In November, Wharton Digital Press published For the Win: How Game Thinking Can Revolutionize Your Business, by Kevin Werbach, Wharton associate professor of legal studies and business ethics, and Dan Hunter, professor of law at New York Law School. Below is an excerpt:
Think about a time when you were engrossed in a game. For some, it might have been golf; for others, chess or Scrabble; for others, FarmVille or World of Warcraft. Wouldn’t you like to feel that same sense of accomplishment and flow in your work or to feel engaged and rewarded by your consumer interactions with companies? Organizations whose employees, communities and customers are deeply engaged will outperform those that cannot engender authentic motivation. This is especially true in a world where competition is global and technology has radically lowered barriers to entry. Engagement is your competitive advantage. Game-design techniques provide your means to achieve it.
Games have been around as long as human civilization. Even videogames have a forty-year history and comprise a massive global industry that generates $70 billion per year. Hundreds of millions of people in every corner of the globe spend hundreds of billions of minutes every month playing console, PC, online and mobile games. Games are popular in every demographic, gender and age group, but they are especially pervasive among the generation now moving into the workforce.
What if you could reverse-engineer what makes games effective and graft it into a business environment? That’s the premise of an emerging business practice called gamification.
Gamification does not mean turning all business into a game, any more than innovation turns it into an R&D lab or Six Sigma turns it into a factory production line. Gamification is a powerful toolkit to apply to your existing business challenges, whatever the nature of your firm. Many of the best examples of game mechanics in business don’t even look like games to those involved. The essence of games isn’t entertainment … it’s a fusion of human nature and skillful design. The hundreds of millions of people who flock to games on their computers, consoles, mobile phones, tablets and social networks such as Facebook do so because those games were rigorously and skillfully designed, based on decades of real-world experience and research into human psychology.
Research into human motivation gathered from scholarly literature demonstrates that people will feel motivated by well-designed game features. Monetary rewards aren’t even necessary, because the game itself is the reward. Videogame players will, for example, invest enormous resources into acquiring virtual objects and achievements that have no tangible value. This is not to say that there isn’t real money involved. World of Warcraft alone brings in nearly $2 billion per year. Zynga, which makes free-to-play social games on Facebook, generated $1.1 billion in revenue and nearly $200 million in profits in 2011, just four years after it was founded, largely from monetization of virtual goods.
Gamification done right points toward a radical transformation in the conduct of business. If fun matters, it’s because people matter. People matter as autonomous agents striving for fulfillment, not as black boxes or simplistic rational profit maximizers. Even as more of life is mediated through remote networked software systems executing programmed algorithms—in fact, because of it— the mysterious factors that make life meaningful should be a central concern of leaders. As we explain in our book, For the Win, recognizing the power of what we call “game thinking” is one step on that path.