How Gamification Can Revolutionize Your Business | with Kevin Werbach [Transcript]

by Joe Sherwood on September 3, 2013

Link to podcast episode: EL 38: How Gamification Can Revolutionize Your Business | with Kevin Werbach

JESSE LAHEY: Welcome to the show, Leaders! Gamification is the use of game design techniques to engage people. For example, products like Fitbit and Nike+ have turned physical fitness into a social video game. Over the last couple of years it has become one of today’s hottest trends in business at companies of all sizes and pretty much all industries. But what is gamification really and is it a strategy you should be using to better engage your employees or your customers? To help us consider those questions, our guest today is Kevin Werbach. Kevin is co-author of For the Win: How Game Thinking Can Revolutionize Your Business. He is a professor at Wharton, one of the world’s top business schools and he created the world’s first NBA course on gamification. Kevin is the founder of the Super Nova Group, a technology analysis and consulting firm. He is considered a leading expert on emerging trends in communications and technology. Kevin, welcome to Engaging Leader!

KEVIN WERBACH: Thanks so much! Glad to be here.

JESSE: Kevin, what’s your personal history about how you came to be involved in gamification?

KEVIN: I’m a professor at Wharton, the business school at the University of Pennsylvania, but I’ve always been interested in and focused on how technology, especially internet connected technology, changed the nature of business and changed the nature of life. I’ve done a lot of academic work on internet policy and telecommunications, but I’ve always followed along interesting trends that you can see developing that are going to be bigger than people realize. One of those trends that I noticed a few years ago was the rise of video games. People dismiss video games still as kind of this silly little pastime, but most people don’t realize that video games are a 70 billion dollar global industry; that there are literally billions of people playing games regularly and sophisticated games are at least as deep and sophisticated as a movie.

So, I got excited about games, but there was really no connection between video games and the work that I did as a business school professor. Then a few years ago, along came this thing called gamification, which was precisely the intersection of everything that excited me about games and the things that I knew about or could put together around what motivates people and how technology affects the conduct of business.

JESSE: So how would you define gamification?

KEVIN: My definition of gamification is that it’s the use of game elements and game design techniques in non-game context. So basically what that means is learning from games. It doesn’t mean turning everything into a game; it means staying in the real world where that’s people working in a business or customers or potential customers or people interested in doing something like getting healthy. They’re engage in whatever task they were engaged in, but gamification applies a variety of techniques to make that experience feel more game-like; to make it feel more fun and engaging in some way using some of the same mechanisms that a good game designer would use to try to make a game successful.

JESSE: Now that isn’t just a marketing trick to get people to do things they don’t really want to do, is it?

KEVIN: No, that’s absolutely the wrong way to think about it and you see out there some people promoting gamification as this great way to fool people and I think that’s a bad idea. It has various kinds of ethical concerns and frankly it doesn’t work because at a shallow level, temporarily you might be able to push people to do something, but ultimately they realize that they’re not engaged in a task that is in any way intrinsically valuable to them. It’s really important in a lot of what I talk about when I teach about gamification or write about it or – I have a whole chapter in my book For the Win called Epic Fails.

It’s really important to focus on using these techniques to achieve legitimate business goals, but ultimately to think about the interest of the player. One of the things that we learn from thinking like a game designer is that the people you’re dealing with are your players. People are autonomously choosing to be involved in this activity because they want to and once you start thinking about them as the object of what you’re doing; as someone you’re going to trick or mislead, then you’re really not being a very good game designer.

JESSE: So thinking about what is intrinsically valuable to them and then essentially just making it more engaging and more fun for them.

KEVIN: There’s a huge body of research in psychology talking about motivation and there’s very different techniques that can be used through what’s called behaviorism to encourage certain kinds of behaviors and successful in some cases to get people to behave a certain way just based on external ways that the people interact with things. So if you give someone feedback, people respond to the feedback. If you give someone rewards, they respond to the rewards.

But ultimately what really motivates people is, as you said, if it’s intrinsically rewarding – in other words, if people feel that the goal is something they want for its own sake. That doesn’t necessarily mean it’s valuable in any kind of financial sense and it doesn’t necessarily mean that something that they just love love love doing; it means somehow that that task connects up with some internal set of goals, whether that’s finding meaning, whether that’s success in your career or your life as you defined it.

Somehow, this is something ultimately that aligns with your own personal sense of what you’re trying to achieve. What’s great about games is that they create a narrative; they create a sense of purpose around activities, and so gamification, if done well, is a way of taking a set of goals that the designer has, which is typically a business goal, and finding ways to align them in the minds of participants with their own goals.

JESSE: Now, just to make that real for any listeners who aren’t familiar, can you give us an example of gamification at work?

