Enterprise gamificationBuzzword or business tool

September 2012

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Enterprise gamification 3

One need only look at the explosion of usage of Angry Birds and other mobile gaming applications (apps) to understand the desire to harness the power of games. Education and sales processes have been gamified for years but now gamification as a discipline is being applied to all aspects of business.

The first examples of gamification came in the form of marketing interfaces, which utilised gamification to achieve engagement with consumers. Innovative contest scenarios as well as crowd sourcing marketing campaigns and other types of marketing-based intellectual property comprised the early examples of the discipline.

All statistics point to a much broader use of gamification in the next few years, with Gartner predicting that ‘by 2015, 50% of all innovations will be gamified’.1 Gartner also predicted that more than 70% of Global 2000 organisations will have at least one ‘gamified’ application.2 Banking, telecommunications, health, sustainability, and advertising are only a few of the industries in which gamification experimentation has been tried.

Expected to grow to a US$2.8 billion market by 20163, examples of gamification are already appearing in business processes (particularly sales and human resources), education and training, team building workshops, marketing, branding, innovation games, market research and internal communications.

An increasingly common use of enterprise gamification is throughout the process of creating and facilitating innovation. The process to extract IP from a set of employees is gamified, making it into a competition with a prize. This not only drives engagement, but the competitive element also has the potential to encourage high degrees of innovation, with a side benefit of collaboration and participation. In turn, the business gets a high volume of rapidly delivered ideas and participants are stimulated by a deeply seated psychological desire to compete ‘mano a mano’.

The commercial implications of utilising enterprise gamification may include:

• Providing a more satisfying experience as compared with traditional modes of performing a task with the same or improved desired outcome.

• Potential for streamlining internal and external processes and procedures – identifying and eliminating business weaknesses.

• Establishing a solution that has buy-in from the broader team, potentially making implementation and integration easier.

• Increasing employee satisfaction and loyalty, due to engagement and recognition – prompting better productivity and performance.

• Promoting greater awareness of processes and procedures, spread organically via word of mouth due to the desire to compare one’s skills and (or) knowledge to that of others.

• Obtaining cheaper, faster and better business-orientated outcomes from any specific gamified process.

Gamification is however, not easy to master and determining the goals and measurement regimes is not simple. There are a few challenges to optimising gamification and it is quite easy to fall into the trap of poor conception and implementation of the game mechanic.

It remains to be seen how enterprises will use innovation practices in general and gamification specifically to drive business outcomes. Only a great deal of trial, error and measurement will hone the use of gamification. As Generation Y moves into decision making positions in large organisations it is likely that their experience having grown up in a technology rich, fast-moving and gamified environment will make the use of gamification increasingly integrated within the enterprise environment.

Executive summary

1 Burke,B., Gartner, ‘What’s Next: The Gamification of Everything?’, 27 January 2011: http://blogs.gartner.com/brian_burke/2011/01/27/whats-next-the-gamification-of-everything/

2 Gartner Newsroom, ’Gartner Predicts Over 70 Percent of Global 2000 Organisations Will Have at Least One Gamified Application by 2014’, 9 November 2011: http://www.gartner.com/it/page.jsp?id=1844115

3 Meloni, W., & Gruener. W., M2, ‘Gamification in 2012’, 9 May 2012: http://gamingbusinessreview.com/wp-content/uploads/2012/05/Gamification-in-2012-M2R3.pdf

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Enter gamification

4 Burke,B., Gartner, ‘What’s Next: The Gamification of Everything?’, 27 January 2011: http://blogs.gartner.com/brian_burke/2011/01/27/whats-next-the-gamification-of-everything/

5 Gartner Newsroom, ‘Gartner Predicts Over 70 Percent of Global 2000 Organisations Will Have at Least One Gamified Application by 2014’, 9 November 2011: http://www.gartner.com/it/page.jsp?id=1844115

6 Meloni, W., & Gruener. W., M2, ‘Gamification in 2012’, 9 May 2012: http://gamingbusinessreview.com/wp-content/uploads/2012/05/Gamification-in-2012-M2R3.pdf

With a smorgasbord of products and services available to consumers, there is a constant battle for awareness and attention bandwidth. With the advent of the internet and mobile computing, it has become increasingly difficult to get cut through for new and existing services which are less and less differentiated from their competitors.

