This post first appeared on Blogging Innovation as Helping Others Go Vertical on 3/7/2010

Keen Mobility is a story of innovation, invention and entrepreneurship. Innovation is often focused on inventions and new products, but innovation is also a new way of thinking about conventional wisdom.  Jeffrey Phillips wrote an insightful post “Innovation, Invention and Entrepreneurs”, defining innovation as “a new idea that is put into valuable or profitable action.”  What is so wonderful about the Keen Mobility story is how Vail Blackwell Horton and Jerry Carleton combined innovation, invention and entrepreneurship to deliver value for a large, under served population and create a profitable, growing business.

Keen Mobility was founded by Vail Blackwell Horton and Jerry Carleton. Vail and Jerry were college roommates at the University of Portland (UP). Vail, born without legs, had been using artificial legs to walk but the crutches he needed to use with the artificial legs were destroying his shoulders. He wanted to find a better way to keep walking – for him, and for others. Vail went in search of a way to fulfill this mission.

Vail brought an idea for a new type of crutch – one with shock absorbing technology – to a group of engineering students at UP. He suggested the engineers try to build a working prototype for their senior project. They agreed, and the student engineers went to work. The concept worked! The engineering students successfully built a working prototype, and Vail and Jerry realized their concept could fly. They set off to start a company to build a product that would help Vail stay vertically mobile, and help others do so as well.

Full of enthusiasm, Jerry and Vail looked at each other across the table of their rented student digs in North Portland, asking what all entrepreneurs ask at this point, “What now?” They had zero idea how to launch a company and needed expertise and funding. Financing is tough at the best of times, but this was in 2001, in the midst of the dot com and telecom bust.

Jerry and Vail called the UP Center for Entrepreneurship. They also set up every meeting, coffee and lunch they could with people they could learn from. By approaching people for mentorship, not funding, they built relationships for the long haul. The company wasn’t bankable at this time, but many of these early contacts later became investors.

The UP Center for Entrepreneurship encouraged the team to enter UP’s Entrepreneurs Challenge and other business competitions. By April 2002 they had won the $10,000 first prize in the UP competition and third place in Portland Business Journal’s business plan competition, winning $35,000 in cash and services. UP sent them to more competitions around the U.S. where they consistently finished in the top three.

The team also looked for other sources of funding. They wrote a successful proposal to UP to fund their trade show booth and travel costs.  They contacted the National Collegiate Inventors and Innovators Alliance (NCIIA). With support from the Lemelson Foundation, NCIIA awards approximately 2 million dollars in grants annually to college students or recent graduates of member institutions.  Keen was awarded a $10,000 NCIIA grant funding prototype development and provisional patent filing costs.

A great partnership, Vail focused on creating the product and the vision for company while Jerry continued fundraising efforts. The VC environment continued to be difficult. Jerry “took every meeting he could get”.  Innovation continued. They partnered with universities where student engineering teams would apply to NCIIA to prototype Keen’s new product ideas. Frugality reigned supreme. In one example, now part of the company’s lore, Jerry opened the company bank account at US Bank because of their “Five Star Service Guarantee” that said if you waited in line for more than five minutes, they credited $5 to your account.  Jerry made sure to pick the longest line in the bank every time.

The business plan competitions were great for press, as was their compelling mission to keep Vail and others vertically mobile.  Jerry recalls, “We were never in crisis capital mode, we had options.” When they went out to raise their first preferred round, they “couldn’t stomach” the VC terms, so they turned to angel investors. Jerry was on the road, once meeting in six different states in 48 hours. Jerry had the mindset, “every person was a potential investor, or knew a potential investor.” Jerry hit the mark – the company’s first preferred round was oversubscribed.

Innovation also comes from understanding your market. One of Keen Mobility’s best selling products lines today, Tru-Relief^™ foam, started as an important addition to their shock absorbing crutch.  When looking for a solution for shock absorbing underarm foam, they discovered a superb foam that could also relieve pressure points. Pressure sores can cause severe discomfort to wheelchair users and can be life threatening.

