s changing the nature of change and making it more participatory, more selective, which by default makes it more human. As these technologies enable behavior to become addressable, the individual choices we all make become much more important and just to kind of put a point on that, when I was a young commercial banker, somebody told me once he said, remember, no matter how much PCs or computers are out there, it still takes people to write checks and so, yes, I can install new systems, but it still takes people to change. So it’s never been the human component has never been more important and more addressable than it’s been lately.

Sanjog Aul [00:03:15]:
So when we talk about any tried and proven methods that we have all looked at, tried to adopt, and see the changes happen or not happen, did we exhaust all of those options? And that’s why we are looking up to something new and jazzy, like gamification to bring about the change and solve all our problems. Mike?

Michael Hugos [00:03:36]:
Well, I always cringe a little bit when people say solve all our problems, because of course the human condition is you cannot solve all your problems. Hopefully you can solve some important, pressing problems and I do think that what’s going on now is a convergence of demographic and technology. When you look at the demographic and some of the recent surveys that have been coming out of game industry research, the median age now for a gamer is 36 not 15, not 26, 36. These games have been around for a while. And what the research also shows is that when people start, they typically keep right on going. Sometimes you get married, kids, you take on a job and et cetera

Michael Hugos [00:04:21]:
and so you don’t say that you still secretly slip away and do a little bit of gaming but it typically does show that once a gamer, always a gamer, and now you have technologies that can deliver the kind of interesting, interactive, crazy real time graphics the games have always used. Now you couldn’t technology flipping into mainstream business applications. So there’s a real merger there that has a lot of power to it.

Sanjog Aul [00:04:56]:
Now, Mark, in your world, when you have spoken to people, do you think the people have changed or they have started behaving differently because there is interaction available or easy collaboration and interactive approaches available, and they are looking at those inputs and feedbacks to see whether they want to change or not, or is their fundamental DNA is the same?

Mark McDonald [00:05:20]:
Well, I think at some level everybody’s fundamental DNA is the same and in that regard, I think the qualifications and the characteristics of gaming and game design play very well. Everyone wants to play a part in achieving a common goal and everyone wants to have recognition or a way of Seeing how well their contribution reflects against that goal. Those are essential elements of games and essential elements of Michael’s book on the septic enterprise games, which is a really great read but I think the big thing that has to that executives have to get over is kind of get away from this game notion and start to think about the idea of objectives and feedback mechanisms and measurement and roles and participation as being kind of the next generation of business design because we all, regardless of our age and regardless of whether we’re third level mages in World of Warcraft, want to know what our role is in the park, want to know what the objective is, want to be able to measure our success. And organizations that say, you know what, that’s the kind of participatory environment I want to be in are taking advantage of this stuff. And I think social media and technology make that participation much more visible

Mark McDonald [00:06:27]:
in a world where people aren’t getting massive bonuses for their work, that intrinsic reward becomes that much more important and that much more of a driving force.

Sanjog Aul [00:06:37]:
Now Mike, as you would agree, I’m sure you’d agree that people come in all different flavors. That is, some people would not want to play at all. There’s would not get their blood boiling when they see a good gory game. They would actually find that to be repulsive and the others would not want to go to that level of excitement and they would play just for the sake of fun but if it starts stretching them and or challenging them, they’ll say I’m not going to play it. So you could have the same type of behavior existing in an organization. So do you think gamification would only be useful for people who are all charged up with that mindset that gaming is what kind of takes them to the next level and that if we say that that means the change is not going to be pervasive?

Michael Hugos [00:07:19]:
I think that the word gamification, it is the predominant word. It is being used right now in the press and yet it sounds faintly awkward or even trivial. And so the word gamification often calls up, I think, the wrong image in the mind of people who are considering using it. I think it calls up the images of points and badges on your website and somewhat silly things that might be more appropriate to high school or even grade school and that misses the point Mark earlier remark. We all basically have the same DNA and we all are basically motivated by similar desires to participate in something that we feel is meaningful and larger than ourselves, to be recognized for our contribution and then also to experience the satisfaction, the intrinsic satisfaction of getting better at what we do and seeing the feedback that shows us we are indeed getting better. So the challenge when companies start to use the thing we currently call gamification is that you need to roll it out in such a way that it doesn’t just appeal to that smaller group of people that you mentioned who maybe already are very hyped up and charged up about doing that, and that it has broad appeal across the whole organization.

