If you wanted to observe how Cisco determined where to invest in next-generation routers, how NetApp found a way to better understand its customer needs, how HP handled portfolio prioritization, or how the city of San José, Calif. figured out how to manage a $22.5 million deficit in its fiscal year 2013-2014 budget, you would be looking at people playing games. Serious games. The kind of games that solve very complex business problems that involve conflicting goals.
Every business today needs to do more with fewer resources, so they must prioritize conflicting demands and goals. Businesses typically create an ROI model as the basis for their decisions on what’s important for them to pursue. Although that may seem like a rational way to make decisions, ROI is self-subjective and can be manipulated. Plus it doesn’t really get to the heart of what’s happening in the business. And sorting through ROI is laborious and takes a lot of time. That’s a hindrance in a world where speed is becoming a competitive differentiator, so there’s an emphasis among leading companies on finding a way to make better decisions through collaboration.
“In research that we conducted with Borland, we found that companies would make ROI decisions in a vacuum,” says Luke Hohmann, founder and CEO of The Innovation Games® Company. “One product manager was completely confused that her project, which had a negative ROI, was approved. What surprised her even more was that she and her peers were never even consulted about the selection of projects. As a result, there was no strong commitment to any of the projects chosen. More generally, collaborative behaviors produce better results in decisions around how to help a business succeed.”
“Real collaboration starts when two or more people or organizations decide that there’s a shared goal that they want to accomplish or a problem they want to solve — and certainly allocating resources against a project portfolio fits this criteria. That problem-solving act requires sharing knowledge, trying experiments, identifying work, distributing work, coordinating activities and then building consensus around certain chains of activity,” states Hohmann.
Real collaboration isn’t the same as sharing ideas, resources or knowledge and cooperating so that two parties can help each other achieve dislocated goals. The difference is subtle, but real collaboration requires doing something together. That subtle difference is important in business, Hohmann points out, because people must figure out how to spend the budget according to projects across the entire business. They need to accomplish it in a shared manner so the business can succeed — yet competing interests within the business can also win.
Rackspace, Yahoo! and Adobe are also among the leading companies playing serious games because they work better than non-game approaches to address conflicting business issues. The Innovation Games® Company creates games in which employees, and even customers (or citizens) compete for what they want; but they can’t complete the game (solve the conflict or goal) without working with other employees or customers and without revealing what they really want.
How to make the best business decisions
Businesses primarily use these serious games in four areas: market research, portfolio prioritization or portfolio management, strategy and innovation, and sales. Hohmann, whose background training is in organizational behavior, cognitive psychology and computer science, says the games in the company’s SaaS platform are optimized for maximum collaboration, thus producing the best results.
As an example, a tech company product manager making decisions about a product’s next release but dealing with more features than the development team can undertake, can use the Innovation Game® “Buy a Feature” to prioritize development according to what customers want and need. Let’s say there are 18 features with a total development cost of $20 million, and that eight players will play the game. (All games are limited to between five to eight players to maximize discussion and negotiation). The game gives each player $1 million to buy features they want. If they run out of money before they buy all the features they want, they must collaborate with the other players to get more. And if there’s a feature that costs $1.5 million, no single player can purchase it; it can only be purchased by collaborating.
In serious games the results materially impact the players. The citizens of San José, for example, are playing a game to make choices about budget cuts for services that they receive, and the mayor and city council will align their decisions with the results of the citizens’ collaboration in the game. Hohmann and his team have helped hundreds of citizens play games in these small groups, integrating and aggregating the results into highly actionable results.
The results of serious games are remarkable, Hohmann says. They also disrupt market research based on demographics (gender, location, etc.). Most innovation is not based on demographics (like what you wear or how frequently you cut your grass). Instead, innovation is grounded in understanding the problems people are facing — what is important to them.
The serious games model identifies what’s important to the players and tracks how they negotiate and collaborate to arrive at their decisions. In the tech company example above, the negotiation and collaboration throughout the game shows the product manager which market segment wants a particular feature and why.
Hohmann believes the best business decisions balance the head and the heart. “ROI is a head thing, whereas fairness is a heart thing. Traditional ways of making decisions are completely based on one or the other. But the best businesses — and the organizations that move the fastest — figure out how to tap into both the head and the heart. They know that succeeding involves more than people just doing their jobs; they have to care about what they’re doing and want to succeed.”
