Why The Gamification Trend Fails At Most Companies

Using gamification to incentivize workers is a popular business strategy these days, but does it actually work? Consider this before you hit play.

Gamification has become a real buzzword over the last few years: News articles and statistics about applying game mechanics to incentivize behavior are published almost every day, and we’re seeing huge numbers of enterprise companies integrate gamification into their processes. Technology research company Gartner has even predicted that by the end of 2014, over 70% of the Global 2000 will have at least one gamified application in place.

However, another statistic from Gartner shows that 80% of those same gamification implementations will fail to meet their business objectives.

I’ve heard many companies talk about using gamification solutions because they look fun. This is the wrong reason to use gamification. Gamification in the enterprise is not about fun or even engagement—it’s about driving business results through changes in employee behavior.

Gartner says that the reason most gamification implementations will fail is because of poor design. In my experience, poor gamification design is a direct result of not identifying (and being able to measure against) key business problems a company is looking to solve. Let me share an example using something every company cares about: sales.

A few years ago I was managing a team of sales people. Like most sales managers, I was always looking for ways to motivate my reps to close more business. So, again, like most sales managers, I would constantly run sales contests and offer bonuses to my reps. However, I started to notice a few problems:

  1. The same reps won every time

    I had a few top performers that would always take home the prizes. More importantly, these were not the reps I wanted to motivate. Ideally I wanted to incentivize everyone else; not the reps that would perform anyway.

  2. Reps stopped caring once they fell behind

    The day I would roll out a new contest, everyone would get excited about it. But inevitably, reps would fall out of contention, at which point they would disengage and stop caring about the contest.

One could argue that if you were going to implement gamification for a sales team, you should address these problems. How do you find a way to motivate everyone, not just your traditional top performers? How do you keep reps engaged even if they’ve fallen behind?

There are a number of sales gamification solutions on the market today. The large majority are essentially leaderboards which allow reps to earn points and individually compete against each other. But what most of them have done is simply create a more fun and dynamic way to showcase the same results that sales managers have put into reports and spreadsheets for a decade.

If you post an online leaderboard of sales results, won’t the same top performers keep winning? Won’t the other reps become disengaged and unmotivated if they fall too far behind? This is an example of implementing poorly designed gamification for the wrong reasons and exactly why we created Fantasy Sales Team.

Let me be clear: Gamification can have tremendous impact in an enterprise environment. I’ve seen that firsthand on dozens of occasions. But you shouldn’t implement gamification for gamification’s sake.

First, you should identify exactly what business problem you’re looking to solve. Then you need to ensure whatever gamification solution you’re evaluating will have a direct and measurable impact against that problem.

Don’t fall into the trap of implementing solutions simply because they look fun or engaging. Remember that you’re making an investment of time, employee attention, and budget. For all of those items there’s an opportunity cost. You need to be able to measure a return on a gamification investment just like any other. So think twice and make sure you’re doing it for the right reasons.

Adam Hollander is president & CEO of Fantasy Sales Team.

[Image via Shutterstock]

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  • The original problem is somewhere else; you think that competition is good. It is not, especially when we are talking about a work environment where people are supposed to work together. Competition is the opposite of collaboration. Leaderboards automatically create competition, and despite the conventional wisdom that "all sales reps are sooo competitive", you yourself see that this is not true.

    More on that here: 9 Reasons Why Competition Is Bad For Sales http://tinyurl.com/k2wndg8

  • As someone who has spent their entire career in sales and sales management, I can say confidently that competition is 'not' bad for sales. Competition 'designed poorly' is bad for sales, per my examples above. Your article echos a lot of the statements I made in mine (e.g. only a handful of people compete, competition doesn't last long, small number of winners, etc.) but these pitfalls don't exist if a sales competition is designed the right way. At FantasySalesTeam we've run hundreds of contests with our customers proving this is possible.

    I do agree with your statement about creating a work environment where reps collaborate and rely on each other. That's one of the ways we solved the problem; by allowing reps to build teams of their peers and friends.

    In my opinion, your article describes why 'poorly designed' competition is bad for sales. Given that most sales contests fall into this bucket, I understand why you felt comfortable making such a broad statement.

  • Fourth: there is a plethora of evidence collected on the book Top Dogs - The Science of Winning and Loosing that talks about nothing else then competition, with all the neurophysicological and behavioral background that makes contests actually pretty troublesome in a work environment.

    FifthL even authors of books such as "Motivating with Sales Contests" spend half of their book on elaborating how to "fix" the contests, because people disengage, stop competing, show bad behaviors etc. That's not a sign of competition working.

    It's time to question the gut feelings and conventional wisdom and put a more scientific approach behind that. We may be surprised to see that we spent a lot of efforts on a broken system, instead of looking at alternatives. And no, the alternative is not Fantasy Sales Team. It's just more of the same with a different name.

  • First: A fantasy sales team is still a poor gamification design (and yes, this is gamification as well, not something completely disconnected and therefore magical or superior)

    Second: because you make an individual competition to a team competition, doesn't solve the problem, it just relays that on another level. Behaviors such as sharing information (with other teams), behaving unethical towards the customer to make the sale etc. are not going away with this.

    Third: sales managers, especially those who stay only a relatively short time with their teams (or have reps who stay only short time) tend to create a reward system that destroys a long term program. Read more from Anton Suvorov about Transient managers create Addiction. Those sales managers may be under the impression that sales competition works so great, because they never see the long-term havoc that's created.

  • Mario, I appreciate that you've taken the time to comment and provide your opinions. I'm familiar with your work and greatly respect what you've added to the gamification community.

    You're an expert in gamification. I'm considered an expert in sales, sales management and sales motivation. Over the last year alone I've personally worked with 60+ sales teams to design and launch hundreds of sales contests. I can confidently say there are absolutely ways to utilize competition to drive a positive overall result. It just needs to be combined with collaboration and setup in a way where reps have choices / different potential ways to win and compete.

    I'm candidly a bit puzzled about your more direct comments. You speak authoritatively yet have never taken the time to learn about what we've built or to see our solution. You definitely haven't talked with any of 75+ enthusiastic, renewing customers. I would be happy to discuss with you if you're interested in doing so.

  • Adam, I would love to see your stuff.

    You know that I am very outspoken against competition in a work environment. A competitive design typically neglects motivations and interests of the players. And empathy is an important thing in gamification design. Competition design for employees could even get you into legal trouble, as competition creates discrimination e.g. from a gender perspective (due to neurophysiological reasons). With gamification and many designs focusing on competition, we will see this sooner or later in court. I challenge here (together with many others) the conventional wisdom of the way business is done. And I am wondering how much we have underperformed because we always use competition in sales? if you are at the GSummit, let's have a talk there.