A crutch with shock absorbing technology was the company inspiration but ultimately represented only a small market. The team realized they needed a full suite of “world-class products focused on safety, mobility, and comfort for the disabled, elderly and injured.” They now focused their efforts on building out their product line.

The team went on to close their Series B preferred, again oversubscribed, with about half coming from Series A investors, and half new investors. In 2005, Keen added their first institutional investor, Crobern Management Partnership, after the Series B close. Jerry describes Crobern as “a venture firm with an angel attitude”. Crobern’s focus in health care, and their ability to provide value beyond the dollars, has been a great fit with Keen. Jerry points to their early years as an important training ground. “The training we received in the lean years gave us such a respect for the money we raised.” Needing only half of the first tranche, the company gained credibility with their new investor when they bought CD’s with the extra money.

Keen Mobility today has “over $2.5 million in annual sales, 25 different product lines, more than $1.7 million in capital, and 12 employees. Keen Mobility has also been recognized by the Oregon Entrepreneurs Forum as one of the three most successful growth-stage companies in the state, ranked number 30 on the 100 Fastest Growing Private Companies List, and was placed on the Governor’s Honor Role for Employers of People with Disabilities.” Keen Mobility has been named in 2008 and in 2009 to Inc.’s annual ranking of the fastest-growing private companies in America and to the Portland Business Journal’s Oregon 100 Fastest Growing Private Companies list three consecutive years. Vail and Jerry were both named to the “Top Forty Under Forty” list by the Portland Business Journal.

Vail holds numerous honors, including his appointment to the Secretary of State Advisory Committee for Worldwide Disability Policy and was named an “Oregon Healthcare Hero” by Senator Gordon Smith on the floor of the US Senate.  Vail is also founder and chairman of Incight Foundation, dedicated to empowering people with disabilities through education, employment, networking and independence.

Jerry, who from year two was amazingly attending law school at night, was admitted to the Oregon Bar in 2007 and joined Bullivant Houser Bailey PC.  “Having a real life case study to immediately apply my classroom lessons was an incredible opportunity.” Jerry’s hard won lessons in founding and growing Keen Mobility inspired him to “pay that forward, taking companies into and through the trenches.” He continues to be part of Keen Mobility as a Director and Officer of the company.

Vail and Jerry’s story, the story of Keen Mobility, is a story of innovation, invention and entrepreneurship.  From Vail’s initial inspiration and invention, they used creativity, ingenuity, dedication and hard work to grow their company. What Vail and Jerry show us is that innovation is a mindset, that when confronted with challenges, new ideas can change the game.

What does an Emergent Business Execution Platform look like? I asked this question in my last post of 2009. Building up to this question, I had argued that “excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations”.  I also argued, using a memorable chicken breeding example, that “companies win or lose based on the performance of their teams, not individuals. And increasingly on the performance of teams of teams, distributed teams of teams, and networks of customer communities and partners. For companies to outperform their peers, they need a platform for group productivity.”

Social collaboration platforms are an important piece of the puzzle, but there’s more to an Emergent Business Execution Platform than you may think. This month’s SDForum Semantic SIG had the perfect line-up to tell this story: Ross Mayfield, Chairman of SocialText, talked passionately about the problems of our current dumb enterprise applications and the need to augment them with intelligence, and Jack Jia, CEO of Baynote told us about the cool things companies can do with automated intelligence.

Ross did a good job of summarizing what’s right and what’s wrong with enterprise software today. We have automated business processes – in ERP, CRM and more – to drive down costs, primarily by decomposing business processes into detailed steps with rigid handovers. Driving down costs is a significant achievement but it has been at a cost. These automated business processes 1) are designed not to change and 2) don’t include the intelligence of the organization’s people. Moreover, hard coded software like this reinforces past thinking.

