Why gamification is bad for social business

Many believe that introducing gamification to social business systems can and will drive behavior change inside of organizations. Introducing these components will certainly cause many people to act differently, but will the changes be the desired changes, or will they actually make things worse?

Let’s start by understanding what gamification is. Gamification.org defines gamification as the concept of applying game-design thinking to non-game applications to make them more fun and engaging. This translates that if you perform some pre-determined/desired task in a prescribed way that you will get a reward. This could be as simple as completing an on-line profile or be much more complicated requiring many steps to be completed. Usually the reward increases as the task complexity or difficulty increases.

Creatures of habit

When you start a new job, there are many new things to learn. At the beginning, this can be overwhelming as we try to learn all the things we need to do to be successful. In brain terms, this means that your cerebral cortex gets a lot of exercise as it tries to comprehend how things need to be done. Our cerebral cortex is a very limited resource that requires a lot of energy, so the brain shifts routine tasks to other parts of the brain so that it can focus on new things. After doing a prescribed task a few times, the task shifts to the basal ganglia where it becomes a habit. (This is a highly simplified version of the process).

In The Power of Habit: Why we do what we do in live and business by Charles Duhigg the author breaks down habits into three components:

Cue -> Routine -> Reward

The cue is what causes us to take action. This could be a new e-mail in your inbox, a call from a customer for example.

The routine is the action we perform. We read the e-mail, pick up the phone, etc.

The reward is benefit that results from performing the routine. We check off a task on our list, get a new sales opportunity. These rewards trigger a release of dopamine, which is responsible for reward driven learning.

The more often you do the routine task, the deeper the habit gets ingrained in our basal ganglia. It’s because of this that changing habits is difficult. The author goes on to describe that by recognizing the queues that you can change the routine and still get the reward.

Tying it together

If we bring gamification back in, it interacts in the habit loop in two ways:

  1. It encourages a routine to be done in a specific way to be rewarded.
  2. It encourages you to do new things in order to get new rewards that you haven’t experienced before.

Gamification ties directly to the habit loop. This all works very well as described until you bring in another component to the equation: Incentives.

We are all incented to work. At the most basic level, you work so that you earn money to provide food and shelter. The habit loop in this case is to define objectives, achieve the objectives, get a paycheck/raise/bonus/promotion. So what happens if we use gamification as an incentive?

The Cobra Effect

A recent Freakonomics podcast called The Cobra Effect did a great job of describing what happens when you introduce incentives to solve a problem.

Vikas Mehrotra describes the cobra effect:

So the “cobra effect” refers to a scheme in colonial India where the British governor, or whoever, the person in charge in Delhi, wanted to rid Delhi of cobras. Apparently in his opinion there were too many cobras in Delhi. So he had the bounty placed on cobras. And he expected this would solve the problem. But the population in Delhi, at least some of it, responded by farming cobras. And all of a sudden the administration was getting too many cobra skins. And they decided the scheme wasn’t as smart as initially it appeared and they rescinded the scheme. But by then the cobra farmers had this little population of cobras to deal with. And what do you do if there’s no market? You just release them. And so this significantly, by a few orders of magnitude, worsened the cobra menace in Delhi.

The episode goes on to describe many incentive schemes that ended in similar fashion. All of them relate to how clever people “gamed” the system for personal gain without solving the problem and in some cases making the problem worse.

Back to business

If we bring this back to the context of employees and how people are rewarded, we begin to see how gamification and incentives can have an undesirable impact on a company’s performance and even hurt the company culture.

It is almost inevitable that someone will want to measure and evaluate employee performance based on their rewards when deciding who to give a raise, who gets a bigger bonus or who to promote. Whether this is done formally through some Human Resources process or informally because the decision maker doesn’t have enough information to make the decision objectively and is looking for something to aid them. Once this happens, people will figure it out. Once they figure it out, this will become widely known throughout the organization through socialization. If it’s even remotely suspected that people achieved reward by gaming the system, it will create a divide inside of a company that is difficult to repair.

Let’s take collaboration for example. Many social business tools award points for performing various activities inside their platform. It’s not hard to then correlate (often incorrectly) that the people with the highest scores are the most collaborative. But, without context of solving business problems, it’s feasible for a person to get a high score by being active in a group that may be non-work related, or even just making noise by inserting their thoughts as a way to gain more points without providing value.

