Most companies still use traditional business operating models based on the assembly line, that great productivity engine of the last century. But that model needs predictable prices and reliable demand forecasts, and those things are hard to come by these days. Because it requires people to conform to pre-defined plans and schedules, the assembly line and organizations based on that model donít do so well in high-change and unpredictable environments.
Games are as powerful for organizing knowledge and creative work in the real-time economy as the assembly line was for organizing industrial and repetitive work in the industrial economy. We arenít talking about making work into a game; weíre talking about using game mechanics to restructure how work is done. A game-like operating model is more flexible and adaptive because it enables players to continuously respond to change instead of demanding they adhere to pre-defined plans or schedules.
The most important step to take to begin experimenting with game-like operating models is to create an effective feedback system. There are three conditions for creating an effective feedback system. Those three conditions are: 1) real-time transparency of relevant data; 2) authority to act delegated to each player; and 3) a stake in the outcome for all parties. This is illustrated in the diagram below:
3 Feedback Conditions
When people are given real-time or near real-time data that provides adequate insight into the area of their concern, then everybody is able to see for themselves what is happening and they can self-organize and respond quickly without having to wait around to be told what to do. The problems that happen when only a few people can see what is going on is that those few people have to do all the thinking for everybody else, and thatís a lot of thinking to do. In many situations there isnít enough time available to do all the needed thinking. So the orders these people give to everybody else often produce results that are less than desired. Itís better to let everybody share in the thinking by letting everyone see the data. (See: Games for Better Supply Chains.)
When people have local authority to act on what they see, they donít have to ask permission and wait to get confirmation before they act. They can act quickly, and because they act in a timely manner, their actions are likely to produce the results people desire. Organize people into autonomous operating units and give them authority to act as long as their actions fall within predefined ranges (as defined by the goal and rules of the game).
When people have a stake in the outcome their actions produce, they are motivated to act and motivated to learn from their actions and keep getting better. This stake in the outcome can and should be a variety of elements from increased prestige and reputation to more interesting work and money rewards as well. People are motivated by various combinations of these elements depending on the situation.
Once called into being, a feedback system is a powerful creation. The trick is to guide it toward useful ends. Guide business feedback systems by providing people with goals to accomplish and rules defining what they can and canít do. (See: Games: The Next Organizing Paradigm for Your Business.) If the goal is clear and the rules are coherent, they will be accepted. People will continuously steer the feedback systems they participate in toward accomplishing their goals, and they will use behavior defined by the rules. Now you have harnessed a most powerful form of organizational energy.
The purpose of IT in the industrial economy was to support assembly line operating models and increase efficiency. The purpose of IT in the real-time economy is to support feedback systems that bring games to life and enable companies to respond effectively to ever-changing circumstances. What kind of feedback are you providing your business?