Brands values are blurred online. The only way a brand has value is by being associated with utility that is provided to the consumer. Low differentiation of the product or service combined with growing brand dissonance means that businesses must find new ways to engage with consumers.

Humans are competitive by nature and being engaged in competition is exhilarating and entertaining for the majority of the population – enter gamification. Take a product or service and gamify the way it is sold, consumed and/or the processes which support its use in order to create engagement and cut through.

There are other uses for gamification though. The examples of gamified interfaces of banking products and/or games used to crowd source product innovations are the earliest examples of how gamification might also be used.

Gamification adds the utility element, in the form of a game mechanic, which is missing from the way most businesses interact. It also appeals to the base aspect of psychology, adding much needed pizzazz to un-differentiated, even mundane products, services or processes.

All statistics point to a much broader use of gamification in the next few years, with Gartner predicting that ‘by 2015, 50% of all innovations will be gamified’.4 Gartner also predict that more than 70% of Global 2000 organisations will have at least one ‘gamified’ application.5 Banking, telecommunications, health, sustainability, and advertising are only a few of the industries in which gamification experimentation has been tried.

Expected to be worth US$2.8 billion by 20166, examples of gamification are already appearing in business processes (particularly sales and human resources), education and training, team building workshops, marketing and branding, innovation games, market research and internal communications.

So what does this mean? Simply, it means creating a game mechanic or a competitive element for the way products and services are sold, consumed or created. Humans want to compete and the theory is that the act of competition will drive the number of users, engagement with the audience, sharing of knowledge and the entertainment value of the experience for any individual user. So there is no question as to why harnessing gamification would not be desirable.

Enterprise gamification 5

Learning from The Hunger GamesWar reparations as annualised tribute gameInstead of invoking fees or other punishments the society established in the popular series of novels, The Hunger Games, decided that an annual fight to the death among the rebelling districts was a method to maintain the balance of power. Although participants are usually selected through a lottery system, some districts mandate training from birth and then the best of these children volunteer to play the game.

Central to the game is its elaborate staging so that all members of the society may view them and in some way symbolically participate. The ‘honour’ of competing and desire to survive motivates the participants. The goals of the game, maintaining peace, providing tributes to the victor of the war, and reminding the districts not to make trouble, are all reinforced by playing the game. Of course, The Hunger Games is a fictional scenario but the plot does provide a great example of a deeply embedded and very sophisticated example of gamification.

The Hunger Games rules:

1. Participants are chosen via lottery from all districts which rebelled against an existing alliance. Participants are aged between 12 and 18 years of age.

2. Participants are trained for a short period in order to reach a certain level of parody.

3. Participants then fight to the death in a symbolic tribute to the winning faction.

4. The entire populous is able to view the contest.

5. Participants may be sponsored by elite members of the society. Sponsorship takes the form of support during the game.

6. Cannon shots provide feedback to all remaining participants that a player has been terminated.

7. The winner is allowed to live, is showered in riches and deified.

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Is gamification really anything new or is it just a trendy buzzword? Sales functions at almost all companies have been ‘gamified’ since inception. Getting sales people to compete against each other was and still is a way of actively driving yield. Education is also often ’gamified’ in order to create engagement, with the intention of this enabling better retention of information.

We are taught about games from a very young age and engaged by utilising them. Games are something that everyone understands; they supersede language, cultural, age and gender barriers, appealing to one and all. What then is different about the current trend of gamification?

1. The mode of expression of the game which is largely via digital interfaces enables innovation and endless possibilities that can be presented through contextually relevant scenarios.

2. As gamification is becoming more widely understood, it is now applied directly to a broader set of problems, which traditionally it would not have been.

