Badge of Engagement | with Kris Duggan [Transcript]

by Joe Sherwood on May 17, 2013

Link to podcast episode:  Badge of Engagement | with Kris Duggan

Jesse Lahey: Welcome to the show “Game Changers.”  This is the show for CEOs, HR Executives and other business leaders, to learn about internal gamification.  Over the course of this series, you will hear examples and pitfalls, discover how to assess when it is an appropriate strategy and learn to evaluate gamification partners and game design ideas.

I am Jesse Lahey, and in this episode we are featuring our first interview with a gamification solution provider.  Our guest today is Kris Duggan, Co-Founder and Chief Strategy Officer of Badgeville, which is known as the number one gamification platform and has long been a leader in this newly emerging space.

Kris, welcome to “Game Changer.”

Kris Duggan: Thank you very much, Jesse.

Jesse: Kris, what is the history behind Badgeville and the Platform that you offer?

Kris: Our Company is about three years old, we have over the last three years, have grown to become the leader in a still emerging space called Gamification.  We’ve provided software platform that allows any company to add gamification elements and techniques to any type of user experience.

Anywhere – anytime you have the audience that could be a customer type of audience where you are trying to drive more loyalty and engagement.  It could be an employee type of audience where you are trying to drive more productivity and more engagement.

Our software is almost like, think of it as a layer that you could add to any other software to really maximize engagement behavior and kind of how people engage with systems, whether they are customers or employees.

Jesse: I would love to dive in to some of the specific about how you do that but, can you give us a sense, first, of your personal history and how you came to be involved in gamification?

Kris: My first kind of experience with Gamification was in – I was working at a company called WebEx, it was a very fast growing company and I joined – I was there for about four years.  When I joined, there was about 300 people, when I left there was about 2,000 people.

I was able to see firsthand, how in the sales department, we were able to actually use many of these kind of techniques to drive the right kinds of behaviors that we are looking to get out of our sales people, that did not require any kind of financial incentives.

Do things like, ranking their performance, using social pressure and the variety of techniques that we use really ended up driving and motivating their performance in combination with financial incentives.  I thought that was really kind of an interesting observation at that time when – I thought the perception of sales people is they are totally money motivated, they’re only going to do things that kind of match their own financial incentives.

I saw time and time again, we were able to create systems, processes and experiences that drove their behavior when actually, financial wasn’t even part of the equation.

That kind of was the first experience and then I actually went on to join another company, it was a collaboration software company called Social Techs and this was around in 2007.  We are having this challenge, on how we really change our user behavior around collaboration and at the same time, I have some friends that were working at Zynga and they called me up and they said, “Hey Kris, you wouldn’t believe what were able to get these users to do by using these kind of modern techniques around recognition and rewards in social kind of proof.”

For me, the light bulb went off and I thought “Hey, I don’t know how I’m going to do it, where I’m going to combine enterprise software with behavior change and with more of these kind of modern techniques around engagement and create a software product that is really going to help transform how software gets delivered and used inside companies.

I ended up hiring a whole bunch of folks that are experts in this field.  We’ve grown a team now of about a hundred people, we’ve gone through three rounds of financing, raised about $40 million, scaled hundreds of companies as customers now around the world, I think like in 22 countries.

It has been kind of a wild ride but the fundamentals of the concept are, “How can you get more people to do more staff, more often?” and, “What are techniques that software can help incentivize, motivate, encourage and how can we engage these people to become either better more loyal customers or more productive employees?”

Jesse: You mentioned earlier that there were right ways and wrong ways to go about this emerging trend called Gamification, and how do you define Gamification?

Kris: The simple definition is, “taking techniques from games and games experiences and applying those to things that are not games.”  But, I think, that is kind of abstract kind of definition and I think business leaders that are maybe trying to learn about this or understand this more, can end up confusing gamification with games.

Our business is not about games; our business is about driving behavior.  I think, a better way to define gamification as, either tapping into what truly motivates us and the real psyche of our minds and of our behavior; tapping into those things in ways that drives more engagement, more behavior and more productivity.

I think that’s one of the things – with a new market, it still takes awhile for people to understand this.  Gamification is not games, and it’s also not about just things like competition.  I think people associate Gamification with, “Let’s just make everything a leader board, let’s get a staff ranking and that will motivate the people to perform better.”

What we found is actually that’s not the case.  Many times actually, making things too competitive can de-motivate the bulk of the work force and actually only motivate a very small portion of people that are willing to perform to be at the top of the leader board.

