By Mike Brandofino | Department60
All too often, management teams lock themselves in a conference room and make decisions they believe are right for the company without engaging anyone outside of the executive team. Then they are surprised when the rest of the company’s response to their decision isn’t enthusiastic or they discover the new strategy can’t be implemented for a variety of reasons.
“Leadership is the art of getting someone else to do something you want done because he wants to do it.”
Dwight Eisenhower
Leadership is about articulating a vision, engaging others to help develop the plan to drive the vision and galvanizing a team to do whatever it takes to achieve the stated objectives.
But it sure helps if you can have fun while you’re doing it.
Yes, I said fun. A team’s ability to achieve the impossible is only possible if everyone believes in the vision and enjoys being part of the team. It’s a chicken and the egg type of conversation, does a winning team have fun because they are winning, or are they winning because they have fun?
The need for true leadership and the cooperation of the entire team is critical in situations where a company’s very existence requires hard decisions, quick action and dedication to the overall vision. This is a story about how my team leveraged Gamification to galvanize a company and take it from the brink of disaster to ultimate success.
I was appointed as CEO of a small public company that had some serious challenges. We’d just been delisted from NASDAQ, we were burning through more than $1.2million a month in operating expenses, 12 million in debt, with virtually no revenue growth, poor collections and a demoralized team.
As you can imagine, this was a daunting task, complicated by the myriad of challenges that seemed to pop up daily. Many executives get paralyzed by the sheer magnitude of the challenges they are faced with, while others tend to try to solve all problems at once. The key to any corporate turnaround is to assess the current state of the business, determine the desired state and build a plan that gets you from point A to point B. Sounds easier than it is, especially when there are so many moving parts and dependencies, but it does no good to set off on a journey without knowing where you are and where you want to end up.
We drew from an old business adage, you can’t eat an elephant in one bite, but if you assess the size and come up with a strategy, over time you can eat it one bite at a time and eventual accomplish the goal.
A Leap of Faith
As I prepared for an all hands meetings where I would announce a 30% reduction in staffing to cut costs, I came across a business brain teaser that I felt was perfect for the situation. It goes like this:
There are three frogs sitting on a log and two decide to jump into the water. How many Frogs are left on the log?
The answer is three, deciding to jump and jumping are two different things.
So I asked all those who would be remaining in the company to take a leap of faith with me and not just decide to save the company but actively participate and jump into the water so to speak.
We created the King Frog contest to keep the lesson from the Frogs on the Log concept fresh in everybody’s mind and to keep everyone invested in the effort to save the company. The concept was surprisingly simple and almost childish but it was amazing how people rallied around the game.
We established teams by identifying functional areas of the company and the metrics they impacted directly. For us, those teams were: Sales, Operations, Finance/HR, IT, Customer Services
- Sales metrics centered around bookings, renewals rate and selling margin
- Operations metrics focused on cost cutting, operational efficiency and up time
- Finance/HR metrics included timely payment of commissions, reduced collections time and improved billing accuracy
- IT metrics included infrastructure up time, cost optimization
- Customer Service metrics focused on customer satisfaction and cost optimization
Every team was given their baseline starting metrics and a monthly goal, usually represented as a percentage improvement as compared to the start of the month. It was very important to make sure that the goals were realistic enough to be achievable, yet large enough to have a positive impact. We set the individual goals to meet our corporate six month objectives and the game duration was set to match that timeframe.
Each month we held an all hands meeting to review the achievements from the prior month and show the new metrics for each group. The group who achieved the highest percentage of their monthly goal was proclaimed King Frog for the month and received the very stylish King Frog Statue along with some gift cards and a team lunch paid by the company. The teams also accumulated points towards an overall financial payout at the end of the game.
We knew that turning around the company required the effort of every individual in the organization. Therefore we established a way to recognize and reward individuals for their efforts in support of their team and the company.
Individuals could be nominated by members of their team for outstanding efforts. Those people would be acknowledged each month with a Rubber Frog to adorn their office space and individual frog points that would result in a financial payout at the end of the game for the top three Frog Point earners.
To encourage cross team support, individuals would earn extra points if the nomination came from someone on a different team.
It is amazing how coveted these little green frogs became and how proud people were to display the number of frogs they’d earned. We even started seeing people end their emails with “Ribbit” to signify job well done.
The impact of the King Frog game could be felt immediately. First and foremost we had everyone on the same page so morale improved significantly. Each and every person in the company knew what they could do individually and as a team to help us turn the company around. The game and monthly review of metrics created a healthy competitive environment where teams didn’t just want to meet their monthly goals, they wanted to exceed them and have bragging rights for doing so.