3. Gamification is applicable to the broader enterprise as opposed to an individual problem. For example, using games to motivate an entire supply chain to work faster, competitively and provide a better experience for everyone involved in the process. (Although we have seen early examples of enterprise gamification in war gaming scenarios)

An increasingly common use of gamification is throughout the process of creating and facilitating innovation. The process to extract IP from a set of employees is gamified, making it into a competition with a prize. This not only drives engagement, but the competitive element also has the potential to encourage high degrees of innovation, with a side benefit of collaboration and participation. In turn, the business gets a high volume of rapidly delivered ideas and participants are stimulated by a deeply seated psychological desire to compete ‘mano a mano’.

Gamification will grow beyond its use in innovation as game playing, apps and video games become increasingly pervasive in our environment – in turn familiarity and comfort level with these interactions will become the norm. The question is how it can be used to grow the consumer base and participation amongst relevant audiences? This is where the comparisons with gaming modes of yesteryear end.

Buzzword or business tool?

Enterprise gamification 7

Many companies will experiment with gamification but like enterprise social applications, it will be prone to poor conception and implementation. Due to the potential results and heightened levels of engagement companies will want to gamify almost any process but this will not correct a product, service or process which does not appeal already. Gamification simply amplifies the desire to engage by appealing to behavioural and psychological propensities which already exist in human beings.

Enterprise gamification means utilising this tool for the purpose of driving overall business goals not just for engagement directly with the consumer. It starts with involving a target group in order to reach a goal. The focus of each group targeted is about driving a specific business activity. There are four key pieces to any gamified process and these include:

• conceiving the applicable game mechanic

• the ability to measure the response to the proposed gaming mechanic

• leveraging the competitive psychology and reputation associated with competing

• the incentives/prizes associated with competing successfully - which may be monetary, intellectual, marketing/loyalty-based or collaborative benefits.

Enterprise gamification may facilitate high levels of engagement with participants, driving a focused intent to compete and excel, as well as achieving these highly desirable goals at an acceptable cost to the business.

Humans derive pleasure out of competition and are driven by understanding their level of capability as it measured against others. There is always someone who is smarter, fitter or more talented. Games constrain the timetable and establish a mode of play with a set of associated rules. It is via this structure that players understand objectives, feedback is clear and understanding who wins is simple.

Games also provide an opportunity for us to learn. It is this factor that facilitates optimism and keeps people coming back in order to improve their skills with the aim of becoming ‘the winner’. This continual learning and improvement process is also highly desirable within the enterprise context.

Enterprise gamification

Enterprise gamification in actionGamifying the sales process7 Roadwarrior is a game used by SAP that is designed to assist its mobility product sales reps with learning, preparation and planning for client meetings. By offering multiple choices for the answers in what is called ‘pre-call planning’, reps can progress, unlock levels, earn badges and points for correct question and meeting preparation. Through this process they create a ‘cheat sheet’, which can be used as a resource when speaking to the client. In theory this prepares the rep to adequately answer the client’s questions. Once all meetings in one area have been completed, the next level with new customers is unlocked, allowing reps to gather cross-technology knowledge.

Reps can also challenge others, to match answers to a question. Seeing the progress of their peers and other teams, they feel competitive to top the leader board and more comfortable in customer meetings. In the end, this game fulfils three purposes: it turns learning about SAP’s mobile applications and technologies into fun, it puts sales representatives into simulated meetings with customer, and it lets the players socialise and compete with each other. Last but not least – they sell more.

Gamification for education8

The Investorville app developed by the Commonwealth Bank of Australia (CBA) encourages users to ‘invest’ in property using real data in a real-time situation. The aim of the app is to help customers ‘demystify’ property investment and, of course, to sign up for a home loan with the bank. Released in August 2011, a little more than 23,000 users had downloaded the app (as at May 2012), with 12% of that audience visiting the CBA home loans page.

Gamification for conversion9

Samsung Nation is a social loyalty game designed to grow Samsung’s user-generated content and traffic on its global website. The game let users level up, unlock badges, and gain subsequent rewards and recognition by visiting the site, reviewing products, watching videos, as well as participating in user-generated Q&As. In return Samsung saw 66% more users submitting 447% more product answers on its global website. Even more impressive, the user-generated content prompted 34% of users to put 224% more items in their shopping carts.