KEVIN: Yeah, it turns out that there are lots of different examples. Here’s one that we give in the book: an example at Microsoft where they have a testing group that’s responsible for testing their software and the challenge of Microsoft is that they’ve got things like Windows and Office that have hundreds of millions if not billions of users all around the world, so how do you test something that’s going to be used at this scale? One of the big challenges they have is localization; they need to test to make sure that all the dialogue boxes are right in dozens of different languages, so the idea they came up with was, instead of just relying on hiring outside localization firms (which frankly they could do across all the geographies; there just aren’t localization firms in all these countries that are able to take on a task like Windows or Office)

What they did was created a gamified environment for their own employees, so they challenged their field offices around the world to get together and go into Windows 7 (in this case) in their local language and review the dialogue boxes and try to find the errors. They made this a contest; they made it a competition among the different offices and you might think ‘why would someone voluntarily spend their time reading through dialogue boxes?’ They got 500,000 dialogue boxes read voluntarily by their employees and they found literally thousands of errors in Windows just by using that gamified system.

JESSE: So these are Microsoft’s employees who are doing a piece of work for Microsoft, but it’s outside of their normal job; they’re doing it voluntarily and they’re not doing it for any compensation or reward.

KEVIN: They’re not doing it for any tangible reward. So what Ross Smith, who’s the guy at Microsoft who runs this project who’s done a lot of great applications of gamification in the workplace, he talks about this as organizational citizenship behavior (as researchers call it). The idea is there are some core job functions you have. You’re a project manager; you’re a graphic designer; you’re a salesperson. There’s tasks you have, but then you’re part of an overall work environment; there are things that you do to promote and help along the overall enterprise that you’re part of if it’s a well -functioning work environment.

Gamification can be used in the core work elements. You think about sales contest – widely used across sales forces where people get bonuses and other kinds of tangible rewards – those are a form of gamification around the core work, but what Microsoft is doing in this example is expanding its feet there; leveraging peoples’ innate desire to be part of something bigger than themselves, to be part of a community at work. They realize that they’re getting paid and they’re serving Microsoft’s business interests, but people want to be part of a team; they want to feel like they are contributing in various ways to the overall endeavor that they’re part of at work. So this example at Microsoft – this was called the language quality game – was a very thoughtful way to leverage that innate desire that people have and to make them feel good about making the products that they’re company puts out better.

JESSE: Now you mentioned an example – Microsoft which is obviously a software technology company. Does gamification – you also mentioned video games earlier – does gamification always require technology?

KEVIN: Not at all. So it turns out that when we go back and look at examples of games and game-like things at work, they go back for literally centuries. I co-wrote a book chapter with a colleague at work in looking at gamification and the enterprise and as far back as people have been researching work – they found use of games at work to motivate people. There’s even an example in the famous book How to Win Friends and Influence People by Dale Carnegie back in the 30s that’s taught me about how Charles Schwab (who is the manager of Bethlehem Steel) would motivate workers by writing on the ground at the steel mill the output of a particular shift; he would just write the number and leave and when the next shift came in they would see that and would realize it’s a challenge that the head of the company is saying ‘can you do better than this’ and just through that feedback was able to increase production at the mills.

So a lot of these techniques don’t require technology. Technology on the other hand is a great accelerator so being able to manage these programs across large distributed work forces and having the analytics to be able to track and advance them is something technology lets us do. Gamification is a very dependent on feedback, both to the players as well as the people designing the system. Technology – online platforms – give gamification designers the opportunity to see exactly what the performance is like in the system and then to improve it, but you don’t need that in order to apply some of these techniques.

JESSE: You mention feedback as one of the things that’s very important in gamification. Is that the main reason or why is gamification so powerful as an engagement strategy?

KEVIN: It’s so powerful because it leverages deep aspects of our psychology. Every civilization that archaeologists have found had games. There’s something about the challenge; the combination of competition and cooperation; solving problems, puzzles… our brains love that. Even without tangible rewards and then games can also plug into tangible rewards. So gamification is about leveraging those psychological motivations, but doing them in a very directed way and so, again, it ties into lots of things that have been around for a while, but now that we have several decades of experience with video game design and these online platforms that can extend them more broadly… I think we’re seeing ability to really optimize around gamification.

For example, a frequent flyer program – a loyalty program – is something like gamification; it’s got points that you earn; it’s got levels; it’s got badges – these representations of your level and so forth. But hardly anyone that you would talk to would tell you that their frequent flyer program is fun. Those are just not really well designed gamified systems. Now what we can do, learning from game designers, is consciously think about how to make these things feel fun and engaging and tie them back to peoples’ interests. It’s partly the combination of understanding the creative aspects of games and again having these systems that can be very structured and analytic about the performance that is allowed us to make gamification that much more effective.

JESSE: So that’s an interesting combination of some of the fun aspects of video games, let’s say, with the data and metrics that you can gather from it both to be useful for the business but also to provide as feedback and as progress reporting for the player.