Ross is advocating for a new breed of software that augments instead of automates, that supports business practices, and that allows for unstructured conversations, a software that enables an emergent intelligence. SocialText’s social collaboration platform is one such product and fits squarely into Andrew McAfee’s definition of Enterprise 2.0:

“the business use of emergent social software platforms (ESSPs)… that support collaborative work without pre-defining its structure. Structure in this context means workflows, roles and responsibilities, interdependencies, and decision rights. ESSPs like wikis, blogs, social bookmarking and social networking software, Twitter, and prediction markets.”

Baynote is a great example of another new breed of software, a new generation of analytical software applications that use data to derive insight, anticipate customer needs, act and learn. This is functionality way beyond traditional definitions of web analytics and business intelligence.

The enterprise software Ross described above delivers the same value whether it is the first, 101^st or 1,000,001^st interaction. Analytical software delivers increasing value with each interaction because it  learns and adapts. In contrast to the enterprise backbone of hard coded intelligence, these analytical applications use real time data sources to derive and apply insights. These insights are another form of an emergent intelligence. McAfee defines emergent:  “Emergent means that the software is freeform, and that it contains mechanisms to let the patterns and structure inherent in people’s interactions become visible over time.” While analytics aren’t freeform, they contain similar mechanisms to find the patterns and structure inherent in people’s interactions over time.

Baynote, for example, tracks user interactions on a website to derive that user’s context and intent. It uses the science around like-minded peer groups and “dozens of different behavioral heuristics” to “understand their visitors’ intent and context and automatically display the best content and products based on that insight”. Most websites use user generated content like voting and product reviews, “customers who bought this also bought that” algorithms, or the dreaded personal profile form to guide website content placement and actions. But the vast majority of users don’t add content, and the content that is added has, inevitably because we are human, a lot of cognitive biases (Baynote’s whitepaper on “How To Circumvent The Seven Deadly Biases” is a worthwhile read).

Baynote ’s recommendations work. They produced a 350% lift in direct revenue for Urban Outfitters when compared to their usual recommendation process (using what other customers bought and merchandisers’ suggestions). And in a Fox News competition, Baynote’s recommendation outperformed Fox News editors’ suggestions by 20%.

The take-away is that emergent intelligence comes from people and data. Both software products I have described here deliver intelligence in the enterprise. SocialText’s social collaboration platform enables the intelligence of people to better inform decision making. Baynote’s Collective Intelligence Platform™ uses data it collects to make intelligent decisions about each customer. Augmentation where it makes sense, automation where it makes sense.

Take a customer support example.  Text analytics detect a support issue brewing in the broad social media sphere. The company uses a social collaboration platform to collect information, find possible solutions, inform and update the field and support reps. Analytical applications derive a set of compliant options to address the issue that are the best fit for a specific customer and push those options out to the front line in near real time.

That starts to sound like an emergent business execution platform. Are we there yet? More to come.

My guest post on Blogging Innovation 12/10/09:

As a culture we like to think of our achievements as the triumph of the individual. But last week I used a memorable chicken breeding example to show you that group performance outweighs individual performance in a group environment because a focus on individual performance comes at a cost to the group performance.

The reality is that company performance is a complex group effort.  Without positive group productivity, companies under perform. And most companies under perform. We are used to seeing numbers like 90% of companies fail to execute on their goals, that excellence in business execution is the chief concern of CEO’s. What’s going on here? “Companies assume people are atomistic and economic, versus social creatures”, writes Stanford professors Jeffrey Pfeffer and Bob Sutton in “The Knowing-Doing Gap, How Smart Companies Turn Knowledge into Action.”

There are two things going on here that get in the way of group productivity, two deeply held organizational operating assumptions that are completely out of sync with reality. The first is that company performance is atomistic. The atomistic model assumes individual control and that company results are the consequence of individual decisions. The second is that individual performance is motivated largely by extrinsic, (financial) rewards based on individual performance.  “Companies operate on oversimplified or incorrect models of human behavior relevant to shareholder (short term) interests, irrelevant or counterproductive for ultimate success of the business.”