7 Herger, M., Enterprise-Gamification.com, ‘Roadwarrior: How SAP Trains Its Sales People on Mobility’, 12 January 2012: http://enterprise-gamification.com/index.php/en/education-a-training/71-roadwarrior-how-sap-trains-its-sales-people-on-mobility

8 Online Banking Review, ‘CommBank’s InvestorVille game has 23,000 players’, 14 May 2012: http://www.bankingreview.com.au/2012/05/commbanks-investorville-game-has-23000-players.html

9 Liyakasa, K.,CRM.com, ‘Game On: Gamification Strategies Motivate Customer and Employee Behaviors’, May 2012: http://www.destinationcrm.com/Articles/Editorial/Magazine-Features/Game-On-Gamification-Strategies-Motivate-Customer-and-Employee-Behaviors-81866.aspx

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Enterprise gamification 9

While humans do have a psychological propensity to compete they will not likely be drawn into games simply for the sake of it. The goal, the competition and the prize must all be genuine and compelling. The most important aspect of any game is the goal itself. The goal must be a real challenge and, if achieved, means glorification for the individual or team. Thus the game mechanic is the most challenging element for the conceiver of the game relative to utilising gamification within an enterprise.

It must also represent an intellectual challenge. If it patronizes the intelligence of the target audience it will most likely not achieve the desired level of engagement or provide the desired outcomes.

Another potential issue for enterprise gamification is that it draws attention to and particularly recognises the winners of any given competition. In turn, this may influence the way an enterprise selects its staffing and vendors based on these high performers, while non-participants and low performers may be chosen against; a type of social Darwinism.

When designing or gamifying enterprise products, processes or services, the following issues need to be considered:

• Will staff members engage in a completely gamified environment?

• Will the competitive atmosphere produce quality innovations?

• Will the game take precedence over the business outcome?

The answers to these questions are linked to the quality of the game, along with the depth and interpretation of the data which is derived from playing the game. It is clear that the goal of gamification at all levels is to create engagement and as a result of this reap the benefits from the intensity of the competition within a short span of time. Games by their very nature have a timetable and thus this constraint forces clarity and distillation of thought at least theoretically.

Another challenge within the enterprise setting is the company structure itself. This can and often does impede innovation and gamifying processes, thereby blocking desired results. Gamification like agile processes requires a certain mindset and structure of operation in order to take greatest advantage of the use of these tool sets.

The challenges

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10 Herger, M., Enterprise-Gamification.com, ‘Skyrocketing Employee Engagement with Innovation Management Provider ‘Venture Spirit’’, 6 August 2012: http://enterprise-gamification.com/index.php/en/innovation/103-skyrocketing-employee-engagement-with-innovation-management-provider-venture-spirit

Gamified toolsRypple – rypple.com Web-based social performance management platform, Rypple (owned by Salesforce) gamifies performance by creating a goal, measuring the outcome, providing feedback and giving a prize in the form of ‘meaningful recognition’. Rypple cites both Spotify and Facebook as customers. Designed to build a transparent, results-driven work culture, Rypple replaces the traditional performance review with an easy, social and collaborative approach.

However, successful gamification has a compelling motivation as part of its game mechanic. Rypple’s performance tool does not clearly articulate a competitive element enough to be described as a fully gamified experience.

Venture Spirit – www.venturespirit.com Online business game, Venture Spirit allows employees to fill out the roles of three types of participants: investors, entrepreneurs and talent/experts. A typical ‘game’ runs for three to four months, and employees can join the game regardless of their function or location. In a completely self-organising way employees are encouraged to collaborate and share knowledge on ideas and invest in them and find resources. At the end a ranking of ideas (or plans as they call it) is provided through the investments done by the players.10

Venture Spirit has gamification as its intent. This game specifically would need to be aimed at a group for whom innovation and investment was a motivating context.