KEVIN: Absolutely. I think of gamification as a fusion of art and science, which is like a lot of things in the world today. You think about Hollywood movies today; they’re all about creativity and storytelling, but they’re also about typically very sophisticated technology on the back end. I think that’s true of a lot of things at work. You can’t – going back to our earlier conversation – you can’t think it’s just about the technology. You have to realize these are people and peoples’ interests matter and you need to be true to peoples’ desires and their sense of meaning, but you can use the technology to optimize that. You can use the technology to serve peoples’ goals more efficiently, so that to me is really the potential of gamification. It requires thoughtful application, so I’ve looked at, for example, different applications of gamification in call centers.

A perfect application where there’s large numbers of people who could do their jobs more efficiently if they were more motivated, but if you don’t think about gamification at a high level and focus on the interests of the players and focus on fun and enjoyment and meaning then you’ll probably design a system that actually makes peoples’ experience worse because people will feel like they’re always being tracked and measured and they’re being forced to compete and it’s this kind of zero sum environment.

People will, for example, just focus on getting customers off the call quicker because then they’ll get more points which will create a worse customer experience and that will actually make the system worse. So you need to think about it in those more substantive terms and design the system in a way that is rewarding to people so it actually benefits the call center agents involved and if you do that then there’s a potential to use this in a way that’s productive, both for the workers and for the goals of the business. Again, in the same work context, I’ve seen examples that are terrible failures and also great successes.

JESSE: Speaking of great success, you mentioned the story in your book of a customer service call center with live ops and how they did it well. I was surprised; I figured if they were going to implement gamification they would do exactly what you said; they would keep score on who gets customers off the phone better or who maybe has the better sales, and yet what they did is they designed that system instead where the emphasis was on learning and development and people loved it and were very engaged and it ended up improving those other metrics anyway.

KEVIN: This is an interesting example, because there are virtual call center operators, so they pulled together people including stay-at-home mothers, people who were out of work and let them be call center agents from home. So they actually have a strong interest in promoting this not just as a way to earn a few bucks, but as a way for people who don’t have access to traditional structured employment to get work and also to develop themselves and develop skills and move themselves along in their career.

They wisely saw gamification as a way to differentiate themselves because they know that they’re not going to have the same kind of scale advantages as a call center that’s got 100 or 1000 reps in one big room – especially if it’s in a low wage country – so they need to compete on quality. They’re able to do it affordable because they allow people to work at home and they use a lot of technology to do that, but they realize that gamification was actually not just a way to improve performance and efficiency, but also as a way to improve quality and improve worker moral.

JESSE: Now what circumstances can gamification be more effective than other engagement strategies? Why would you want to use gamification in place of something else or maybe alongside another strategy?

KEVIN: Typically you use it alongside other things, so gamification is not something that is mutually exclusive with any of the other engagement techniques and often it’s a way to make other engagement techniques more successful. In the book we talk about a four step process for thinking about whether gamification is right for you and the first step, which is the most central, is ‘ask whether motivation makes a difference.’ So there are lots of situations in the workplace as well as in customer-facing applications where it would be nice if people were more motivated; it would be nice if people cared more and felt more of a sense that they wanted to do more of this, but it doesn’t actually move the needle on any kind of important business metric.

Then there’s situations where that’s the differentiator; it’s really the game is all about ‘are people excited to do this; will they do it on their own and feel motivated?’ Those are the kinds of situations where gamification works really well. It fits in with all the existing techniques and, again going back to what I said before, there are plenty of technology-based gamification platforms, but there also is a lot that you can do with gamification that is just a design approach.

For example, in the massive online course that I teach about gamification, I didn’t use any of the kind of standard gamification elements like badges and points, but I did a tremendous amount behind the scenes of thinking about the course like a game; thinking about the structure of the assignments as a game. Game designers talk about the player journey which has a certain kind of path that you go through in terms of rising and falling – difficulty and so forth. I thought a lot about the structure of it to relate to different kinds of players. There’s a lot of things that you can do like that in a workplace context that are learnings you can get from studying effective game design that plug into and operate on top of any existing kind of practices you have.

JESSE: That makes a lot of sense. What are the pitfalls or limitations that we should be aware of?

KEVIN: There are several, and as I said it’s extremely important to recognize that there are pitfalls and limitations. Basically there’s a set of them that involve gamification not being effective enough and many of these fall under the rubric of what’s called pointsification which is a term that was developed by a critic of gamification. The idea is if you think that this is all about just giving people points; if you think that what we take from games is they keep score and they give you awards and you have levels and that’s what makes games fun and that’s all you do, you’re probably going to fail. The points may motivate people for a while, but ultimately people say ‘why am I doing this; why do I care about these points?’