In “Managing the 21rst century organization”, Valdis Krebs of orgnet.com reminds us that what you know (human capital) multiplied by who you know (social capital) creates productivity and innovation. Traditional company hierarchies have an up-down formal information flow: you report up the chain, you receive information down the chain. But to actually get your work done, you tap into the organization sideways so to speak, leveraging your informal contacts across the company.

Research sited by Krebs found that “the ability to reach a diverse set of others in the network through very few links was the key to success for both individuals and teams.” We know this from our own experience. A good networker gets more stuff done because companies are not atomistic, they are complex group environments. So if you think about it, with the exception of the few jobs in the company that don’t interact with anyone, you should be interviewing people for their social skills, not their functional skills.

We might be done there, but we’re not. Because relying on social skills and ad-hoc networking is terribly inefficient and capricious. And all too often, it is down right discouraged by performance targets that misunderstand human motivation and pit employees against each other in an endless game of internal competition. At a recent TED talk, Dan Pink, author of “A Whole New Mind, Why Right Brainers will Rule the Future”, made the case for businesses to rethink their “business operating system” :

“There is a mismatch between what science knows and what business does. And what worries me, as we stand here in the rubble of the economic collapse, is that too many organizations are making their decisions, their policies about talent and people, based on assumptions that are outdated, unexamined, and rooted more in folklore than in science. And if we really want to get out of this economic mess, and if we really want high performance on those definitional tasks of the 21st century, the solution is not to do more of the wrong things. To entice people with a sweeter carrot, or threaten them with a sharper stick. We need a whole new approach. “

Innovation and productivity doesn’t happen by carrot or stick, it happens through connectivity. What Pfeffer and Sutton found was that “firms where measurement helped measured things that were core to their culture and values and intimately tied to their basic business model and strategy, and used these measures to make business processes visible to all employees.”

To close the group productivity gap and foster innovation, enable and empower connectivity in your company. This requires you to revisit your assumptions about company performance and individual motivation. So before your write “superstar wanted” in you next job tweet, read the chicken story one more time. Hopefully you will come to realize that “super collaborator” is what you really need. And before you start your quarterly/annual performance goal setting process, listen to Dan Pink’s TED talk one more time on what really motivates and stimulates the kinds of creative solutions you need today.

Finally, think about group productivity as part of an overall business execution platform. The mindful implementation of Enterprise 2.0 emergent social software platforms and performance management solutions are components of a connected company, and a connected company outperforms its peers. What does this kind of emergent business execution platform look like? Stayed tuned.

While it might seem that there is no possible link between chickens and Enterprise 2.0, it turns out that there is a really good story about group versus personal productivity involving chickens:

William Muir, an animal breeder at Purdue University, wanted to increase egg production by selective breeding, and he tried to do it in two ways. Both involved housing hens in cages (groups), which is standard practice in the poultry industry. The first method involved selecting the most productive hen within each cage to breed the next generation of hens. The second method involved selecting the most productive cages and using all the hens from those cages to breed the next generation of hens. You might think that the difference between the two methods is slight and that the first method should work better.  After all, it is individuals who lay eggs, so selecting the best individuals directly should be more efficient than selecting the best groups, which might include some individual duds.

The results told a completely different story. When Bill presented his results at a scientific conference, he showed a slide of hens selected by the first method after six generations. The audience gasped.  Inside the cage were only three hens, not nine, because the other six hens had been murdered.  The three survivors had plucked each other during their incessant attacks and were now nearly featherless… What happened?  The most productive individuals had achieved their success by suppressing the productivity of their cage mates.

The first method caused egg productivity to perversely decline, even though the most productive hens were chosen each and every generation. The second method caused egg productivity to increase 160 percent in six generations, an astonishing response as artificial selection experiments go.

Excerpt from Evolution for Everyone by David Sloan Wilson

In the recently released “The State of Enterprise 2.0 Adoption Q4 2009” by the 2.0 Adoption Council, “increasing productivity” was the leading business driver for adopting e2.0 solutions. “Productivity software” has historically been about personal productivity, a nebulous cloud of “tools people use to create and produce documents, presentations, databases, charts and graphs” and about Enterprise 1.0 style applications – very structured and top-down, like ERP, BPM and CRM.

