Will 80% of gamification projects fail? Giving credit to Gartner’s 2012 gamification forecast

Each enterprise software vertical has its most quoted statistical factoid. Here’s a fictional one – “in the year 2525 every enterprise will implement a zillion micro-services”.

The world of enterprise gamification has two oft-quoted statistics, and they are quoted all too often.

Statistic number 1: employees are not engaged

The first often-quoted statistic is that about 70% of employees are disengaged. This statistic (available here as measured by Gallup) is often followed by an attempt to estimate the economic costs of such disengagement – at the hundreds of millions of dollars, or mote. Gallup’s recent release says that it “recorded employee engagement at 31.5% at the end of 2014, which was the highest reading since 2000. The current year-to-date average is 32.0%.” This means that 68% of employees are disengaged. While Gallup concludes the numbers are rising, they are “slight progress …the majority of the nation’s employees still fall into the “not engaged” category.”

Statistic number 2: 80% of gamification projects will fail

The second most quoted statistic about gamification comes from Gartner. In late 2012, at the top of the hype cycle about gamification, Gartner came out with a press release titled

“Gartner Says by 2014, 80 Percent of Current Gamified Applications Will Fail to Meet Business Objectives Primarily Due to Poor Design”.

I’ve seen this number quoted many times.

Today, I believe gamification is taking off in the enterprise.  Large enterprise players, such as Verint, Infosys, SAP and IBM are investing in gamification. But what is really unmistakable is the interest large enterprise companies are having in gamification and the willingness to address employee engagement by thinking deeply about gamification, without the fallacy of taking is as a form of “fun” or “videogame” veneer on top of work.

But Gartner was spot on in making that 2012 forecast, because the gulf separating good gamification design from poor gamification design is far and wide. In 2012 some of the emerging views of gamification were indeed overly simplistic; the industry is still dealing with their ramifications today. But what’s really interesting is the vision Gartner had , voiced by Brian Burke, its research vice president (and author of a 2014 book about gamification) which I wholeheartedly agree with:

The challenge facing project managers and sponsors responsible for gamification initiatives is the lack of game design talent to apply to gamification projects… Poor game design is one of the key failings of many gamified applications today.”

“The focus is on the obvious game mechanics, such as points, badges and leader boards, rather than the more subtle and more important game design elements, such as balancing competition and collaboration, or defining a meaningful game economy. As a result, in many cases, organizations are simply counting points, slapping meaningless badges on activities and creating gamified applications that are simply not engaging for the target audience. Some organizations are already beginning to cast off poorly designed gamified applications.”

By the way, if you’d like to, you can read the original Gartner report here (it’s free, but requires registration).

Gamification: designing employee behavior

In a section discussing gamification for employees – known today as enterprise gamification, Gartner made some prescient forecasts and presented a compelling analysis. I’d like to highlight this and show how it has evolved since 2012:

1. Gamification isn’t just about competition.

The currency of gamification isn’t about “outwitting and outlasting” anyone, as some reality shows have programmed us to think. In general, the currency of gamification isn’t triumphing over others. Gartner got that correctly, in a space that was teeming with announcements about employees competing against each other for badges. Here’s what Gartner had to say:

“Gamification uses the currencies of social capital, self-esteem and fun overtaking extrinsic rewards as motivations for improved performance”

Looking at the state of gamification today, I think Gartner were spot on regarding the dwindling importance of competition. Today, everyone recognizes that social proof plays a big part in gamification – we want to be like others – and gamification mirrors the actions of our fellow employees, prompting behavioral change. Self-esteem is also a driver- a need to feel mastery at work – but what today is becoming most salient is that gamification is becoming a form of the quantified self. Tracking performance and measuring it have been proven to be a powerful motivator, and many gamification platforms are today even forsaking the nomenclature of “gamification” and using “performance platform” or “fitbit for work” to make this point about gamification.