At one of my previous companies, there was one resourceful person who understood the theory of this and wrote an e-mail bot that contributed to a private group that he set up. After only a few days, his score for the system was higher than everyone else’s. In this particular instance, we were just starting off, and we were focused on this particular metric, but imagine what could happen where there are many gaming elements where it’s not so easy to spot someone who is gaming the system.

Summary

Gamification can be valuable, but also can be dangerous. A full understanding of what you are trying to accomplish is necessary and a critical analysis of the potential impacts must be performed before implementing these systems. As tempting as it may be to measure people by these rewards, as history has shown, the impacts of doing so will almost always lead to unexpected consequences. If you want to experiment with gamification, I would recommend you limit it to things that do not tie to incentives and actively dissuade people from using this to incent people.

 

Further reading

The Science and Psychology of Gamification

Your Brain at work by David Rock

Greg Lowe

Greg constructively challenges the status quo to achieve real change in organizations. With a background in IT, communications and collaboration, Greg is passionate about making technology usable to make people’s jobs easier and changing the way companies do business. He does this by demonstrating value through building business cases and leading organizations to develop and support new behaviors, by working with leadership to help them understand how and why to leverage social business systems within their enterprise to achieve better business outcomes. He also writes and speaks about strategies and tactics that can be employed by companies to drive success in the Social Business space.

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22 thoughts on “Why gamification is bad for social business

  1. Marie Wallace

    Nice article Greg, and I would second your word of caution. Some time ago I wrote a post also advising caution, however I was specifically looking at approaches that focus on gamification as a way to incentivize social business adoption. Whereas in my perspective the only reliable way of doing that is to actually embed social directly into business applications, so the value is immediate and measurable within the existing business KPIs. I just worry that these incentives may end up being a bit contrived and at odds with the business.

    [allthingsanalytics.com/2012/06/17/social-adoption-in-the-enterprise-make-every-click-count/]

    Reply
  2. Christoph Schmaltz

    Hey Greg, thank you for this article. I think we agree on the main message that poor gamification tactics lead to poor business results. That was the case even in the days when no one even talked about gamification. Take the KM 1.0 era. Organisations implemented a database-driven KM system. To incentivise people to ‘contribute’ their knowledge, rewards were given out. This led to people gaming the system but also asking for ever more pricy rewards. In the end, the system was not sustainable. It looks like some organisations haven’t learned from this experience and are applying the same old tactics to shiny new tools.

    The problem is that most tactics reward the wrong behaviour. Most tactics try to increase ‘user adoption’ defined as activity on a collaboration platform or enterprise social network. The more activity the higher you are up in the leaderboard or the bigger the badge you earn. If it was that easy, why don’t we have leaderboards or badges to reward people who send most emails? :)

    Conclusion: Too often gamification is used to influence project metrics (activity, number of active users etc) and not business metrics. That’s where it all falls short. I have written about this topic before: http://www.tibbr.com/blog/topics/adoption/influencing-human-behaviour-to-increase-enterprise-social-networking-adoption/

    Whilst I agree with the premise of your post, I do take issue with a couple of things:

    1) Game theory is definitely not the same as gamification, as stated in your very first sentence.
    2) You seem to reduce gamification to points, badges, leaderboards. This would be too simplistic.
    3) Your title is misleading and in my eyes more a link bait than anything else, especially because you seem to contradict yourself in the end. In your summary you do say that “gamification can be valuable”, so it is actually not as black-and-white as you suggest in your title.

    Reply
    1. Greg Lowe Post author

      Christoph,
      First, thanks for the feedback. I appreciate your view and feel that some clarification is necessary. First, you are correct, I made an error and have since removed “Game theory” from the first sentence.

      Now, I’d like to dig perhaps a little deeper. On your 2nd point, you seem to think that I am reducing gamification to “points, badges and leaderboards”. The fact is that I’m not. I believe that the accomplishing business goals is the big picture, but as long as points, badges and leaderboards exist that people will use them improperly to make business decisions that could impact culture. This is not unprecedented as I’ve personally seen “Executive Dashboards” that were used to make business decisions that didn’t represent the “true” state of the projects, etc.

      Finally, on your last point I think that it’s important to realize that what ‘can be’ doesn’t necessarily mean ‘will be’. What I am saying is that even with the best intentions, the fact that points, badges and leaderboards are part of gamification that the ignorant will reward the wrong behaviors and that these actions will create a big mistrust within an organization. While I do believe there is value in gamification, I don’t think it’s possible to implement without people acting on these numbers incorrectly. That is why I still believe that gamification is bad for social business, despite the possible value and benefits.