There are many techniques that we end up using, some of them can be competitive, some of them can be about recognizing and rewarding, and some of them are about building reputation and status.

There is a whole of host of kind of different elements and tools that go into a Gamification Strategy and that is one of the things that I spend the bulk of my time helping on really helping business leaders understand that this is about psychology, it’s about behavior and then, explore all the possible types of tools that they could use to really achieve the business goals that they are looking for.

Jesse: Let us talk about some of those tools and techniques that you offer at Badgeville.  Your company name is very catchy and memorable and yet, when I first heard it, I thought of course that, maybe the only thing that you do is you allow a way for badges to start showing up in different software packages but, I am sure it is broader than that.

Kris: You have to start somewhere; I think that’s how we came up with the name.  Yes, it is catchy, it maybe represents what where trying to achieve but, I think you’re right, I think it only kind of captures a part of it.

When we think about how you implement these programs, maybe the things that are fundamentally changing, because things are becoming more digital, people are using more web applications, mobile applications, et cetera, is that we are now able to really define the types of behaviors that we’re looking to drive as a team.   Whether that’s a sales team, a support team, even a finance team, we are able to actually define digitally the behaviors that are valuable to us, as business leaders.  So, maybe the behavior is closing a high value customer in sales, you know, CRM setting; maybe closing quickly an open help desk ticket in a support desk application.

In a finance setting, it might be saving the most money for the company in terms of maybe booking, travel that’s more affordable, or making wise decisions around that.  I think, that is the big first change that we’re able to instrument and measure which actions people are taking.  We can capture who did it, what did they do and even what did they do that on.  They opened the help desk ticket tagged Boeing, they closed that account record tagged IBM and so, they were able to create a very rich kind of understanding of the actions that our workers are taking or customers, et cetera.

The second thing that really changed and is really interesting and a big opportunity for companies is that the incentive systems that we can use to drive behavior, you know, those actions that we just talked about, I think have really expanded, fundamentally. I think about how in the past, a reward system might be, “If you buy nine, you get one free,” or in a work force, it could be your annual bonus.   Your salary and then your annual bonus, is the rewards system.

What we are seeing is that, there is so many other types of incentives and tools that employers and companies can use to create a sense of fulfillment and recognition for their employees.  These are things like, status, the ability to build tenure and demonstrate that.  The ability to feel recognized for doing certain activities, the ability to demonstrate expertise that they can actually show the expertise that they have been able to accumulate during the course of their tenure.

The fact that they are a mentor, the fact that they’ve gone through certain training courses and they are certified in certain ways, we believe that the ability to tap into things beyond financial incentives like, feeling like you are learning, feeling like you are growing, feeling like you are being recognized for a job well done, feeling like you have structure and guidance around the things that you’ve done and the things that you should do next.

Understanding how you do compare with your peers and all of the feedback loops that go into all of the things I’ve just talked about.  If your workers have expectations that they are going to get real time feedback, they are going to be “on boarded” very quickly, they are going to be guided around what they should do next and they are going to enter these kind of tracks where they are going to have very clear guidance and feedback around how they are performing.

Jesse: One of the things that makes Badgeville different from a lot of the other gamification partners or solutions that companies might be looking at is, you are a platform-based, you are an actual Gamification platform, where a lot of us if for familiar at all with gamification, we have seen maybe an application, a single application, let us say, Nike+, I see it in my Smartphone, I know what it does.

What is the experience like?  Let us say, as an employee of a company, when there is a platform available like Badgeville?

Kris: To the employee, we are probably a little bit more kind of embedded or integrated so that they may or may not even know that Badgeville is powering these experiences.  But,  the strategy that we’ve taken is, we believe that there is a lot of software that are out there and a lot of that software doesn’t  get really very high level of adoption.

In fact, over the last five years, it has been a trillion dollars worth of software that’s been sold and Forrester reports that less than 50 percent is actually used.  We are talking CRM software, helpdesk software, collaboration software, finance software, expense management, and mean every slave of software you could imagine.

The business strategy that we’ve taken is, we want to be the kind of engagement layer that sits on top of any piece of software to maximize adoption and engagement of that software.

We work with really large Fortune 1000 companies that want to add Badgeville to SharePoint or maybe they just rolled out SharePoint and they really want an insurance policy to make sure that there’s maximum engagement with their employees.  It could be that they’ve had a Jive community that hasn’t really kind of maybe, maximizing the participation rate and so they are going to add Badgeville to Jive, in order to really accelerate and turbo-charge employee participation.