Sanjog Aul [00:08:44]:
Now, Mark, do you think when we go to a doctor and we say we have a specific ailment, the person does not give you one medicine that cures everything that you may have, they may go based on what specific problem we have? Do you think enterprise transformation related problems, if inventory would have some specific areas where gamification can act, actually create value in the others, we are still scratching our heads to see what we can do about them.

Mark McDonald [00:09:10]:
Well, I think, Sanjog, if you think about it, if you take a step back and think about it this way, any kind of transformation involves really two major things. One is a behavior change and one oftentimes is to get the benefits, you have to make decisions differently than you’ve made in the past and those two factors are essential elements of any game design, what you reward and what is less rewarded but more importantly, we have the ability to give people the information to be able to make different decisions, to see the results of different decisions, and to modify their behavior by themselves in a non coercive way that they’ve never been able to do before and that is essentially the elements of the game. I think Michael’s right. We’re going to lose

Mark McDonald [00:09:52]:
the true business impact of those features and functions. If we get hung up on the name and the word gamification and we don’t take the next step to say this is really another form of business design and another form of leadership that’s more democratic, more participatory, more creative and more inventive and if we just get stuck in game mechanics, we’ll lose all of that.

Sanjog Aul [00:10:17]:
Mike, do you think gamification should be categorized under a tactic, a leadership style or a mindset?

Michael Hugos [00:10:28]:
I think it’s a mindset and then it trickles down from there then it can confuse your leadership style and it can also be a very effective tactic and again, heart speak words of wisdom there. This is much more than just putting flashy graphics or smiley faces on websites, which has been done up until now and it has produced some interesting results in the area of customer service and sales and marketing. but there is a lot more going on and this whole notion of participatory decision making and in any game, the main thrills for the players is that they are all participating. They’re not just standing around waiting to be told what to do by somebody. Everyone can see what’s going on,

Michael Hugos [00:11:14]:
everyone has a role to play and typically the games that get us all charged up are team games. And it’s that feeling of being part of a team, either on the team or fans of the team. So it’s that togetherness set, that charge of energy that you get with that kind of scene spirit. That’s what we’re trying to use game mechanics now to infuse into orbitage behavior.

Sanjog Aul [00:11:38]:
There could be enthusiasm. Mark, this is a question for you. But it also could also have a situation where we get into either analysis paralysis because a lot of enthusiastic players in the game are having opinions, but there could be difference and in order to get consensus, because we want to make decision as a team, that could delay the decision making and thus would be counter productive. Do you think that’s a risk factor in this approach?

Mark McDonald [00:12:04]:
Well, that would be a risk, Sanjog, if you were applying game mechanics partially to the problem, in other words, you were saying that all decisions were going to be made by the team captain and people could talk about and discuss the decisions, but they couldn’t actually make them and take action and as we’ve seen already in social media and kind of mass collaboration and the creation of social organizations, the ability to use feedback to build consensus is an incredibly powerful motivator and that is an element of game mechanics. I think the important thing to think about here and to kind of help kind of stretch the view a bit here is I’m just going to tell you a real quick story. I was at a CEO event at Wharton in Philadelphia and we spent four hours discussing four basic questions. Who are we and who are they? You know what is winning versus value creation? Who is the competition and who do we collaborate with? We’re talking about strategy and markets and structures and all other stuff.

Mark McDonald [00:13:04]:
Those four questions are essential elements of any business strategy or any business transformation. They’re also essential questions that get answered via game mechanics and so if I’m using game mechanics just to be able to kind of put points on the board and a badge, as Michael mentioned, but I still don’t change the way I make decisions, the way I manage in a more participatory and collaborative way, then yeah, you could get gunked up in this, but the interesting part is a game’s organized around a central goal and while some people will say that goal is completing quests, that goal can also be getting working capital out of the supply chain. It can also be raising, reducing the amount of time required for customer service and customers can play in that game too, which I think opens up a whole new set of opportunities with these technologies that really move game mechanics into business, into the business mechanics realm.

