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The Gamification Revolution: How Leaders Leverage Game Mechanics to Crush the Competition

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The Gamification Revolution: How Leaders Leverage Game Mechanics to Crush the Competition

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Highlights & Notes

This concept is called gamification—that is, implementing design concepts from games, loyalty programs, and behavioral economics to drive user engagement

Gamification is the process of engaging audiences by leveraging the best of loyalty programs, game design, and behavioral economics.

  1. The world will not return to the calm, focused ways of the past. Employee and customer multitasking is here to stay. 2. Engagement is the most valuable resource your employees and customers have to give. Your success or failure will be based on how much of it you get. 3. The best way to beat the competition is to make your employee and customer experience as fun and engaging as possible.

Welcome to the Revolution. It will be gamified.

But beyond the crowning of a winner, the real success of grand challenge designs lies in their process and ancillary benefits: Discovery. Grand challenges solicit results from unexpected corners, including nonscientists and nonacademics, which raises the odds of obtaining truly novel approaches. Optionality. A grand challenge delivers dozens of solutions at no incremental cost. By comparison, structured research typically requires funding for each possible solution path. Cost arbitrage. Because the winners also usually receive major status and attention for having achieved public success, we don’t need to pay them as much as we would under other circumstances.

The best way to win in this challenge is to take the best elements of games, loyalty programs, and behavioral economics and weave them together with the most powerful elements of your brand.

Mastery is different from winning—although it’s easy to confuse the two. Winning is really about achieving a goal, while mastery is about acquiring knowledge and demonstrating control and doing so in a steady and consistent progression. Put another way, mastery is a continuous improvement process, whereas winning is a destination.

In order to bring progression to mastery into your organization in a meaningful way, you need to design the key mechanics: A goal Markers toward the goal (for example, levels) Constant reinforcement of progress (points, typically) Social reinforcement Logical progression of difficulty Side challenges and different experiences to hold interest

To move users from a progression to mastery, you need to construct a gamified system that moves them through these six steps.

Gamified design leverages the best of game design, loyalty program design, and behavioral economics to solve critical problems and drive engagement.

Points are systems used to track behavior, keep score, and provide feedback.

Badges are tokens that represent the achievement of a particular goal. Within game design, they are part of the generic category “achievements,” along with trophies and other symbols of accomplishment. Badges have always been a popular part of gamification—even before modern technology—with the military, the Girl Scouts, and other organizations making heavy use of the concept. What makes all kinds of achievements compelling is that earning them gives the user an opportunity to feel successful and accomplished, which generates a touch point for the gamified system to communicate with the users, bringing them back into the experience.

Levels are structured hierarchies of progress, usually represented by ascending numbers or values (for example, bronze, silver, and gold). Levels exist to provide users with a sense of progress and accomplishment, acting as a shorthand for the points achieved in a given system (for example, bachelor’s, master’s, and doctorate degrees).

Clearly, levels and badges have a great deal of overlap, and many systems that leverage badges don’t necessarily incorporate levels, and vice versa. However, they are powerful tools that are especially useful when designing a system with a great deal of intrinsic structure, like workplace hierarchies.

Rewards One of the most important elements of a gamified system—and certainly the one that gets a lot of attention—is rewards. Broadly speaking, rewards can be categorized into intrinsic versus extrinsic—that is, self-generated versus externally delivered. The goal of a good gamified system is to offer a set of rewards that activates the users’ intrinsic desires, while leveraging external incentives and pressure where appropriate. The clearest model for understanding these elements of reward programs is described in the acronym SAPS: Status. Utilizing such tools as titles and color-coded levels Access. Providing exclusive opportunities to engage, like lunch with the CEO or celebrity autographs Power. Exercising control over others in the real or virtual world—a team leader, for example Stuff. Offering free things including giveaways, cash, or gift cards

  1. A commitment to fostering engagement as the key to success 2. A belief that lasting engagement takes both time and effort to maintain 3. An understanding that engagement precedes—not follows—customer revenue 4. The view that your employees are also customers of your company (its brand, demands, and so on)

As always, there are some recurring patterns within those examples of companies that have succeeded with a gamification strategy. These patterns include the following: Orienting around the user Hiring a chief engagement officer Giving users what they want Making engagement the number one job Knowing when the game is the thing Creating a center of excellence and innovation Let’s examine these concepts in greater depth.

experiment internally, and then turn that gamification into a product or experience for customers.