What is being added to this mix is a set of tools to enhance community productivity: bottom-up, group orientated productivity tools. Like chicken farmers, companies win or lose based on the performance of their teams, not individuals. And increasingly on the performance of teams of teams, distributed teams of teams, and networks of customer communities and partners. For companies to outperform their peers, they need a platform for group productivity.

Nenshad Bardoliwalla points out that e1.0 and e2.0 applications, what I am calling personal, group and top-down productivity tools, are not a case of “either-or” but should co-exist and complement each other quite happily. For example, the order to cash process works perfectly well as a structured, top-down e1.0 application. The customer and the company will further benefit from an e2.0 problem solving collaboration process when an order is delayed.

So don’t be chicken, check out what Enterprise 2.0 applications can do for your company’s ability to improve and enhance group productivity.

For more on chickens, group productivity and innovation, see my follow-up post “Human Capital x Social Capital = Productivity and Innovation“

Last week in “Engagement by Design” I wrote about how marketers can use Funware – game mechanics in non-game contexts – to motivate and engage customers and create sustainable customer loyalty. Today I want to tell you about three software companies – Seriosity, Spigit and Lithium Technologies – that are integrating game mechanics in their products to help companies motivate and engage beyond the marketing function. Their customers are demonstrating that game mechanics drive innovation, collaboration and engagement.

Seriosity helps companies apply games mechanics “to overcome the difficulties of working life in the 21st Century.” Byron Reeves, Ph.D and founder at Seriosity, explains in Wired’s “How games can change ordinary life”, “What we’ve proven is that games can change behavior.” Seriosity creates “a synthetic economy, tailor-made for today’s information-intensive enterprise.” Their Attent product values scarce attention resources through their virtual currency “Serios”. Instead of just sending an email, you have to apply judgment about how much you value the task involved. This allows everyone to see which of their 10,000 tasks are most important – a key element of a successful business execution culture as I discussed in “How to get out of fire drill mode”.

Spigit, an enterprise innovation software platform, integrates game mechanics like contests, leader-boards, badges and “customizable currency” that motivate employees to get involved, and to keep them involved. Hutch Carpenter, Spigit’s VP of Product, blogged this description back when he joined the company, “The Spigit platform incorporates game theory into the process of identifying promising ideas and individuals who are good at seeing them. People can “invest” in ideas they believe in. If the company picks up the idea, everyone who invested in the idea earns incentive rewards.” This allows companies to lower the barrier to innovation by making the process more transparent and visible.

I was a corporate innovator and, for me, it always started with a question. “Why are we manually entering all that information from system A into system B?” or “Why are we running this entire multi-billion business on a spreadsheet?” I wasn’t the only person to notice these things– what made me an “innovator” was that I was willing to arm wrestle the organization until I landed the solution. But this is not a foundation for a successful business execution culture. Companies need a way to nurture and develop the ideas that have legs. Spigit has figured out integrating game mechanics into social networking can help companies like AT&T, MedPlus and Pfizer lower the innovation barrier and create a garden of innovation, instead of a wresting match.

Lithium Technologies’ use of game mechanics in their Social CRM offerings  was discussed by David Needle in “How Gaming Pros Help Big Companies – Are companies missing a fantastic asset in their customer base?” Lithium’s CEO Lyle Fong said Lithium has been able to attract more business as companies realize traditional marketing methods aren’t enough. Lithium’s reputation engine incorporates “behavioral science, a result of our gaming heritage.”  Cynthia Typaldos, now founder of Kachingle, wrote in her seminal “12 Principles of Community” that ”reputation lies at the juncture between identity and trust”.  Reputation is the cornerstone of a vibrant online community. Reputation has been an afterthought in most online communities, and the community value has suffered. Our local town newspaper has an online community, Palo Alto Town Square, that is dominated by rants and flames because the community does not build identify, trust and reputation.