      Reply
  3. Caroline Dangson

    Greg, I agree with your statement, “Gamification can be valuable, but also can be dangerous.” Gamification is dangerous when it changes the context of the experience. It all depends on how game mechanics are applied. Gamification as defined here focuses on extrinsic motivations. Tapping into the intrinsic motivations for behaviors are extremely powerful. In my role, I think of rewards as a visualization of progress / growth. Think of rewards as immediate feedback on achieving an objective. I’ll refer to a blog post by Tony Ventrice – http://blog.badgeville.com/2012/06/11/are-extrinsic-rewards-dangerous/

    Reply
    1. Greg Lowe Post author

      Caroline, Thanks for your comment. I really enjoyed that blog post and I agree in principal for intrinsic vs. extrinsic motivators. There’s another context that I think is missing from the equation around motivation. My experience (no data to support) suggests that gamification won’t motivate many employees. They are far too busy to even participate. While I’m not saying that they won’t, I do wonder how a culture would respond if only 50% of the population bought into the principal.

      Since you work for Badgeville, I’d be interested to hear about how Badgeville levels the playing field and avoids the pitfalls of people making business decisions based on the data you provide your customers.

      Reply
  4. Dan Keldsen

    Greg – Ah, so much to talk about with gamification, and with it’s own amount of controversy associated with the name, the concepts, etc.. You modern day Dvorak, you! ;)

    Great back and forth in the comments here, great to see.

    As Christoph mentioned, gamification, and specifically the “rewards” aspect can be very dangerous, and turn negative quickly – although that doesn’t make gamification bad – it just makes poorly implemented gamification… bad. Or in gamer language a #FAIL.

    Christoph – interesting that you mentioned KM 1.0 as an example there – see below, where I reference an interview with Stan Garfield at HP 5 years ago – arguably KM 1.0 days (timewise), but very modern approach that sidestepped those issues.

    Systems like gamification need both positive and negative feedback loops to keep things in balance – and like any good community or collaboration effort, needs to be constantly tweaked to adjust for any people looking to hack the system to be purely self-serving.

    I have an interview with Rajat from Bunchball coming out tomorrow – we cover a lot of ground in that interview about these sorts of issues, and another interview coming out next week, with Professor Kevin Werbach from Wharton/Penn, who’s new book “For the Win” is about gamification for social business (market-facing and internally-facing).

    I completely agree that poor gamification can be cripplingly destructive to social business efforts.

    But… the magnification effect of gamification done well, and the sustainability of getting people onboarded and actively using a social business environment (and ultimately, mindset), has far more potential upside to it.

    That, to me… is well worth making a focused attempt at using gamification as an engagement technique.

    Over 5 years ago, an interview I did with Stan Garfield, the former Director of Knowledge Management for HP (he’s now at Deloitte – similar role), talks about these very same issues – in the “good ol’ days” when it was about incentives and responsibilities, the value of knowledge re-use vs. re-inventing existing knowledge.

    People interested in that conversation, can find it at:
    http://www.biztechtalk.com/2007/05/reinvention_pre.html

    That was a great conversation – and HP’s tagline at the time was “Invent” – which as you may suspect, some people took FAR too literally, at great cost to the company. Really interesting how they were able to embrace invention, while keeping people from shooting themselves and others in the foot.

    And our mutual colleague, Robert Lavigne, interviewed me a few weeks ago on collaboration and into gamification with a 42+1 Live conversation. The gamification aspect of that discussion happens towards the end of the interview, here:
    http://www.youtube.com/watch?v=Js_qXhqy8I0

    The sense of progress, bite-sized goals/tasks, etc. that Caroline mentions, are the more important aspects of gamification to me, versus points, badges and leaderboards (PBLs as Kevin Werbach calls them).

    The “competitive” aspects of PBLs can disengaging to some “players” – who are driven not by competition (for money, attention, etc.), but by collaboration and cooperation – and THAT, I hear from organizations all the time, who – you’re absolutely correct – run straight to PBLs as the “easy fix” to dis-engagement.

    We don’t all have the same DRIVE (motivation, and thank you to Dan Pink for making motivation accessible to the masses) behind why we do what we do, and it’s time that we recognized that and adapted to that reality.