Sanjog Aul [00:13:54]:
Let’s take a quick break listeners. We’ll be right back and Mike, when we come back, I’d like to see if there is some quantification of result that can be shared with the listeners where how much value truly has been seen getting created when enterprise gamification was adopted versus what was being done before. So let’s do that comparative study and explore this more when we come back. Please stay tuned listener

Sanjog Aul [00:16:13]:
Welcome back, so let’s crunch some numbers or look at some numbers. Mike, in your research and as you’ve seen our organizations adopting this enterprise gamification, have they been able to incrementally show a growth and a percentage improvement in intangible hard numbers and dollars in or in intangibles when they used enterprise gamification versus when they did not.

Michael Hugos [00:16:36]:
Well, let me start by saying that the first wave of gamification was directed toward largely sales and marketing type of effort and the vendors. There are several well known vendors in that space such as Vagville and Bunch Balls, Achievers is another one. They do have case studies that will show that in those type of applications there is greater participation and maybe Mark has got some more quantitative research in that area. I can provide some qualitative observations and some stories from the people I’ve been talking to in my research. Actually, just last week I was talking with people at a large network of global advertising agencies that do business under the name of THC and their issue is they have agencies around the world often working on common campaigns for the same customer and how do they get people to collaborate and share ideas, especially the culmos of sharing ideas where at the end of the day a lot of us still hide our knowledge because our knowledge is the basis for our power. They work with a actually they’re in the process of rolling out right now a platform that they feel perhaps is the first platform applied at this scale.

Michael Hugos [00:17:57]:
We’re talking up to 3,000 people worldwide right at the heart of this new application that they call Store, because the idea is to store new ideas or ad campaigns. The heart of this they have put in game mechanics, typically the idea of recognizing people for their contributions, letting people see tangible evidence of their progress as they work up,. they start out at a rank of contributor and then they move up through editor, finally arriving at the exalted rank of thought leader but when they get there, it’s not just because the block likes them. It’s because they have actually done things, contributed things that got used in campaigns, that kind of transparency and objectivity. They are already seeing real results. It’s drawing people into the process. They actually have,

Michael Hugos [00:18:48]:
they told me and the the company that developed this software for them, a company called Code Worldwide, they said we specifically don’t use the term gamification because it’s already been labeled as, quote silly. So that the those of us, and I think maybe I’m one of them who on certain days are real curmudgeons. If you use a word that I’ve already branded in my mind as silly, I close down, I don’t hear anything what you say. So, that is an example of and it’s just happening as we see big commitment, 3,000 people worldwide. They want better collaboration for sourcing ideas, so you’ve deliberately turned a game mechanic that they’ve decided not to use the phrase game of fatigue.

Sanjog Aul [00:19:32]:
Mark, you got some numbers.

Mark McDonald [00:19:34]:
Not so much so numbers Sanjog as much as potential applications. So Ross Smith out at Microsoft has been doing some really interesting things here in terms of using game mechanics to accomplish and achieve work tasks that previously were kind of dull and boring and so if you can imagine translating all the help text that goes along with a Microsoft Windows release into all the different languages that Windows is released in, it’s a very laborious task. Ross and his team set up a game that’s similar to the NC2A titles that gave points to people who were translating and validating the translations. They accomplished in literally in less than a couple of months. What normally would have taken a long period of time and been a very arduous task was accomplished in a way that built bridges across the company. So I think the notion of gaming in the strict sense is still, as Mike points out, Michael points out, kind of concentrated on sales and marketing and digital marketing. I think where we’re seeing these more significant innovations like Cemex using it to implement their strategies via CEMEX Shift, they don’t show up as games, but they have significant transformational potential and impact.

Sanjog Aul [00:20:40]:
Now Mike, if you were to look at the framework and or the whole concept like we’ve got so many other frameworks that we look at and try to interpret and then different organization try to deploy them differently and it turns out that the framework just becomes as effective as the interpretation within an organization. Is this the same fate we should expect for gamification, because if it is too wide, too broad, then it’s as good as not even having it.