Deskarma – deskarma.comBy introducing ‘play and games’ into processes, collaboration software Deskarma motivates users to engage to a deeper level within knowledge sharing activities, while encouraging loyalty and creating stronger desires to perform tasks to higher standards. Deskarma uses the key principles of gamification around points, levels and a sense of achievement to influence, motivate and reward users for changing their knowledge sharing behaviours. Leader boards, levels and badges are all part of the Deskarma product.

Deskarma’s desired outcome though is not about the game. The outcome is based on using information efficiently within an organisation and saving time and money relative to duplication of effort. Deskarma supports this outcome utilising some elements of gamification. It could expand its use of gamification specifically in terms of rating the quality of the knowledge that is shared. By doing this it would elevate users who provide both volume and quality.

What the Rypple, Venture Spirit and Deskarma examples illustrate is that context and mode of play are integral to engagement and the quality of the interaction with each of these tools. Within each context of use there exists a specific behaviour. In order to successfully gamify processes within each example, one must understand the specific behaviour and what will motivate a participant to perform in a manner which provides the desired outcome. This necessitates a discussion about explicit, implied or subconscious reasons for participation. A good game mechanic harnesses the most motivating of these factors and provides a scoring mechanism which provides feedback and reinforces the desired behaviour.

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Like analytics and enterprise social strategy, gamification will only be as good as the conceiver of the business rules, otherwise known as ‘the rules of play’.

We have already seen quality lose to popularity in, for example, reality TV show games like ’American Idol’. Businesses also need to be aware that politics is likely to play a role in enterprise gamification. Taking this into consideration, the design of the game will require that factors such as politics and personal agenda to be nullified in order to promote the ideas and behaviours which are most conducive to extracting the greatest amount of value from a gamified enterprise.

Another factor which has always been prevalent in games is cheating. Will the

pressure to win encourage cheating? If yes, does cheating even matter if the business outcome is achieved? In some scenarios cheating may even be encouraged because by subterfuging the process the game player actually demonstrates a certain amount of innovation. However this raises the issue of how ethics should be factored into the gamified process – something that has the potential to be especially challenging within a highly structured and regulated environment.

The below chart is adapted from Roger Caillois’s book Man, Play, and Games. From his research, Caillois determined that a game is made up of four distinct modes of play as outlined below. For the purpose of this paper, the implications for an enterprise have been added.

The ‘Simulation’ and ‘Vertigo’ game play type scenarios assist businesses to prepare for a potential future by understanding what they might need to do in order to contend with these scenarios. This approach is also promoted by Kees van der Heijden in his book Scenarios: The Art of The Strategic Conversation. A pioneer of the concepts

of ‘strategic conversations’ and the Business Idea which envelop scenario planning, Mr van der Heijden’s research at the Centre for Scenario Planning and Future Studies at the University of Strathclyde Business School, focuses on institutional strategic thinking and learning, and on processes for intervention in these areas.

Establishing rules

Table 1. Adapting Caillois’ modes of game play for enterprise gamification11

Game play type Explanation/example Application within Enterprise Gamification

Competition Competitive games: racing, athletics, boxing, billiards, checkers, chess.

Driving performance via a competition and engagement, leveraging the desire to compete and compare one’s performance to others.

Chance Games of chance: casino games, paper, scissors, rock,etc.

Understanding chance-based scenarios as they are relevant to the enterprise (eg the ‘what if’ scenario).

Simulation Games that simulate or mimic an element of the real world: World of Warcraft, Dungeons and Dragons, etc.

Simulating certain market conditions and understanding your enterprise’s ability to respond to these simulations –war games, modelling, etc.

Vertigo Games that involve some type of physical activity and movement, from: dancing, mountain climbing, surfing, or roller coasters.

Interrupting normal perceptions and replacing them with instability and understanding how to return to stability while lessening the impact of a period of instability. This approach would be specifically applicable to businesses that rely on raw materials which often change prices (eg computer processing chips).

Please Note: In all the above examples agitation decreases as concentration increases.

