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The Game of Business

Written by Bloomberg Business Week
Published: November 29, 2012

Ever watch gamers thumbing away at Fruit Ninja, World of Warcraft, or Angry Birds? They’re totally absorbed in the moment. What are they playing for? The personal satisfaction of reaching a new expert level or using a magical sword to slay imaginary monsters? Don’t scoff: The video game business is a $70 billion industry. Now imagine if you could harness that energy to get your employees and customers as engaged in your business.

The idea of making business a game is nothing new. Smart managers and marketeers have been subtly manipulating us to change how we shop and work for more than a century. (Did you really buy Cracker Jacks for the caramel-coated popcorn and nuts?) In the last few years, the concept has become popular enough to be worthy of its own buzzword—“gamification,” which, as the name suggests, refers to using video game design techniques (progressing through increasingly difficult levels or team competitions, for example) to motivate people in other aspects of life, notably anything considered work.

Kevin Werbach and Dan Hunter, professors of business and law by day and members of the Terror Nova World of Warcraft guild by night, have written For the Win: How Game Thinking Can Revolutionize Your Business, an effort to address the skeptics who dismiss gamification as the latest marketing scheme and to clear up the misconceptions surrounding the subject. As the book title suggests, Professors Werbach (Wharton School) and Hunter (New York Law School), are certain that when the hype dies down, game thinking will endure.

In an interview conducted via a series of e-mails, Werbach, 42, explains the history of games in business, shares some of the ways companies use games, and predicts how the field will evolve.

Why is gamification an important business tool and not simply another business book fad?

We live in a business world where technology and globalization have radically leveled the playing field. Motivation is the remaining differentiator. What organization wouldn’t want more engaged customers or employees? Game thinking is a method to design for motivation that fuses insights from game design, decades of research in psychology, and the new capabilities of online analytics. There are plenty of shallow implementations that will fade out, but organizations employing gamification thoughtfully are seeing measurable results.

How did you become interested in this field?

I follow emerging technology trends, especially ones the mainstream conversation doesn’t yet appreciate. Like most people under the age of 50, I grew up playing video games. Over the past few years, I’ve watched as they became not only a $70 billion global industry, but also an amazing petri dish for online innovation. Most experts ignored the rich social interactions and business models developing around games, because they didn’t take them seriously. (I had the same experience with the Internet in the mid-1990s.) When gamification coalesced as a concept 2-3 years ago, I saw it as the fusion of everything that excites me about games with everything I study as a business professor.

Games have been around for centuries. What are some of the earliest examples of games in business, and how have they evolved?

Dale Carnegie’s classic How to Win Friends and Influence People relates an anecdote about Charles Schwab, the head of Bethlehem Steel in the early 20th century. He wrote a number representing one shift’s daily output on the floor of a steel mill, implicitly challenging the next shift to beat it. The resulting healthy competition dramatically increased output. Schwab understood how feedback and competition could motivate performance, concepts we see in gamification today. Games also have a long history in marketing. It was exactly a century ago that Cracker Jack started putting toy surprises in every box of its snacks.

The difference today is that we can incorporate game elements and game design directly into business processes, because so much is built on digital platforms. And we can make those systems more responsive, social, and scalable than ever before, in the same ways the Internet and social media are changing business more generally.

Are there companies that stand out as particularly effective gamers, others not so much?

I admire the creative examples that tie well into corporate culture, such as the “Face Game” that helps employees at online retailer Zappos (AMZN) get to know each other, or the crowdsourced system for localization testing at Microsoft (MSFT). I’m less impressed with cookie-cutter PBL (points, badges, and leaderboards) systems, like Samsung Nation, even though they may increase engagement levels on a website. Those are less likely to produce sustained benefits that translate to the bottom line.

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