So one danger is thinking that you can just overlay these game techniques without focusing again on how they actually relate to things that motivate people. That’s a danger of gamification being not effective. The other danger is that it’s too effective. The other danger is that you build a system that exploits people; that is focused on making people do things whether they really want to or not; whether it’s really in their interests or not. Exploiting some peoples’ tendency towards addiction and so forth; that’s a real danger. It’s not a new danger in gamification – there are lots of exploitative systems and examples in the workplace, but because this is leveraging fun; because this is leveraging peoples’ innate tendency to respond to game-like systems. I think anyone involved in this practice has a real responsibility to make sure that they are doing those in a responsible way.

JESSE: In the book you mentioned the example of that Click-a-Cow game which was actually just intended to be a joke and yet because it was a horribly designed game, it did demonstrate that there is a segment of the population that can get addicted to games, even a poorly designed one.

KEVIN: Right, no, absolutely! I don’t think that business managers should be focused on addicting people, even if there’s some short term game there, there’s lots of real downsides to it. There are a whole set of other issues that we get into when we start to think about ethics and concerns about gamification and questions about privacy. Again, there are tremendous amounts of data being collected that could be really helpful, but there’s also a significant risks about that data being used in improper ways and there are various other kinds of legal and ethical domains that that are worth thinking about. That’s why I focus on it a lot in For the Win, my book, and also in the online course that I teach. Getting people to think about these things – most of them are in line with concerns that you might have with other engagement techniques – it’s just because gamification is potentially so powerful it really calls upon us to think about those things upfront.

JESSE: What about competition? It seems like sometimes it’s good to encourage competition but sometimes that could have some unintended consequences.

KEVIN: Oh absolutely. Well one thing to say, first of all, is people make the mistake sometimes of thinking gamification and games are all about competition; that the whole point is winning. That’s a very powerful motivator, but it’s also a turn-off. First of all, there are some people who don’t respond as much to competition – even people who do sometimes don’t all the time. You don’t necessarily want to be competing in every interaction in your life and the other thing is when you set up a competitive environment, someone is going to lose. The danger is you’ll build a system that will be really engaging for the one person or one group who wins, and a total turn-off to everyone else and that’s not necessarily what you want either. So a competition is something that should be used judiciously.

It turns out that many effective games use competition as only one element. Often they combine competition with cooperation, so if you put people on a team and have the teams compete, you’re still being competitive but the real thing that motivates people – ‘what was exciting and fun about that’ – is working together with your colleagues or coworkers or friends; it’s serving a common purpose; it’s figuring things out together; it’s that sense of solidarity. So we can do gamification that has competition and not have that be the entire aspect of it and then we can do gamification without competition at all. There’s a whole domain of problem-solving, of achievement, that doesn’t really depend upon competing against anyone else – it’s really challenging yourself that’s the reward.

JESSE: Well it seems like a thoughtful approach to gamification can certainly be a powerful engagement tool in a number of different situations. Kevin Werbach, co-author of For the Win: How Game Thinking Can Revolutionize Your Business. Thank you for joining us on Engaging Leader!

KEVIN: Thanks so much Jesse, glad to be here!

JESSE: Kevin will also be joining me in episode 1 of a new podcast series that takes a deeper dive in exploring gamification as an engagement strategy. The name of that podcast series is Game Changer; it should be live in iTunes, Stitcher, and engagingleader.com the first week of May 2013. I’ll be interviewing a variety of experts in this emerging field and Kevin will kick things off in episode 1 to tell us about 6 steps to effective gamification. Don’t miss it! Kevin’s website is gamifyforthewin.com and you can follow him on Twitter @Kwerb.

In our show notes for this episode, we’ll provide Kevin’s contact information and a link to his book, For the Win. How would you like a chance to win that book? To have some fun with gamification we’re playing a game for this episode and also a bigger game for the Game Changer series, for those of you who are interested in learning more about gamification.

First, for a chance to win Kevin’s book, simply send me an email at jesse@engagingleader.com, mention the episode #38, this episode’s clue which is the letter “U” as in unicorn, and whether you’d prefer hard copy or a kindle e-book if you win.

Second, collect this clue “U” plus the clues that will be provided in each of the first 14 episodes in the Game Changer series. Using those 15 clues, if you can be the first person to guess the secret phrase, you’ll win a $100 gift card from Amazon and everyone who guesses it correctly will be honored on our Game Changer Genius Board. As soon as you think you know the secret phrase, just email it to me. Again, you can find Game Changer in iTunes, Stitcher, and engagingleader.com. If you’re interesting in more information about gamification, check out the Game Changer group on LinkedIn. We’ll automatically direct you to that LinkedIn group if you go to engagingleader.com/group.

Link to podcast episode: EL 38: How Gamification Can Revolutionize Your Business | with Kevin Werbach

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