11 Callois, R., Man, Play, and Games, 31 August 2011, cited in Alice Robison, course materials for CMS.600 / CMS.998 Videogame Theory and Analysis, Fall 2007. MIT OpenCourseWare (http://ocw.mit.edu/), Massachusetts Institute of Technology. Downloaded on 27 August 2012.

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Selective gamification Many companies will want to use gamification in a novel way and this will drive a lot of experimentation that simply will not get traction with the desired audience.

For example, if we gamified the process to obtain this white paper, we would most likely reduce the number of people who downloaded it – which is in conflict of our goal of having people read it. Although this seems like an obvious example, it’s this understanding of how and when to use gamification that will determine the successful use of this method within your organisation.

Existing behaviour must be understood well before a game mechanic can be employed to excite a process. Many examples of gamification will be implemented regardless of behaviour. These examples will be gamified simply as a ‘me too’ exercise. This use of gamification will not provide the engagement and outcomes that well conceived examples will. So what does work?

1. Understanding the behaviour of people currently performing the task.

2. Identifying at which point in the process they would engage if a game was offered.

3. Challenging whether your game mode represents a real challenge. Perhaps testing your theory on a target audience member (eg If I offered this type of game would you want to play it?).

4. Evaluating whether the proposed game mechanic can be measured.

5. Implementing mechanisms for facilitators and players to provide feedback. You will need to consider whether the feedback is coming from someone that the players see as a professional in the context of this game.

6. Ensuring that the prize is desirable.

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So what are the commercial implications of utilising enterprise gamification?

• It provides a more satisfying experience as compared with traditional modes of performing a task with the same desired outcome.

• It has the potential to facilitate streamlined internal and external processes and procedures – identifying and eliminating business weaknesses.

• Allows establishment of a solution that has buy-in from the broader team, potentially making implementation and integration easier.

• Enables the potential to increase employee satisfaction and loyalty, due to engagement and recognition – prompting better productivity and performance.

• Promotes greater awareness of processes and procedures, spread organically via word of mouth due to the desire to compare one’s skills and knowledge to that of others.

• Offers cheaper, faster and better business-orientated outcomes from the specific gamified process.

Only by using gamification will the processes and design of game mechanics improve and become more useful to an enterprise. As with any digital application, the process of refining the use of gamification will not be passive and need to be continually improved and evolved. Understanding what metrics will be delivered via a use of gamification and how to interpret them will be crucial in optimising this tool in order to produce the desired outcomes.

Today gamification seems like a technique that would be applied to a singular goal in an enterprise but in the next decade it will likely form the basis of how businesses operate in order to position themselves in environments which increase in pace every year. It is likely that the pace of innovation and competition for consumer awareness has driven the distillation of gamification as a discipline.

In order to perform in the fast paced technology driven business environment, engagement of all stakeholders and a constrained time table are now a requirement. It is for this reason that gamification has become popular because it focuses intent, includes a mechanism for constant feedback, specifies a specific timetable in which outcomes must be delivered and it provides incentives for high performers. The rules of play benefit both the organisation and individual stakeholder.

The future of gamification will be a deeper and more personalised experience where individuals may be engaged by computerised competitors who adjust the mode of play, competitive level, feedback and prizes based on individual abilities and knowledge. The games will be embedded into enterprises and may span activities from recruitment to procurement. Procurement could take the form of a complex game where participants must demonstrate value, quality and customer service in order to meet the selection criteria for any given product or service required by an enterprise. The open procurement game would reduce the need for complex assessment scenarios, reduce the cost of procurement team, and ensure high quality at an acceptable cost for the enterprise.

How will you gamify your enterprise?

Commercialising gamification

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John RiccioNational Digital Leader+61 3 8603 4968+61 0 419 275 097john.riccio@au.pwc.com

PwC contacts

Anthony Mittelmark (Author) Director, Digital +61 3 8603 0269+61 0 438 518 618 anthony.mittelmark@au.pwc.com

Trent LundPartner, Consulting+61 2 8266 0686+61 0 434 358 373trent.lund@au.pwc.com

Edited by Nirosha Sirimanne Digital Producer, Digital

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Acknowledgements

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