In “How Best Buy’s Social Media Story”, I wrote about how Best Buy uses vibrant online communities to extend their corporate values beyond the organization to motivate and reward their customers for supporting those values. When customers can build reputation, they are more engaged and add more value. The benefits for Best Buy include improved first contact resolution and deeper customer loyalty. Lithium’s understanding of game mechanics has informed the deep reputation engine of their CRM platform powering many notable communities like Best Buy’s Forum and Dell’s customer community.

Engagement by design is about expanding today’s narrow definition of motivation which disconnects employees and customers. Game mechanics, and the behavioral science they represent, are tools worth adding to your business execution culture tool kit.

Game developers know how to create an immersive, engaging game experience. Why  not use these same game mechanics to create an immersive and engaging customer experience?

Juho Hamari and  Vili Lehdonvirta of the Helsinki Institute for Information Technology studied game mechanics in virtual economies in “Game design as marketing: How game mechanics create demand for virtual goods.” They looked at the the rules and mechanics that developers build into Massively Multiplayer Online games (MMOs) to encourage virtual purchases. What they discovered is that traditional marketing and game design already have shared design principles: progressions, levels, prizes, collectibles, memberships and points, among others. But traditional marketing is too simplistic, and thus fails to engage the customer.  “The game fails to engage for more than a short period of time, the game is too easy to provide excitement or too difficult to be rewarding, or the marketer’s commercial motive is blatantly obvious, preventing immersion in the game.”

They recommend marketing managers approach marketing “as a serious game design challenge: to hire professional game designers, to consult the large body of literature on game design, and to strive to create engaging games around their products and services. The whole customer relationship, from acquisition through retention to monetization, could be modeled as an interactive game.”

Gabe Zichermann calls this Funware. In The Engaging Web Gabe writes, “Funware is differentiated from games primarily in its objective. While games’ primary purpose is fun, Funware applications serve two masters: business objectives and enjoyment. Funware is also differentiated from Serious Games in that Funware applications need to be enjoyable for users, whereas serious games – such as military simulations – care much less about how participants’ feel about the game’s amusement level.”

It’s about using all the behavioral science that’s packed into compelling game design to engage and motivate your customers and create customer loyalty. “Promotions are a cold start each time,” observed Bunchball’s Rajat Prahari at the recent Engage!Expo. Promotions create loyalty to the promotion. A better offer and the customer is gone. Game mechanics create loyalty to your brand. So get serious about marketing and have a little fun.

My guest post on SuccessFactors Business Execution blog 11/6/09:

CEO’s continue to rate execution excellence as their top challenge. But what does “excellence in execution” actually mean? The CEO wants to turn the wheel and have the ship respond, but according to extensive research repeated year after year, only 10-15% of wheel turns get the ship moving in the intended direction. This means most ships are positioned poorly to weather a storm, and are also very likely to miss the trade winds of opportunity.

This disconnect between the captain, crew and ship is what I call the execution gap. Nobody argues there isn’t an execution gap in most companies. No one argues the execution gap isn’t costly – after all 85% of financial performance comes from execution. The big question is why? Why is there an execution gap? The basics of good business execution are thoroughly researched and described:

• Business alignment and
• People performance.

Excellence in execution requires an organization aligned around simple and clear business values. But the best practices on business alignment and people performance fly in the face of many of our deeply held but unexamined assumptions about leadership, teams and motivation.

There is a whole body of research around these deeply held but unexamined assumptions – social proof, fixed mindset, the liking effect, our oversimplified models of human behavior to name a few. Each of us has our own unique set of these assumptions, and companies are challenged to get complicated messages across such a diverse backdrop.

Excellence in execution is infrastructure, because processes and tools can incorporate and model best practices in execution to a degree and with a speed and flexibility not previously achievable for most organizations. And the results are clear. Companies that use processes and tools that incorporate execution best practices outperform their competitors.

Business execution software platforms like SuccessFactors propagate the company strategy to help the crew prioritize the one thing they need to do today from the 10,000 demands on their time. Crews who understand the priorities can apply their own wisdom and judgment – an execution best practice that increases company performance and individual motivation.