The monthly meetings also enabled me and my management team to provide updates on our overall progress, create an open forum for questions, celebrate sales wins and personally acknowledge individuals and their efforts.
The metrics we developed to track each team’s performance became part of our corporate Key Performance Indicators (KPI) report that we used to measure and make adjustments as needed to our overall goals.
What We Learned
As we progressed through the King Frog game we learned some valuable lessons about our company, our employees and the things that motivate a team.
Setting the Goals
It is extremely important to take the time to establish the proper goals for each team and to make sure that they align with the overall corporate objectives. In addition, you cannot assume that everyone will meet their objectives, so the combined team objectives need to be well north of your bottom line expectations.
Some key points to remember when setting goals:
- The goals need to be achievable. Setting goals that are too aggressive may result in a loss of interest and a defeated attitude. It is a good idea to have a mix of fairly low hanging fruit type goals and some “reach” goals that are harder to attain. This provides some success and keeps the team challenged.
- Goals must be things that the team can directly impact. For example, you can’t hold an IT person to sales goals, because they don’t have a direct impact.
- Don’t over burden one team. It is easy to say, “Sales, if you sell more, everything will be better.” However, this puts an unfair burden on the sales team and sets a perception that if they fail we all fail. In our case, we actually cut the sales quota in half and celebrated even the smallest wins. The result was a reduced pressure on the sales team and they ultimately outperformed their goals by a large margin.
- The goals must be able to be measured in an objective way. The ability to show a chart with progress is a tremendous morale booster.
- Don’t let any team fall too far behind. The monthly reviews help us gauge our progress against the goals but also provided great insight into teams that were having a problem. It could be the team leader, it could be that the goals aren’t set properly or that they don’t have the direct impact you thought they did. It’s okay to adjust the goals for a team midstream, because while the metrics are important, the feeling of achievement and contribution by all team members is critical to the overall success of any company.
Rewards
Acknowledging success and being rewarded are critical to the success of gamification in a business environment. This doesn’t always have to be a monetary reward, although money should be a component. In our King Frog game, the privilege of having the King Frog statue sit in their area for the month was the source of great pride for the winning team. We added gift cards and paid for team lunches, which in the grand scheme of things was very inexpensive but very much appreciated by all.
We established a system by which teams and individuals accumulated points throughout the game. At the end of the game, (in our case six months,) we gave three dollars for each point earned to the members of the winning team, two dollars per point for each second place team member and one dollar per point for the third place team. The point system was designed to ensure that every member of the first place team won approximately $1,000. This was substantial enough to make a difference for most folks but wouldn’t result in a huge cash outlay for the company.
We did a similar thing for top three individual point earners, enabling some people on teams not in the top three to earn something for their extraordinary efforts.
Consistency and Timeliness are Critical
It is critical to establish the ground rules, especially on when metrics will be reported to the teams and how the tracking will be handled. If you start taking too long to provide metric updates or if people feel you are changing the rules as you go, they will quickly lose interest.
We committed to having an all hands results meeting the first Friday of each month and made sure that all metrics reporting was capable of being prepared by that meeting.
Duration
Too much of a good thing is never a good thing. To make sure you keep everyone’s interest, the duration of the “game” shouldn’t last too long and should never be open ended. We chose six months because we felt it was long enough to actually show the impact of what we were trying to do, and short enough to have a financial reward in the not too distant future.
Ensuring your game has a finite term also enables you to reset the goals or establish new ones for the next game series as you assess the results of the efforts made in the game that is coming to an end.
Team Participation
It is important to have everyone feel like they are involved from the very beginning. We let team leaders establish team names and in our case, a team Frog mascot. This gave the teams a sense of ownership and they became attached to both their name and their mascot. Rather than dictate goals to each team, we worked with each leader to help them establish their group’s metrics. When people are involved in establishing the goals and benchmarks they will be measured against, it invariably gets them to stay focused and believe they can attain them.
The Results
We implemented a number of other games along the way, each with it’s own specific goals to address the various stages of recovery we were in. Over the three years we used gamification as a way to motivate and focus the entire company, we achieved a tremendous turnaround.
The results speak for themselves:
- Revenue increased 40%
- Operating Expenses decreased %46
- Gross Margin Increased 290%
- Days Sales Outstanding improved 44%
- We became current in our financial reporting and our stock resumed trading
- We eliminated $12M in debt
These results cannot be accomplished by an individual. It requires a team that is focused and invested in the vision and we succeeded because we had fun.