The nice thing there is that, we not only do we work as a layer on top of the specific application, but back to this concept of where is this all going, and in the next couple of years,  we’re already starting to see companies asking about this capability is, “How do you roll all these things together?  How do you create unified reputation, or, a universal reputation that sits across all of these application investments that these companies have made?”

We think we are in a perfect place to deliver on that vision in terms of creating achievements, rewards and recognition framework that would run across an entire company for example.  Back to the point of what is the problem statement that we are solving as it relates to employee productivity, today Gallup Poll did a survey that said, today 70% of workers are not engaged at work, 70%.

Jesse:  Yes, wow.

Kris:  It’s not a surprise that they are not using their investments, they are using the CRM’s and the collaboration system and all these different things.  If we can do anything to really put a dent on that, make work feel more rewarding, more recognition and more guided kind of more sense of progress.  We think that has a fundamental impact on how this company operates.

Jesse:  Just a quick pause from this interview with Kris Duggan to tell listeners about a game we’re playing to have some fun throughout this series.  First, we are giving away a copy of Kris’s book, Business Gamification for Dummies which includes how-to’s plus real world illustration of gamification at work.

To enter to win the book, send me a tweet @JesseLahey mentioning the episode number two, this episode’s clue which is the letter “D” as in Daniel and whether you prefer a hard copy or a Kindle e-book if you win.

We’ll pick our winner at random from the first 50 tweets I receive.  Also, there will be other tasks and clues in each of the first 14 episode in the “Game Changer” series as well as an “Engaging Leader” podcast Episode 38 featuring Kevin Werbach.  From those 15 clues, if you can be the first person to guess the secret phrase, you will win a $100 gift card from Amazon.  Everyone who guesses it correctly will be honored on our “Game Changer” Genius Board.

Now you are still a relatively young company but have you been around long enough, where you have some data that shows whether you are making a meaningful difference within any clients?

Kris:  Absolutely, one of the things that we are very maniacal about is kind of measuring our customer impact, customer success and what kind of results we are able to deliver and because we measure these behaviors pre and post, adding these game mechanics and reputation mechanics and all these different kinds of tools, we are able to very clearly see the impact that we deliver.

I will give you one example, Deloitte & Touche.  Deloitte is a large consulting firm, global consulting firm with tens of thousands of employees.  Their big challenge was we keep having to onboard lots of new hires.  We need to get them ramped-up quickly.  We need to get them trained and certified and we need to get them out into the field so that they can deal with customers.  They have some training programs, their certification programs.  They found that people were not really motivated to go through those.  It was a really kind of dry experience.  People were not compliant.

So, they used our product, Badgeville, to issue a virtual reward to employees that completed the trainings.  When you complete the training, you would get an achievement which would then actually get posted to their Yammer feed.  They use Yammer for company-wide collaboration.  People could see you leveling up and going through these courses.  There is this kind of social proof that happened that could encourage participation.  As a result, they were able to compress the time it takes to have employees go through training by 50%.

Jesse: Wow.

Kris:   Fifty percent, it’s an amazing accomplishment, right?  It’s a dry process and we added virtual rewards, not financial rewards, virtual rewards and the ability for others to see when you’ve earned those through Yammer; an integration with Yammer.  As a result, people were more motivated to complete these courses.  We see that time and time again.

We’ve worked with companies like IBM or EMC.  EMC is a huge $50 billion data storage company.  They had a challenge of, how do we really get our communities as engaged as possible, not only their employee communities but their customer communities?  In fact, they use Jive and these are some of the larger communities, where there are like 200,000 to 300,000 people participating but at a very low level of participation.  So, they implemented Badgeville.

What they found was that they were able to see very significant increases in how many activities people did per week.  The numbers actually were [excellent] [ph 00:20:09].  They increased the critical activities by 40% per week by using things like reputation and a reward system of purely virtual rewards, where in this case, it’s all about storage.  The people wanted to be recognized as experts on the topic of storage and as they engaged more deeply with the community they become more recognized for that.  They had a 40% increase in community participation but they also found that they were able create what they consider even more high value customers that actually spend more than the non-high value customers.

Jesse:  Now just to play devil’s advocate a little bit, because you are adding some game like techniques but not changing the underlying  process, a critique, I suppose could say that you basically are just inserting a bit of extrinsic motivation there and that’s going to wear off.