2. Gamification isn’t about top performers either

In 2012 Gartner said that “competitive games will play less of a role in employee performance being displaced by collaborative games that are designed to maximize business outcomes, rather than rewarding a few top performers”. And indeed, in 2015 we see the rise of modified leaderboards which are designed to motivate the middle 60% and not highlight those people that always stay at the top. You can read about best practices for leaderboards here and about how team incentives work better than individual ones.

3. Gamification is about feedback

One of the most interesting – and less conspicuous –  aspects of gamification is that it collects real time feedback about our performance, and then delivers it in real time, giving us constant feedback that is immediate in its ability to coach or remedy behavior. We’ve written about this here – reviewing the importance of feedback to things like sitting up straight or working a cash register.

Gartner got this right, too:

“Employee performance feedback will move from being top-down and periodic (often annual) to being social, peer-based and real-time.”

The importance of immediate feedback shouldn’t be underestimated. Instead of hearing, at the end of the week, that you didn’t perform well, you get immediate feedback on how your’e doing, how it compares to your benchmarks and past performance and to your peers. This constantly aligns behavior expectations and tells you if you’re in the red or in the green. This, in fact, is the quantified self, and it creates well-being, since you always know where you stand and (as we will soon show) what you should do next.

3. Gamification will change performance management

Today, even the annual review and setting performance goals and measuring them are changing, with the advent of companies like betterworks, which promotes the objective and key results method used by Google, Linkedin and Intel, in which employee performance objectives are set in a transparent way and are constantly assessed and revised.

We also wrote about gamification as a form of performance management for lower level employees (here’s our post), and we believe that is the right thing to do. Gartner forsaw this too:

“In knowledge work, such as project management or product design, emergent game structures will be more common than scripted games. In emergent games, players are provided with the goals, tools, rules and space to play… the outcome cannot be defined, but the goal is defined. Extending this approach for complex goals that require multiple players, self-organizing teams can be formed to achieve the goal.”

4. Gamification as a form of script for work

In the 2012 Gartner describes two forms of gamification – for knowledge workers (emergent games) and for lower skilled employees. It then introduces the idea of the scripted game:

“In low-skilled jobs, such as service desk analysts, scripted games will present workers with specific tasks and rewards to be completed, and workers will be motivated with social recognition within the workgroup and mastery of the tasks — while there are large risks in using scripted games, they can also be useful in motivating low-skilled workers”

In this, Gartner forsees the future of gamification. Workers will be motivated by mastery (a job well done) and by social recognition (since extrinsic drivers don’t work; intrinisic motivation trumps extrinsic motivation).

The interesting part is the use of the word “scripted”. Scripted means that employees are directed towards the next behavior (next best action) and not just by a competition to do something many times, or perform many actions over and over again. This idea is used by us today. We’re using it to introduce micro-learning and just in time learning in games, to show the “next best action” to employees and to direct them to the right courses of action. This works to get salespeople to work better with the CRM and directs customer service employees better.

5. Gamification is changing corporate culture

If you’ve been following till here, it becomes obvious that the result is a change in how corporations and employees interact: a change in corporate culture stemming from a different understanding about what motivates employees and how to motivate them. This isn’t a culture of “fun video games” as could be argued in 2012, it is a culture that views the alignment of goals between employee and employer with a new way of thinking. Gartner got this right too:

“Current top-down, command and control management approaches are being replaced by game design skills. Successful managers in the future will be great designers of games … that are designed to achieve specific business outcomes”

“Organizations should seek to clearly define the organizational objectives of employee-facing applications, understand employee objectives and focus on where the two overlap. Applications should be people-centric and enable employees to be successful in achieving their objectives — where they are aligned with organizational objectives”.

So, where is gamification today? Hype? or Plateau of Productivity?

In 2012, according to Gartner, gamification was at the “Peak of Inflated Expectations”, just before the “Trough of Disillusionment”.  However, Gartner was never dismissive of gamification. It just thought it would take people some time to get it right – failure that comes before success.

Where is gamification today?

Based on the demand I see in the market, the market is ripe. I hope we get to Gartner’s “Plateau of Productivity” soon, because, just like Gartner, I am convinced that gamification has the potential of being truly transformational.