The rules of the games are a critical success factor in achieving that head/heart balance. Players are comfortable expressing what they want because they all must play by the same rules — which doesn’t happen in the real business world.
A chat log after a serious game at HP revealed the importance of the rules factor. It was important to HP to involve more than 600 people around the world in the game and to ensure they each would have an equal voice. A participant commented, “This was transcending. In the game, I was playing with three people from China, two people from India and three people from places scattered around the United States. It was the first time that we came together in real time, without a phone call,” [which puts people who are not native English-language speakers at a disadvantage]. “And the game structure gave me equal power with the other players.”
Decisions around innovation
Hohmann observes that clients’ predominant use of the games is for innovation — decisions around new products and services. But innovation only happens in a native language, he comments. “Americans, for example, can’t really be innovative in China because they don’t know Chinese. Cognitive psychology shows that people truly create, or innovate, only in their native language.”
Making sure the games produce the best results for innovation decisions, The Innovation Games® Company has a network of nearly 1,000 trained facilitators worldwide who are trained on the games methodology and facilitate games in their native language when the players span the globe.
Yahoo!, for example, tapped into the games approach for a market research initiative seeking to understand the best way to ensure its Yahoo! Finance home page redesign addressed worldwide users’ needs and wants. The Innovation Games® Company assembled a global team of game facilitators who speak the languages native to each location Yahoo! wanted to research.
Hohmann says the company is launching a Certified Innovation Games Facilitator program in January, 2013. “As Innovation Games have become an integral part of their business, many of our largest customers are producing very large game events. Cisco, for example, recently produced an online game event with several hundred salespeople designed to identify ways to make sales deals bigger, help them close faster, and improve marketing materials. This large scale design, involving dozens of individual games, requires specialized production and design skills. Our customers asked us to create a certification program so that they can tap into our global network of facilitators to help them produce these larger events.
Hohmann says customers wanted his company to create a program that emphasizes skill and experience. They worked with experts in serious game design from Michigan State University to design a program that focuses on skills, domain knowledge and the abilities required to produce large events.
The Innovation Games® Company enables clients to consume the services the way they want to. Some use the online platform, others want in-person facilitators, and some prefer hybrid events. Others, such as Rackspace and Reed Elsevier extensively train some of their employees to be Innovation Games® facilitators. These in-house facilitators are invited to participate in the same certification program so that the global network of facilitators can share knowledge and improve processes.
Three drivers for a games approach to business decisions
The top three drivers motivating companies to try the serious games for their decision making start with the fact that organizations today operate with distributed teams. That’s not new (after all, companies have outsourced for years), but Hohmann says what has changed is that people now demand to be treated as equals. Since the distributed nature of decisions needs to enable equality, he says it requires platforms that enable that to occur.
The second driver is that companies are beginning to realize that doing a lot of analysis doesn’t result in better decisions; rather, discussions and arguments create better decisions. And the pace of the decision making is now crucial in competitive businesses. Using the games approach, companies get the necessary discussions and results that are actionable in an hour versus doing an ROI analysis that may be invalidated by market changes occurring while doing the ROI analysis.
The third driver is a megatrend. The head of HR of a $3.5 billion insurance company in Sacramento, Calif. explained to Hohmann, “Young, modern employees have spent more time playing video games than watching TV while growing up. They expect to be able to solve problems at work through gaming. These game techniques are what they understand. They understand online collaboration. They understand online team building. They understand chat logs and tools and posting. Innovation Games is the only platform that enables young people to work together in business the way they grew up. And if we don’t meet them on their terms, we won’t reach them on any terms. ” The Innovation Games® Company enables organizations to tap into this megatrend that can be a make-or-break factor for succeeding in business today.
Luke Hohmann is the founder and CEO of The Innovation Games® Company, the leading provider of seriously fun games that produce seriously great market research and strategy results for business. The author of three books with long titles, Luke’s playfully diverse background (computer science, cognitive psychology and organizational behavior) has uniquely prepared him to design and produce serious games. Contact him at [email protected].