Together with social media software platforms like Spigit for internal innovation and Jive, SocialText, PBWorks, and Yammer for internal collaboration, these execution platforms create huge opportunities for companies to get their execution culture right and get it implemented. Internal collaboration and innovation tools create a dialogue within the company, allowing all crew members to inform the strategy and improve processes. Social networking communities, blogs, forums and Twitter let companies extend their culture and values beyond the organization and engage with their customers at a whole new level.

CEO’s no longer have to shout over the wind while crew members rush around trying to find and do their jobs, making their best guess as to what direction to set the sail. CEO’s can now steer an interconnected ship. The crew is connected to the CEO and to each other. The crew also has connections to the outside world that they can bring into discussions of the ship’s performance.

The execution gap is real, and is costing you money. The problem is not strategy, or analysis. “People know what to do but don’t do it”. Create a backbone for excellence in execution with tools and processes that model your values and incorporate best practices and you’ll fly across the seven seas.

There was a great series of blog posts this month about Cisco’s first ever virtual sales conference by Carlos Dominguez, Cisco’s Senior Vice President, US Service Providers Sales. The scale of the meeting was enormous, with over 19,000 virtual attendees. The list of technologies was as I would expect from Cisco, the stalwart WebEx, the immersive  Telepresence, and IPTV. What caught my attention is that they also used an Alternative Reality Game (ARG) called “Threshold” to build teamwork and conduct training.

This is a big deal to move away from the traditional annual sales meeting. Even when looking at a 90% cost savings, the bar to change the traditional FTF meeting is very high. It’s a significant part of a sales force culture, a highlight of the year. Carlos shared in his blog post, “I almost had a brain hemorrhage” when the idea was first floated. Cisco figured out that it needed to offer something engaging in a new way in a virtual meeting format. It turned to Games.

“In addressing one of the key challenges of keeping the sales organization engaged, they came up with a concept of doing a game. I remember the pitch: ‘Everyone loves a game and we’ll make it competitive with prizes and leader boards. You know the sales teams love to compete and win.’” The logistical challenges of a 19,000 strong virtual meeting are daunting, but being Cisco, were overcome.

With much nervous anticipation, the event went off with flying colors, with the ARG “The Threshold” being the highlight of the experience. The game worked because Cisco applied the Funware model:  start with the goal of making an engaging game and experience, and then weave into the game the salesforce training and team building aspects. Game designs that start with the training and add some bells and whistles usually fall far short of expectations.

There was almost twice the number of active game players than expected (13,000 active players versus the 7,000 expected). Carlos reported that “The combination of presentations and technical sessions via video, chat, discussion forums—and especially the games — really reinforced learning in a much more interactive way”. “The games, especially “The Threshold”, were over the top cool and forced you to learn and collaborate in a fun and exciting way.”

If you want to try “The Threshold”, Carlos has posted a first clue. How Fun Cisco!

Cisco Global Sales Meeting Uses Gaming for Engagement

Gaming and Virtual Reality at Cisco’s Annual Sales Meeting

Cisco Gets Real with Alternate Reality Games

VW has launched a wonderful initiative called The Fun Theory demonstrating how “fun is the easiest way to change people’s behavior for the better”. Their video “The Piano Stairs – The Fun Theory” has gone viral with over 3M views on You Tube.

Us business execution folks call this Putting Games to Work. As I wrote in “Playing Around with Customer Loyalty”, integrating proven game mechanics into normal content motivates desired behavior. Game mechanics can help companies fulfill their promise to their customers, and in doing so, drive customer loyalty, retention and revenues.

Bunchball, a leading game mechanics platform, calls this the “Science of Engagement”.  “Promotions are a cold start each time,” said Rajat Paharia, BunchBall’s Founder and Chief Product Officer at Enage!Expo last month. Like other traditional loyalty programs, they only engender loyalty to the program, not the brand. Customers are gone as soon as they find a better offer.