Game theory is “the study of mathematical models of conflict and cooperation between rational decision makers.”

The gamification of strategy promises such opportunities as these: Understanding the end game Modeling scenarios Creating engagement Raising intelligence

Amazon.com, Apple, and Google are ranked three of the top five companies where young people most want to work according to Universum, an employer branding firm. Perhaps not at all coincidentally, all three boast strong employee reward programs.

As you’ll see below, the secrets of delivering maximum achievement in your organization are based on three primary drivers called the three Fs: feedback, friends, and fun. Organizations that can deliver those in the workplace can and will drive improved performance.

Feedback is the act of telling users how they are progressing over time. Friends are the connectors between users, whether they are friends in the classical sense or not. Fun is fairly unique to each individual, but generally it is a sense of amusement or enjoyment. When working together, these three drivers form the core of a viral engagement loop designed to propel users to visit an experience, return, and then also engage others to visit and return.

The right approach is to create multiple tracks of significant meaning with disparate and clearly articulated levels. This strategy allows employees to compete linearly on a specific track and/or to switch tracks and try out the experience in another area. While technology companies have long done this by encouraging employees to switch between technical and business tracks, the same thinking can be applied to any discipline.

letting them know that scoring below that number could result in additional training, demotion, or even job loss. Scoring above, of course, would open advancement opportunities. But what happened next surprised everyone: not only did Target’s checkout lines move faster than ever, but its cashiers reported an increase in satisfaction with their job experiences. The monotony and boredom often associated with the checkout experience suddenly had an injection of … fun. Employees themselves took personal pride in achieving a high score and, better still, beating it.

After all, if you want employees to do their best, they need to know what they are doing well (as well as what they are not doing well). Even more important, research shows that the sooner you give feedback after a “correctable” event, the better.

It bears repeating that the opt-in (as opposed to forced) nature of these systems, along with the ability to match a series of virtual rewards to the company’s values, will ultimately lead to their adoption and use. In contrast, if gamified performance improvement is required, it will more than likely fall into the same trap as most other IT systems.

If you can tailor the solution to the problem, gamification will provide a unique opportunity to drive key performance metrics inside organizations of all sizes. Beyond driving performance, gamification can also increase employee satisfaction, recruitment efficacy, and—perhaps most important—innovation.

The Problem with Cash Cash rewards often negatively distort user behavior, and ultimately they make the game more difficult. Over time, players will simply consider it their rightful due (consider how everyone feels about a paycheck). Thus the cash reward must be constantly increased in order to drive the same behavior. Over time, costs to maintain the game will be driven up while user satisfaction plummets. Cash isn’t the strong motivator over the long term that you might expect. Behavior experts from Abraham Maslow (the famed psychologist) to Daniel Pink (author of Drive) have repeatedly emphasized the need for noncash rewards in order to maintain momentum and engagement. Delivering noncash prizes such as status, access, and power will extend the life of your game, save you money, and drive better results.

feedback loop is a system by which users’ output yields feedback that in turn loops them back in to uncover the nature of the feedback. On completion of a feedback loop, users can then incorporate this input into their next decision, making it easier to move forward. Social networking has made feedback loops something

Even more critically, and especially within the culture of a large organization, the main form of positive feedback was that the company was listening. Periodically, users would receive reports that showed how the bugs they found were being fixed. This sense that their contribution was ultimately worthwhile and having a positive effect on the organization was a key motivating factor in success.

training as continuous recreation.

But while it might be difficult to earn status readily in the real world, there is one place where gaining status is within everyone’s grasp—and that’s in the world of games.

FIGURE 7.1 In the dopamine release loop, dopamine is released when people challenge themselves to something and then achieve that objective. This causes pleasure and a desire to do the loop again.

to improve employee health and wellness increase challenges to also potentially increase eustress, and thereby improve job satisfaction and performance.

The key lesson: gamification is a process, not a product—and it requires long-term care and feeding. If you have a great gamified experience that consumers love and are using, don’t turn away from it. Lean into it. That’s the best way to ensure usage, revenue, and engagement in the long term.