Michael Hugos [00:21:11]:
Yeah, obviously that is an issue, and I would say actually Mark has co authored a book called the Social Organization which really provides a good background of framework. People need to watch out for bad answers, literal interpretations. I have noticed that in the gaming world as it’s these techniques start spreading outside of just sales and marketing and being used in ways to modify business operations. It’s often the first wave of people who participated in the sales and marketing gamification and the video game designers themselves, they often start to feel like, well wait a minute, what is this? What you’re doing isn’t what we call games and then they disagree with it and what is happening now is that I like to use the phrase game like and if what we’re struggling for words but in a game like model you can, you basically have four traits here and then it’s a matter of how do you apply them and those four traits are goal. We all need a common goal.

Michael Hugos [00:22:21]:
Second thing is rule clear and simple enough so that we can all understand what the rules are, not that we need a Philadelphia lawyer to interpret them to us every other day. Then the third thing is a feedback system, a real time feedback system that we trust, that is showing us do our actions take us closer to or farther away from the goals and then the last thing is reasons to get enthusiastically involved. When you have those four traits and you find ways to apply them to the situations that you are trying to transform, then you find game mechanics have a lot to offer because of the way that they trigger our innate human desire to be involved, see ourselves recognized and see progress and it is not a matter of just simply installing a package. Oh, I have a great gamification package, install it. Yeah, like I installed my ERP system and then tell everyone to use it.

Michael Hugos [00:23:17]:
No, that’s not. Definitely starts with a frame of mind kind of throat, keeping those in those four traces in clear view as you start to experiment with way to embed them in the organization.

Sanjog Aul [00:23:33]:
Mark, do you think in order to get the full potential out of this gamification approach, is it better to leave it somewhat of free form or is it better to kind of nail down some of the basic guidelines and principles and standards and benchmarks, et cetera, for people to start adopting it, because when you leave it too open, a lot of people say, yeah, that’s another hype. I’m not sure what to do and they might be on the fence and the real value never gets demonstrated to the degree so that it becomes pervasive and actually people yet create more value and that’s the question here. Should we confine or stifle people’s creativity by putting structure around it?

Mark McDonald [00:24:15]:
Well, I think you need just enough structure and we certainly found this in social media applications, in collaboration, you need to find just enough structure, not so much for the benefit of the community or in this case the benefit of the game player, as much as it is for the management of the organization, so they understand and can see that this has a meaningful business purpose, that there is a good business reason for engaging this. I think if you think about any kind of collaborative environment that you face, as Michael pointed out, there are a basic set of rules that kind of govern behavior and I think an effective business game, an effective application of game mechanics, to business, which is something that the CIO is predominantly concerned about. The fewer rules that basically they say you can’t do this and prohibit certain behaviors, but leave other things open does leave the floor open for creativity. Remember, we’re all looking at the same business goal and we’re moving from a world where everything could be predetermined and controlled via traditional IT technologies to a much more open and collaborative world where you know, where the three highest things that customers value in terms of interacting with you as a company are

Mark McDonald [00:25:24]:
number one is they see their participation in the creation of their products. Number two is that they participate in resolving their own issues and challenges and number three is that you involve them and solve their challenges for the right time, the right way and the first time and those are all things that cannot be prescribed as much as they can be encouraged and be set out established as goals. So I think this is really going to break or really kind of give CIOs a headache because they’re used to predefined prescriptive solutions and we’ve entered a world where we’ve got all those basic prescriptive solutions in place and all the variants, all the innovation, all the energy, all the value is going to come from these less strict, less structured behavioral approaches.

Michael Hugos [00:26:11]:
Yeah, Sanjog I couldn’t agree more. That’s a big shift. We’re moving from a centralized command and control economy, the classic top down pyramidal organization, to much more of a network structure simply because top downs, pyramid shaped hierarchies move so slowly and in high change, unpredictable world network organizations had to figure out how to coordinate their actions consistently outperform the hierarchy. So this is a bit of a Darwinian process going on here. It’s not that centralized command and control is bad, but it just doesn’t move fast enough anymore and games have an amazing ability to provide coordination and control to a network of semi autonomous players. The players on a basketball court are not waiting around being waiting to be told what to do.

Michael Hugos [00:27:10]:
So that’s a big difference here. If we can figure out how to apply that to business operations, there’s going to be an explosion of creativity and productivity by those businesses, that figure this out.