“If we understand what actions on your site impact customer value, then what tools and techniques can be used to increase it? Behavioral incentive and rewards programs, game dynamics and social media tools are all part of the mix,” writes BunchBall CEO Peter Daboll in his Forbes commentary, “A Web of Engagement”.

BunchBall’s customers have some remarkable results to show for building a web of engagement:

• 55% increase in desired behaviors
• Time on site up 20%
• 400%+ increase in page views
• Revenue generating sponsorships
• Users being incented to create the core site content, so that sites “run themselves”
• Increase in visit frequency

These metrics reflect the changing relationship that is possible between company and customer. Warner Brothers, for instance, never had a direct relationship with their customers before. Now they are starting a global loyalty program where website users can build virtual movie sets with virtual goods using WB virtual money, explained Rajat. Another BunchBall customer, NBC, launched a social networking site Dunder Mifflin Infinity, based on the hit series The Office. The DMI site has an “incentive economy – powering a virtual currency, leaderboards, behavior tracking, and virtual goods.” Website visitors are incented to become employees and generate core site content. By motivating users, NBC is able to meet its goal of having the site “run itself” with user-generated content. Comcast is another Bunchball customer and Jean-Claire Fitschen, Director, Games for Comcast, shared the Comcast experience with game mechanics at Engage!Expo. Comcast has achieved higher member conversion and more page views per unique visitor since launching the program. “Status and reputation are highly motivating for some users.”

Rajat also touched on how the science of engagement works internally, too. LiveOps, a virtual contact center solution provider, is using game mechanics to incent employees to complete training programs.

Games are fun, and fun is powerful. Put the science of games to work to help you build and motivate your customers and your team. Gamification is not only the new marketing, but together with the web of engagement of social media tools, it is a platform on which to build out your promise to your customers.

Business Execution is about delivering on a promise to your customers. Many companies, for example, have a lowest price promise to their customers. They offer to match any price a customer finds elsewhere. But most customers don’t take advantage of this offer. Customers just buy the item somewhere else. Why? Because most companies don’t engage their customers in fulfilling that promise.

Most of you, either first hand or by watching your kids and teens, know the power of engagement that computer and online games have. Smart game developers are taking this engagement know-how and moving it onto social networks like Facebook and converting whole new demographics into online game players. Game companies like Zynga are making serious money doing so while smart marketers, like Gabe Zichermann, are using this engagement know-how to drive customer loyalty and retention.

The best customer loyalty program of all time is the Frequent Flyer program, as Gabe pointed out at his talk “Playing the Loyalty Game” at EngageExpo! in September.  Think of all the hoops most of us jump through to stick with our favorite frequent flyer program. Interestingly, Frequent Flyer programs have the five characteristics of any hugely successful Massively Multiplayer Online Game (MMOG):

• Points
• Leader boards
• Challenges
• Badges and levels
• Rewards

Points, leader boards, challenges, badges and levels and rewards are motivating. “People have fundamental needs and desires – for reward, status, achievement, self-expression, competition, and altruism among others. These needs are universal, and cross generations, demographics, cultures and genders. The big secret is that game mechanics address these needs, and in the process incent, motivate and engage your users.” writes Gabe in “The Engaging Web – How Fun and Games Improve Your Site”. Gabe advises all marketers to use the MMOG basic design philosophy to drive user behavior and create customer loyalty that is “passionately irrational with predictability”.

Smart companies engage their customers. They reward you for returning to the store and allowing them to match the lower price you found somewhere else. They want you to help them fulfill their promise to you.  Southwest Airline’s promise is “the low cost airline.” One of the ways they keep this promise is fast turn-arounds – less time on the ground keeps overall costs down. Southwest airlines could create a game with rewarding points, challenges and badges for getting to the gate early. This would encourage you to help them do a fast turnaround and so keep costs down. Would leaderboards of on-time passengers be more effective than the punishment of last to board? I think so.

What game dynamics would make your customers “passionately irrational with predictability” – think about it. And think about getting Gabe’s new book – Game-Based Marketing: Inspire Customer Loyalty Through Rewards, Challenges, and Contests.