    For me, the bottom line on gamification, is that we (society, corporations, etc.) have traditionally been very bad at recognizing what drives good or bad behavior, and in recognizing, surfacing, and specifically addressing whether we’re getting the behavior we want, and whether the “behaver” (player/employee/etc.) is getting THEIR own value out of the experience (what’s in it for them? Which I know you often talk about, vs. what’s in it for management or the organization at large)

    Recognizing that their are multiple players, and many different drivers for those players, is massive, and we still have a lot to learn. With any downsides to gamification done poorly, it seems much healthier to put a lens on behavior and figure it out, than to ignore it entirely, as 20th century business management practices have often done.

    Given our mutual playground of Enterprise Social concerns – we can both point to a road to Enterprise 2.0 success that is littered with abandoned processes, apps and systems, that could’ve been (and can be) much more usefully enabled and successfully sustained, through techniques that we could easily lump under gamification (as a broad definition, which includes identifying motivation[s]).

    Relatively early days here, with only 5 years into the gamification meme, although it’s been a fast ramp up.

    I’m looking forward to diving deeper and deeper into the pros and cons, and helping organizations to sidestep the potholes they typically run into when they chase the SHINY aspects of gamification without really understanding it more deeply.

    Keep stirring the pot! Debate and discussion helps make sure we’re all keeping it real. FTW!

    Best,
    Dan

    Reply
    1. Greg Lowe Post author

      Dan,
      Thanks for your thoughts. I agree in principle, but reiterate that my concern is on implementation. I’d be interested to understand a few things

      1. What percentage of employees in a large company are totally turned off by gamification? No matter how well thought out and implemented, there will be part of the population that equates social to being a game or worse yet “Facebook for the enterprise”

      2. How do you educate managers about the dangers of using all of this data incorrectly?

      3. How does a company react/respond when something goes wrong?

      What is clear is that Big Data is here to stay (especially after Nate Silver’s work), but what is unclear is how organizations can mitigate the downsides. This is especially important considering that most organizations invest very little in management training and only compounded by the fact that the middle managers who would likely use this data are also the ones that are most impacted by becoming a social enterprise.

      Reply
  5. Kathy Sierra

    Virtually all gamification platforms today are based on the one thing they can automate and scale: operant conditioning. From a psychology perspective, gamification (nearly all of what is considered gamification today) is based on Skinner, while actual games are based on Mihaly (can’t spell his last name… But all professional game designers understand his work). And the results they define live at opposite ends of the motivation continuum as defined by Self-Determination Theory, the *leading* and most credible psychological theory of motivation today.

    So we have a huge problem. When all gamification platforms/vendors/consultants have is an Operant Conditioning solution, everything looks like an operant conditioning problem. But that’s not the big problem. The more severe problem is NOT operant conditioning solutions — which have many wonderful and appropriate uses — but that the dangers of applying operant conditioning don’t LOOK like dangers. After all, how can you possibly go wrong with a positive reinforcement / you-get-what-you-reward approach to behavior?

    It SOUNDS like all upside, and in fact when gamification vendors discuss pitfalls with gamification, they are nearly always discussing “bad” gamification as that which either reinforces/rewards/incentivizes the WRONG thing or simply hasn’t properly tuned the reinforcement schedule. In other words, “bad” gamification is viewed as that which isn’t properly applying Skinner.

    In reality, the problem with “bad” gamification is NOT a failure to properly implement reinforcements… It is the use of externally-regulated reinforcements, period. Debating how and when and what reinforcement/rewards to use when the fundamental problem is a scenario that is harmed by ANY attempt to apply *external* reinforcement is just another rearranging the deck chairs on the Titanic. But of course it does not look like a sinking ship, as almost ANY attempt at applying reinforcements (Skinner) WILL generate behavior. But in many cases, it is not the behavior that leads to something successful *over the long arc.*

    I keep waiting for the gamification thought leaders to deeply understand the complex psychology they’re working with, but against it is not in their best interest to do so. They would have to acknowledge a wide swath of situations and goals where operant conditioning is the dead-wrong approach. But of course that won’t really effect them, because the areas where the damage of extrinsic motivators applies often do not show that damage for some time, and often only AFTER the initial flurry of dopamine-fueled faux engagement has begun to decline.

    There are, of course, many many areas where operant conditioning is the appropriate and most effective solution. And many many areas where it is not just inappropriate but long-term harmful (according to the science). The scary part is that the areas where operant conditioning is harmful also happen to be the ones that really, deeply matter to individuals, companies, and society.