Sanjog Aul [00:27:23]:
Let’s take a quick break listeners. We’ll be right back and when we come back, Mark question for you will be that if I were to poll a number of CIOs and their respective staff members, are they deer in headlights, scratching their head what to do on the fence or are gung ho to take this on even though this is 180° opposite their DNA and they are asked to jump into uncharted waters. Please stay tuned. We’ll be right back and listen to Mark McDonald.

Sanjog Aul [00:29:46]:
So Mark, the question is how should the CIOs and other IT leadership and the staff take this because this is not directly coinciding with the true command and control approach and yes, they are trying to become more and more flexible and trying to adopt this network structure, but they are measured. Their performance is measured not on how cool they are, but how predictable do they make in the business and IT operations.

Mark McDonald [00:30:11]:
Well Sanjog, it’s a great question. I think there’s two ways to look at it. First off is that if we look at it as we’ve been discussing just as a gamification trend and turning things into games, then it has the mech, the notions of a passing FAD. If, however, CIOs are willing to kind of look beyond that kind of the buzz about it and say I’m going to apply game mechanics and combine it with business process design, combine it with information transparency and the connectivity and collaboration capabilities of digital technology, then we find significant applications and potentials and to be quite honest with you, CIOs need to find these significant opportunities and potentials because the IT game that they’re playing right now that you mentioned before, they’re Being measured on cost control and quality of service, is at a stalemate, just like tic tac toe that nobody plays anymore. Nobody really wants to play this old IT game of cost, quality and risk management because they know it just doesn’t move and move forward and so we’re looking at technology gamer that really talk about how do you create value through participation and collaboration

Mark McDonald [00:31:21]:
and these mechanisms are essential elements of that new game that many people already outside of the IT organization are trying to play and I think the CIOs with that combination I mentioned before between business process analytics, transparency and digital technology has a tremendous opportunity that nobody else can really take advantage of, be it a bit exploratory and innovative.

Sanjog Aul [00:31:45]:
All right, so Mike, in your world, when you look at enterprise gamification, yes, this is new. So people want to talk about all the, the successes that we may have had. How about some of the not exactly horror stories because this is just getting started. What are some of the issues where people started on the wrong foot and or made some mistakes which is actually causing them more harm than good?

Michael Hugos [00:32:08]:
Sure, I won’t name names, but certainly I’ve talked with people in companies where this was rolled out the great fanfare, as many new things are and then it was also confused with the notion of making work fun or making work a game. Work is not a game. I think work is fun when you’re engaged, whether you’re working hard or not. As a matter of fact, working hard is part of the fun but when you roll out these initiatives with a certain condescending attitude on the part of senior management, when it’s clear that the senior management is not participating, that’s always a big zip off that this does not be taken seriously and when you emphasize the wrong things, when it turns out to be, in effect earn a smiley face for turning out more widgets, that is a prescription for disaster. Nobody likes to be played for a fool

Michael Hugos [00:33:03]:
and being given little points and badges for working like a crazed weasel is not something that is going to motivate people. So with that attitude in mind, work is fun. That’s a terrible way to go about it.

Sanjog Aul [00:33:19]:
So if you don’t have that, then what else is available which provides a tangible feedback like, so if you’re not giving a badge and a person who’s a CIO or maybe a mid manager, that person doesn’t get all jazzed up about getting a badge or doing that whoopee thing that you just mentioned. So what would motivate and incent that person?

Michael Hugos [00:33:38]:
Things like being able to, once you prove that you have the skills and the capability, being able to, as they say in the game world, level up and do more interesting work, getting more responsibilities, getting believing that the feedback that you’re getting isn’t just politically tainted because your boss likes you this week, but instead is a much more objective measure of your skills and the value that you are creating and delivering to the organization. Those are real tangible rewards that all of us respond to. It turns out a lot of research shows that only a minority of people work for money alone and most of us, of course we need to make money. Don’t dare substitute some goofy badge and then cut my salary, but there is a point where as long as I can cover the rent and still have a few bucks left over to take my wife out to dinner, then I’m interested in the quality of the work I’m doing, the interest, the challenge level of my work and those are things that you can use to reward people in a game like way as they show mastery and progress in the talents that are required to do their job well.