The six keys are these: Incorporate surprise and delight. Gamify your brand. Make it fun. Attract friends of friends to your brand. Be social to the core. Have a story—and tell it.

low-priority, low-intention action. In summary, spam. But there is another way. Pioneered by games like Cafe World, a restaurant-owning game on Facebook, new models have emerged that put social requests directly in the line of game play. In other words, getting people to play the game is part of the game. For example, when players need to progress to the next level in Cafe World, they are prompted to recruit friends to play. If their friends accept, the players receive virtual currency or other items that are necessary to progress.

Progression, which is a key element in an overall sense of happiness and mastery, is gated by this social interaction. The recipient of the request—typically a friend—is clued into the fact that the achievement of the player is gated by their action or inaction. Thus, social pressure successfully leads to recruiting other players, which translates into incrementally increasing numbers of users and revenue for the experience.

strategies that successful organizations have used to build lasting engagement through gamification: Define a grind. Build a powerful engagement loop. Keep content fresh. Use meaningful incentives. Make it personal, and design it for mastery. Create continuous learning opportunities. Monetize loyalty.

In game terms, a grind is a simple activity that users must regularly repeat in order to earn enough resources to progress in the game. Typically, the grind is a simple activity (or set of activities) that can be accomplished fairly mindlessly over and over again. Doing it yields a unit of currency that—when done enough—can be used to advance more substantially in a game.

In the workaday world, something like punching your time clock, answering customer support calls, or holding your weekly standing meeting might qualify as grinds.

Once you become accustomed to doing the behavior, it becomes second nature. As a habit-forming minibehavior, a grind forms the foundation of most gamified systems. The trick is to identify, highlight, and drive grinding behavior in gamified experiences to maximize usage as well as the outcome of that usage.

Specifically, you need to consider what drives their behavior, design a hook that brings them into your product, and then allow them to express a social action, which you respond to with a trigger to bring them back.

The cycle is composed of four elements: a motivating emotion, a social call to action, user re-engagement, and visible progress and rewards.

The key element to remember is that for users to return every hour or day or week or month, new, surprising, and interesting activities and interactions must be regularly available. Fresh content alone isn’t enough. Consider how most engagement systems—like loyalty programs—deal with introducing new mechanics.

Both physical and virtual rewards need to activate an emotional need for gratification in addition to—and sometimes instead of—the need for cash-value prizes.

That sense of progress and mastery is considered by many theorists to be central to what makes gamified experiences—and indeed, life—fun. The conceit is that we all have a desire to achieve mastery over various areas of our life, and systems that allow us to do that will be perceived as fun or particularly meaningful. Additionally, the more the system can show us the progress we’ve made along the track to our goal, the more likely we are to stick to it.

In this chapter we’ll look at a few different approaches to leveraging the power of the crowd through the lens of how gamification accomplishes or provides the following: Changes in behavior Reductions in costs and improvements in quality Inspiration for innovation and ideation Inspiration for new product development

identified seven kinds of motivation that drive crowdsourced behavior, including cash, points, leaderboards, badges, reputation, community, and collaboration.

you can get people to do extraordinary things together—often economically irrational things—if you provide the right feedback, friends, and fun. You need not offer cash rewards, as long as people are getting the right psychological benefits (reputation, connection, contribution) from their participation.

The lesson: the more “noncash” opportunities you can provide (job, fame, recognition, and so on), the more likely people are to trade down in terms of economic value to be the winner of your challenge.

As companies realize that they can realistically use the crowd to solve customer service issues, drive innovation, do on-the-ground work, and even design and build new products, the possibilities are endless.

The kids of today are changing the world of tomorrow. Over the last five years major strides have been made in curing cancer and solving the world’s environmental crisis, all by teenagers competing in high school science fairs.

  1. Gamification is the language of this new generation. 2. The benefits of gamification apply equally well to older stakeholders. 3. Gamification delivers affordable, measurable, and scalable behavior change.

Further, employees who feel purposeful and connected to their work—getting feedback, working with their friends, and having fun—work harder, longer, and better.

By making fitness programs part of the workplace, employers have activated collaboration and competition in ways that drive culture, morale, and cohesion.

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