Kris:  The design that we might implement for on-boarding a new employee, I think has different goals than another kind of program.  But maybe, let us say, expense management, I think that is kind of a pretty dry one.  The CFO wants to get people to get their expense reports done on time.  If you are in a big company that kind of delay and that kind of operational impact of not doing that on a timely basis has a real impact to the company.  Maybe a second goal might be, we want to reduce, if we can, the kind of how we spend and if there are ways to be more innovative around cost management, we would like to achieve that as well.

Think about the current program inside the company.  It is very dry, it is very dull.  You are not getting any kind of feedback.  It is a very painful process.  You do not understand how the bigger picture works.  You just know you need your expenses done.  There is no feedback loop for saving, making good choices and being a good citizen.  I am not saying, “Hey, we are going to turn expense management into a game and it is going to be this like fun thing that you are going to do time and time again.”

What I am saying is for the 12 or 15 times a year that you have to do  expense management reporting, we’re going to use — and here’s maybe where I differ in your definition of “extrinsic” versus “intrinsic.”

I believe that many of the achievements and virtual rewards that we end up actually issuing to users, tap into their intrinsic motivation.  At Google, for example, they recognize people that save them money.  They actually do this.  They have a very well formed program inside Google for incentivizing savings.  They recognize people who are very cost efficient for the company which would be an intrinsic type of reward, that recognition.  In some cases, you actually get to donate your savings or portion of your savings to charity.

Jesse:  Now someone who is listening to this and is interested is probably  starting to wonder what this would cost.  I can imagine because of the wide range of places where Badgeville could be implemented that there is a pretty wide range and cost.  But if someone would like to start with a small scope, do you have a sense for what kind of cost range they should be looking at?

Kris: Yes, I mean the software cost and then there is also the cost that goes into thinking about the design and how is this going to be incorporated and  how are we going to use it, and what not.  We see, in larger companies, we are starting to see people who are hiring Gamification experts or engagement managers or people who are responsible for the Gamification programs which is very exciting for us.  We are not just creating an industry; we are creating a new job requisition.  On the software side, it could start as little as a couple of thousand dollars a month.

Jesse:  How long does an implementation typically take?

Kris:  It depends.  I have seen a customer go live in a weekend.

Jesse: Wow!

Kris: They know exactly what they want, they know what kind of reward system, as you know there are different types of mechanics and engagement strategies they are going to undertake, and really they just need the technology to help deliver that.  They can go live on a weekend.  We also work with companies that are really thinking about how they overhaul loyalty and employee performance.  I have been in meetings where they’ve even brought in HR professionals from their own company to make sure that this Gamification strategy lines up with their whole career path.

As you get recognized in the team for doing certain things that that even represents how you get formally rewarded at the company in terms of career path and career gates.  You can imagine that is a much larger process to undertake.  How are we going to overhaul our culture, our reward system, our values and our beliefs?  What do we really want to get forward?  How do we want to recreate systems that re-enforce that?  How do we get HR engaged in that?

That can be in many, many months or maybe even a multi-year process.

Jesse:  That is very exciting.  Kris, beyond the platform approach, are you doing anything to make the process more turn-key if someone wanted a simpler way to dip their toe in the water of gamification?

Kris: Yes, absolutely.  In fact, we have been investing in the Badgeville for a Salesforce eco-system.  What that means is we have an application that Salesforce.com administrators can very easily activate through the app exchange to gamify Salesforce which by the way, historically, doesn’t have a lot of compliance and usage from their users.  In fact, there are some of the CRM studies that have shown that 50% of CRM deployments aren’t living up to their full potential.  Anything that you can do to drive better engagement, more usage is obviously going to deliver more sales impact for companies.

We are also seeing that beyond almost having a turnkey application.  People are even starting to build Gamification into their force.com application which is powered by Salesforce.  We have actually built an S.D.K. to help companies rapidly embed gamification techniques into their force.com app.  We are investing very heavily in the Salesforce Eco system.  We see that companies are able to drive a lot of sales engagement by using these kinds of rewards and recognition approaches directly inside their CRM software.

Jesse:  Kris, how can someone find out more or take the next step with Badgeville?

Kris:  I think the first step would be to check out our website, Badgeville.com.  They can follow me on Twitter, @kduggan or our company Twitter handle, @Badgeville.

Jesse: Kris Duggan is the Co-Founder and Chief Strategy Officer of Badgeville and the author of Business Gamification for Dummies.  Kris, thanks for joining us today on “Game Changer.”

Kris:  Great! Thanks, Jesse.

Link to podcast episode:  Badge of Engagement | with Kris Duggan

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