Sanjog Aul [00:34:54]:
So when I asked you this question about mid management, Mike, you mentioned that they should you. You actually use the terms and things which we call as leadership and management one o one. Where does this gamification. Is it just like a sugar coating and or giving it another wrapper that this is now gamification which was known as leadership and management one o one earlier?

Michael Hugos [00:35:15]:
Sure, to some extent. I mean in one sense there is never anything new under the sun. All the timeless truths are timeless because these are truths. Some truth specifically endures but I would say don’t throw out the whole idea just with a bah humbug trog of the shoulders. There’s nothing new here. There is incremental change and there are new things. Technology that has been developed by video games over the last 20 years is awesome.

Michael Hugos [00:35:47]:
It is incredible. When you look at the way video games, and in particular I’m talking about a group of games known as MMOs are massively multiplayer online games, World of Warcraft or Eve Online are good examples. When you look at the way that technology is employed to actively ensue, motivate and engage hundreds of thousands of people on simultaneously around the world. Those are examples that business can use and apply to their own. It stacks to get much more participation and cooperation from their own people.

Sanjog Aul [00:36:26]:
Mark, to further get some clarity, would you have any examples of things that you would do to mid management to incent them and motivate them, which does not look like 1 o 1 leadership management.

Mark McDonald [00:36:41]:
Well, I think the central element, St. Joeva is when I use the word leadership and I use the word management, I’m looking at a one person on top and one person beneath relationship and I think the fundamental shift here is so much more of its peer to peer management and it’s self directed. So there’s a company over in Sweden called Delaval that’s digitized the dairy farm. They’ve put remote sensors all throughout the farm in the milk production process and generate a ton of information about it but the most interesting thing is the biggest application, the biggest request for information that people want is how does my farm stack up to other farms that are like me? And we see this repeatedly throughout, throughout, through this. And so Blue Cross Blue Shield in California used this to increase the rate at which and the speed at which people registered for their health benefits. And what normally was a five week process became a five hour process because they were giving T shirts away to people who registered online early.

Mark McDonald [00:37:40]:
Just they basically said I protected my family by registering online and that’s peer to peer, that’s peer influence. That’s benchmarking yourself to the rest of the market and saying how do I have to change my behavior to get a different level of performance? That’s not management 1o1. That level of self motivation and intrinsic reward is absolutely critical and I think when done right is incredibly powerful when done wrong. It’s the exact opposite of engagement, which is cynicism and cynicism permeates much of what we talk about in leadership and management 1 o 1. So these game techniques are significant advancement in that are enabled by technology to help us change the way companies work.

Sanjog Aul [00:38:21]:
So it’s more like providing transparency and real time feedback about what you’re doing. How’s that match up to what your peer is doing so that it becomes like a healthy race? Is that what you’re getting to?

Mark McDonald [00:38:32]:
No, it’s not a healthy race so much as much as it is to provide information and the tools to be able to change my outcome. So if all I do is provide feedback, work like that classic I love lucy thing in the candy factory. We’re just more pieces come out and I get told I’m failing or I get told I’m successful. When you see people really but change behavior, when you see people really transform, they always go through a process of understanding kind of what other people are doing, what’s working for them and then they internalize that to themselves. So just saying you handled 5,000 customer complaints this year. Good for you. Is the epitome of cynicism and the epitome of kind of industrialized work in the future.

Mark McDonald [00:39:13]:
Even as we see today with more knowledge workers, they want more qualitative understanding of how well they’re doing and then also kind of what is it that they need to do to be different, to have work be more meaningful, to have a greater result that as Mike mentions before, enables them to level up and if you look in your own life, in your own career, you’ve seen examples of that where you’ve gone through a change or learning based upon that peer feedback and then you’re able to level up and do things that you weren’t allowed to do before.

Sanjog Aul [00:39:39]:
Now, Mike, a question here would be we if first of all let’s validate this. Can we call enterprise gamification a catalyst? So whatever we are trying to achieve, does it help us do faster or better or both?

