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Enterprise Games

Using Game Mechanics to Build a

Better Business

Michael Hugos

Beijing ·  Cambridge ·  Farnham ·  Köln ·  Sebastopol · Tokyo

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Enterprise Games

by Michael Hugos

Copyright © 2012 Center for Systems Innovation. All rights reserved.

Printed in the United States of America.

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ISBN: 978-1-449-31956-4

[LSI]

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To my wife, Venetia.

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v

Contents

Preface | vii

1 | Transformation of the Great Game of Business 1

2 | Feedback in the Real-Time Economy (Why Games

Matter) 11

3 | Feedback Systems Drive Business Agility 23

4 | New Paradigms and Operating Principles 37

5 | Gamification 47

6 | A Continuum of Functionality: Simulations to Serious

Games 63

7 | Massively Multiplayer Online Games and Real-Time

Collaboration 79

8 | Driving the Great Game of Sales 93

9 | Game Mechanics in Products, Services, and User

Interfaces 105

10 | Environments of Decision 117

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iv | contents

11 | A Novel Encounter with Big Data 129

12 | Game Layer on Top of the World 147

13 | Games for Change 163

14 | The Future of Work 175

Index | 193

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vii

Preface

We are living in a time of big changes. We face changes driven by

powerful forces like world population growth; rising prices for food, fuel,

and raw materials; depletion of natural resources; and increasing levels of

greenhouse gases in the atmosphere. And at the very same time, we are

also surrounded by the rapid spread of new technologies such as social

media, mobile consumer devices like smartphones and tablet computers,

and cloud computing and software apps. Clearly, the path forward involves

finding ways to use the potentials of the latter to address the challenges

of the former.

The magnitude of the challenges we face now is unlike anything we

have experienced since the early years of the last century. At that time a

hundred years ago, work and society were transformed by the spread of

industrial technology and the resulting mass migration of people from

farms and small towns to factories and big cities.

The first decades of the last century saw a transition from the practices

of an earlier age—the Victorian Age—to the practices of a new age—the

Industrial Age. In the countries where industrial activity was concentrated,

there was conflict between those who paid wages and those who earned

wages, and yet ultimately, that conflict was channeled in socially construc￾tive ways that resulted in the growth of a large middle class sustained

by lifetime employment in companies offering jobs with career paths,

benefits, and pensions. This economic model of employment became a

worldwide standard during the last half of the twentieth century.

Challenges and Opportunities

Now, industrial activity has spread around the world. And we see tradi￾tional practices that once sustained the middle class are disappearing in

countries everywhere, and conflict between wage payers and wage earn￾ers is returning. High rates of change in technology and volatility in the

prices of everything from basic commodities to finished products make it

hard for companies to predict demand for their products, and even harder

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viii | Enterprise Games

for them to create long-term business plans. A major result of this is the

fluid nature of employment these days.

People are employed one month and unemployed the next, and it is

usually for reasons beyond their control that have little to do with their

personal performance. Companies hire and fire as needed to respond to

market volatility and rapid rates of change. Twentieth-century traditions

of lifetime employment and jobs with career paths, benefits, and pensions

are harder and harder to maintain.

The personal and economic stress and dislocation this causes makes

us yearn to revive or reinvigorate business practices from the last century

so as to recapture the stability and benefits they once provided. But that

yearning will go unrequited because those practices no longer fit the reali￾ties of our real-time, global economy.

Games and the associated technology we currently refer to as video

games offer us more than just diversion and escape from difficult times.

They offer us field-tested models to use for organizing companies and

performing complex and creative tasks. They offer clear and compelling

examples for how people can work together, build their careers, and earn a

living in rapidly changing and unpredictable environments.

The very notion that games could have anything in common with

work will trigger some to reject these ideas out of hand. For the rest, this

book offers a set of grounding concepts, case studies, and a big-picture

view of the use of games and game-like operating models in business. As

one person who helped me with this book said, “There is a huge game￾shaped opportunity in modern business practices.”

Audience for This Book

This book is written for people who are interested in exploring the use of

games to address the challenges we face. It is written to be accessible to

a broad base of readers from business, professional, and technical back￾grounds. It is written for change-minded business executives, and for

people who advise them and deliver new ideas and services to them. It is

written for people who design games and are curious about new opportu￾nities that arise from the merging of games and business, and for people

whose work is already taking on a game-like quality and who want further

insight into what is happening.