    I “get” that the science is somewhat counter-intuiitive. I “get” the desire to invent/reinforce “th behavior we want.” I “get” the giddiness over using a technological solution to scale positive reinforcement. But the inconvenient truth is that there is a well-researched, disturbing dark side-effect when externally-regulated systems are applied in the wrong scenarios. I had to walk away from one of the best jobs I ever had once I understood that we were doing more harm than good, so I sympathize. I was once short-listed for an uber prestigious Cleo award for a gamified marketing site I produced in the late 90′s (Willy Wonka, A Nestlé site). (of course we did not call it gamified, but it was textbook — we tracked user participation on the site’s branded games and then unlocked new activities based on their engagement behavior, and we used leaderboards, etc. It wasn’t the actual games that were the problem… They were ACTUAL games, and designed to be rewarding on their own. It was the tracking and positive reinforcement for their participation through the site as a whole that was the gamification/operant conditioning piece).

    This is a terribly complex topic: we are dealing with significant and subtle and tricky and oftn conflicting psychological forces, largely subconscious for people. One that suffers from *appearing* like just a little fun and what could be the harm in that?? Thank you for being one of the rare voices expressing concerns.

    Reply
    1. Greg Lowe Post author

      Kathy,
      This is great insight. Thank you for bringing deeper context to the conversation. As you point out, this is a space that is highly driven by vendors that often lack the consequences of the solutions they are selling. When I wrote the piece, I was simply trying to identify that gamification can have negative consequences. Your contribution has peeled back the layers of the onion and laid it out for even non-experts to comprehend.

      Reply
    1. Toby Beresford

      Good post and discussion this, thanks Greg. Apologies that I am a bit late to the party!

      I certainly agree that non-financial incentives (or no incentives at all) actually work best as even small financial incentives when offered globally, can distort behavior and drive quantity of activity rather than quality, notwithstanding the massive success of a particular campaign.

      I do think that providing more feedback attuned to the business objectives with a social media leaderboard helps each employee optimize their own performance and drive wider social business maturity.

      Ensuring that the leaderboard is appropriate to the culture of the adopting business ( the options are: individual self optimization, competitive within a team or competitive team v team) I see as the responsibility of the gamifier within the organization rather than the platform vendor.

      Reply
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  7. Dan Keldsen

    FYI – In case you missed it, a recent interview with Kevin Werbach on WHEN and HOW to setup a workable and usable gamification foundation:
    http://www.informationarchitected.com/blog/iam-talking-gamification-gamify-for-the-win/

    Kevin has an interesting dual role in the academic and commercial worlds. Glad we finally had a chance to chat after having known each other virtually for years. His new book is a quick, practical read on gamification as well. We need more content like this.

    Re: Gartner and Gamification:
    Gartner’s stats would be more useful if they compared failure of gamification efforts to typical project failure rates overall.

    Given that enterprise projects, IT-oriented or not, fail at somewhere between 70-85% (i.e., more often than not), I’d say it’s not gamification per se that’s the problem. It’s poor planning, execution and poor (typically non-existent) sustained efforts to adapt, learn and adjust any new initiative over time.

    Put more simply, organizations have short attention spans, because the people in them are being crushed with far too many projects and not enough resources to accomplish them, and most projects don’t get the attention they deserve.

    We can all point to poor marketing campaigns, annoying loyalty programs, bad salespeople, terrible customer support reps, clueless managers, lazy line workers, poor collaboration… but that doesn’t mean that every aspect of any of those disciplines or roles is doomed forever more. They’re just doing it wrong.

    Professional and corporate responsibility needs to be talked about – too much responsibility is being pawned off on technology and memes/trends, with far less responsibility for ownership and understanding by the professionals (and their bosses) who are supposed to be managing these projects.

    Reply
  8. Greg Lowe Post author

    Thanks Dan, I like to share information that is relevant to the conversation that either support or contradict my blog posts. I’m glad to share all sides (there may be more than 2) of the story.

    Reply
  9. Dan Keldsen

    Greg – Agreed, for gamification, social business, innovation, and much more, there are many sides of the story. That’s both the biggest problem and biggest opportunity for any of these topics.

    There’s more gray than black and white – which in the resource-starved enterprise, spells doom for successful initiatives that require more nuance than the much more established practices of accounting and manufacturing processes, for example.

    Still relatively early days, eh?

    Reply
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