Michael Hugos [00:39:55]:
I would say better. I like Mark’s analogy of the I love lucy show where the cakes are coming down the assembly line. She’s supposed to be putting them, putting cherries on top and putting them in boxes and they just keep coming faster and faster. That’s the old industrial model, that’s the assembly line model. We should not be thinking of the new organizational model as just the beat it up version of the 20th century assembly line model. It is not that because we live in a world now where there is so much unpredictable stuff and games give us a way to respond quickly that is important, respond quickly to unpredictable situations in ways that keep the company moving toward its goals. Games and game mechanics are very good at doing that. That’s what we thinking about, not just a speeded up version of the assembly line.

Sanjog Aul [00:40:48]:
Let’s take a quick break listeners. When we back my question here would be said what if we have not defined the end goal properly and or it gets misinterpreted? Do you think the enterprise gamification can actually help timely validate correct course and actually put us back in the right direction? Or is it going to take us faster towards that road to failure? Please stay tuned. We’ll be right back and explore.

Sanjog Aul [00:43:10]:
Welcome back. So Mark, there could be a chance where we before we started implementing or trying to use this gamification approach to bring about transformation, but there could have been incorrectly defined end game or it could have been misinterpreted. First of all, what are the chances of that happening and secondly, if it does happen that way and we start going in the wrong direction, do you think we have the potential through enterprise gamification that we correct the course, we will have the time and we will not just be accelerated towards the wrong path just because we are using this technique?

Mark McDonald [00:43:44]:
That’s a great question, Sanjog and it really represents a significant opportunity to contrast gamification with business process design. And so you’re absolutely right. When we design a business process and the business process goes wrong, it takes us a while to figure it out. It takes us a while to redesign the process, redeploy it, and tell people what you thought was the right steps to go through are no longer the right steps. With gamification, all of that happens much, much more quickly and much, much more dynamically simply because we’re talking about goals and so we’re trying to achieve a goal like getting us work in process down in a supply chain, or improving customer service, or increasing the ability of salespeople to call on prospects and because that goal has metrics and feedback around it, as Michael mentioned before, one of the elements of a good game design, we’re going to see really quickly whether or not people understand the goal and they’re using the right means to achieve that goal

Mark McDonald [00:44:40]:
and then if they’re not, we have the opportunity just to reset the goal and then put some, then put some new rules in while still playing the same game. So that’s the fundamental difference between a participatory and behavioral based approach to creating business value as opposed to a predetermined and prescriptive approach to creating business value. I can just tell people, guys, we were trying to do this, but we’re not getting the right result and you saw that in call center application. For example, when people were measuring call time, you got a lot of people, would you get on the phone, talk for like 10 seconds and then get off, when you started to measure close rates. I didn’t have to set a new set of policies and procedures. I just had to tell everybody playing the game what the new goal was and they adjusted their behavior accordingly and that’s what we need for this much more dynamic, flexible and adaptive world we’re facing.

Sanjog Aul [00:45:27]:
Don’t you think it’s too good to be true? The way you mentioned, so where is the secret sauce to success here? When you said that people are just themselves. Is there something which is well, when implemented well is when this is going to happen or if it is, how would we know what you just said is going to happen every time. How do we ensure that?

Mark McDonald [00:45:46]:
Well, because obviously you’re actively monitoring the game and I think the other thing that’s fundamental to all of this and goes back to the fundamental questions that like a Jim Collins asked is if I have good people, you know, who want to achieve, who are interested in, improvement, who are interested in doing their job and doing well in their job, then all I have to do is kind of let their behavior and their natural inclinations kind of loose and to achieve what they’re looking to achieve and so getting the right people on the bus at a basic fundamental level is absolutely essential to this and by and large I know a very few people go into work and say, you know what, I’m going to break everything I can touch today. I’m going to do a lousy job and so I think these game techniques, these game mechanics give us the opportunity to tap a deep reservoir of personal behavior and personal self image and personal desire to do good work and be recognized for it that we’ve never been able to tap before with prescriptive IT and prescriptive business processes.

Sanjog Aul [00:46:44]:
So Mike, do you actually mention about that overzealous approach to pushing out a badge or whatever else that you know, at the tactical level gamification offers. Do you think there is a way to see signs that we are going totally overboard with it and control it and do you see that happening more often than not?