Footnotes and references are provided for readers who wish to explore

in more detail the particular technologies, methodologies, and business

practices that are presented. This is not a book that concentrates on any

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Preface  | ix

one game topic such as the practice currently known as “gamification.”

Nor is this a prescriptive cookbook that lays out a predefined set of steps

for applying a specific game technique to a particular business situation.

My intent is to arm and inspire those who are in a position to influ￾ence or change the way businesses and organizations operate. I draw on

my own experience as well as on the writings and experiences of others

in business and game design in order to present real-world examples of

the merging of games and business. These examples outline salient fea￾tures of an operating model for companies and economies that can deliver

broad-based and sustainable prosperity. I hope this sparks your own cre￾ativity. I hope you build on the examples and concepts presented here as

you experiment with them in your own company and your own career.

Structure of This Book

The book is loosely divided into three parts. The first part, Chapters 1–4,

presents the challenges and opportunities for redesigning work to fit the

realities of our real-time economy. It puts forth ideas and case studies to

illustrate how games can provide operating models to follow for redesign￾ing work.

The second part consists of Chapters 5–9, and is a discussion of

games and game mechanics that are relevant to rethinking the way work

is done. This part provides specific examples, pictures, and case studies to

show how game techniques and technologies can be applied to the design

of new business systems and workflows.

The third and last part, Chapters 10–14, describes business and social

impacts of combining technology from video games with in-house corpo￾rate systems and the rapidly spreading technologies that make up social

media, consumer technology, and cloud computing. The book concludes

with a discussion about where this is all going and what it might mean for

the future of work.

I welcome hearing from you with thoughts, comments, and questions.

You can contact me via email at [email protected] or visit my website at

www.MichaelHugos.com.

Michael Hugos

Center for Systems Innovation [c4si]

Chicago, Illinois

August 2012

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x | Enterprise Games

Acknowledgments

Thank you to the game designers and developers who have so expanded

the state of the art over the last 25 years and more. They brought the design

and the technology of video games, social games, massively multiplayer

games, and alternate reality games to their present state of sophistication.

They keep pushing the envelope.

Thank you to the thinkers and visionaries who have practiced, writ￾ten, and spoken about the techniques and potentials of games. I have

read the works of many of them and spoken in person with some of

them. Throughout this book, I footnote relevant works and comments of

people who influenced me in formulating my ideas and writing this book.

Interested readers owe it to themselves to follow up on these footnotes and

learn more about these people and their work.

Thank you to the reviewers of this book, who helped me clarify my

message and who pointed out errors in my original manuscript and of￾fered suggestions for improvement.

Thank you to the editors and staff at O’Reilly Media, who gave me

the opportunity to write this book and who worked with me to focus and

refine the material presented here.

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Preface  | xi

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1

| 1

Transformation of the

Great Game of Business

Using games and game mechanics might be as powerful a model for

organizing knowledge and creative work as the assembly line was for orga￾nizing industrial and repetitive work.

Because we have been taught that play is the opposite of work and

that a game is the opposite of a job, we believe that play and games are

frivolous. Thus, many of us instinctively reject the idea that games or play

can be part of that serious activity we call work. But maybe we should

think again.

We all have a sense of what a game is. Regardless of whether we are

talking about sports games or card games or board games or video games,

we can see they all share a core set of traits in common. Games are skills

based, results oriented, and structured by rules. Games have been de￾scribed as having four defining traits: a goal, rules, a feedback system, and

voluntary participation.

1

The goal of a game defines what the game is about, its purpose. Rules

place limitations on how the players can accomplish the goal, and they

channel the activities of the players into directions that are supportive of

the game. Rules are what make the game work. A feedback system is what

keeps the players constantly informed on how well they are doing and

their progress toward accomplishment of the goal. Voluntary participation

means that people in the game understand and willingly accept the goal,

the rules, and the feedback system. This willing acceptance creates the

common ground that unites all the players in a game and makes it pos￾sible for them to play or work together.

1 Jane McGonigal, Reality is Broken: Why Games Make Us Better and How They Can

Change the World (New York: The Penguin Press, 2011), 21. Watch a video of a talk she

gave titled “Gaming Can Make a Better World” at http://www.ted.com/talks/jane_

mcgonigal_gaming_can_make_a_better_world.html.

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