Michael Hugos [00:47:05]:
Well, I think that we all have to remember that it gets back to no one likes to be treated like a child. Assuming we’re no longer children and when you see Mark’s example for instance, in a call center, if you get badges by getting people off the phone in a hurry, well then you just get people off the phone in a hurry. You don’t really solve any problems, but you earn a badge. So this isn’t rocket science, that’s the interesting thing and it’s hard to sometimes explain it, but people do want to do a good job. The intrinsic value of work is the satisfaction we get from it even more than the money that we earn and when you show people ways to do things that they feel proud of, that they can see they’re getting better at then, don’t worry about all these badges.

Michael Hugos [00:47:56]:
It’s honest, real time feedback. Badges are simply a form of feedback, but you can see feedback in all sorts of ways and we’re talking now in the IT world about business intelligence, big data, the secret is RSOs, so the people show me a scorecard, let’s just do it. Let’s talk about badges and leaderboards, let’s talk about a scorecard. Show me a scorecard that shows me how I’m doing. Give me a reason to care about the outcome and then let me get involved, tell me what, but let me figure out how.

Michael Hugos [00:48:31]:
Those are game like ways that companies are learning to apply right now to deal with the kind of global real time economy that we all live in.

Sanjog Aul [00:48:42]:
Mark, if you had very succinct set of advice to people who are trying to adopt gamification and there are some do’s and don’ts, would you would want to outline those?

Mark McDonald [00:48:52]:
Yeah, I think the do’s are to have a clear goal and have a defined kind of business outcome. The thing you want to happen and to happen more often. I think one of the don’ts is to just implement mechanics nilly willy throughout the process as Michael’s been saying. The thing that we see, for example, is in digital technology strategies is the strategy sometimes overwhelms the fundamental simple things that we’re trying to achieve and when we go after achieving those simple things, we get much better reactions and then I think the other thing is, and particularly for CIOs is that this is not a transaction, this is not a project. This is games evolve and they expand and they contract and they correct and so engaging the business and saying, look, we’re going to, we’re going to try to go after this outcome and we’re going to go after this outcome over time becomes a very important way of looking at it and making adjustments. So be willing to be adaptive, be gold, mind and focused and avoid just routine implementation of mechanics in favor of how you shape behavior becomes some of the central elements here.

Sanjog Aul [00:49:59]:
So Mike, what training, education, mindset changes and leadership style changes that you think should happen or should be done in order for an organization to get most value out of this enterprise gamification and as the end goal of enterprise transformation?

Michael Hugos [00:50:14]:
Well, I think that some of the themes we’ve talked about here on the show, there’s this notion of give up the centralized man and control idea of the 20th century. It worked well in the 20th century, but it’s not working well now. Find ways to include more people. Most people want to do a good job. So give them a clear definition of the goal and then give them clear and honest feedback and then they will start to monitor themselves. They will correct themselves. Those are the things we need to think about now. This is not, when you look back 100 years ago, it took us really the first decade of the last century, we still thought we were back in the victorian age.

Michael Hugos [00:50:57]:
The first decade of this century, we still thought we were back in the industrial age. Well, we’re not, I think we know it now. We’re not quite sure what is next. I am certain that it will require a new way of controlling and coordinating organizations and game mechanics are right down the middle of how we are going to learn to control and coordinate organizations in this new economy.

Sanjog Aul [00:51:21]:
Thank you so much again, Mark and Mike for sharing your thoughts on how gamification can actually help improve enterprise transformation.

Michael Hugos [00:51:30]:
My pleasure.

Mark McDonald [00:51:31]:
Yeah, thanks Sanjog.

Sanjog Aul [00:51:33]:
And I’d like to also send my thanks to Wilbert Williams for his question about gamification. Wilbert was a winner in our New Year New Book contest and he in fact won an autographed copy of the Social Organization-How to use social media to tap the collective genius of your customers and employees and it was authored by Mark McDonald, one of our panelists today and also was co authored by Anthony Bradley, another Group Vice President at Gartner. So thank you again for listening to CIO Talk Radio. This is Sanjog Aul your talk show host. Till next week take care and god bless.

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