Esko Kilpi on Interactive Value Creation

The art of interaction, the design of digital work and the science of social complexity

Month: May, 2010

Online multiplayer games teaching management

Teams are the archetypal functional units of a firm. They provide the means to combine the different skills and perspectives that are needed to get things done. Interaction between people is relatively easy because of the co-location of the team. People are physically together in the same place at the same time. The office space and office hours matter because they make managing easy. Coordination and communication are efficient and low-cost. Recently, however, many teams have been organizing themselves very differently. Teams increasingly consist of people who are scattered around various locations.

Almost all teams are dispersed on some level. Their members can belong to different organizational units. They can be spatially separated with work-spaces on different floors of the building. According to recent research, this is equal to working in different cities. They can also be temporally separated, meeting seldom or even working in different time zones.

Research has shown that even small degrees of separation affect the quality of collaboration in traditional settings. I understand collaboration here as an equation involving three variables: communication x coordination x responsibility. My idea of collaboration is thus very close to the mainstream understanding of the role and tasks of management. The more collaboration there is, the less (command and control) management is needed. You get my point?

It is no surprise that conventional management thinking has suggested that performance suffers with increasing dispersion. Because of this, managers have typically seen mobile and distributed work as liabilities rather than as opportunities. Geographically distributed teams have commonly been called virtual teams and seen as a secondary, less real, alternative to real teams. This label is not adequate any more. Distributed teams are very real!

Distributed work is not an alternative work practice any more, but the default state of value creation. Distributed participation offers tremendous opportunities and can significantly outperform co-located work when the setting-up and management are done in the right way.

The new landscape of work is alien territory for most of today’s business leaders and business schools, but things are already moving towards a new world. Important decision making is often distributed in order to enable fast responses to change. A lot of the work is done in global teams. These teams are often partly composed of people from outside of the corporation. Teams assemble for a single project and the leader has no formal authority.

The most interesting thing is that coordination and communication take place mainly through digital, rather than face-to-face interaction.

The new landscape of work consists of the network as the architecture of work and work as interaction between non-co-located but interdependent people. The astonishing thing is that we can find an existing, efficient, working model for this kind of digital work. It is multiplayer online games and the game environment in general.

The game environment may be the best productivity suit available for digital work. Adopting the qualities of the multiplayer games could help firms to meet the pressing challenge of mobile and distributed work. What then can be learned from these games?

The pace of games is normally very fast and requires fast decision making. Decisions are typically based on incomplete information and are iterated as more data become available later. You can’t take a lengthy pause to weigh up the options. The culture needs to embrace changing decisions and adopting constant corrections to the course that was initially chosen.

Acting in the game environment is always based on uncertainty. You can’t succeed in an uncertain environment without trial and error, without taking risks. You can’t embrace risk taking without accepting failures. Here the game environment is fundamentally different from most corporate cultures. In corporations the often-heard objection to trying out something is: “We’ve already tried it and it didn’t work!” The game environment approach is “Let’s try that again. The situation has changed and we have learned!” Frequent risk taking and confronting risks routinely help players to learn to keep paradoxes alive calmly and to live efficiently with continuous uncertainty.

Leadership in games is often temporary. Leaders switch roles. They direct others one minute and take orders the next. Leadership is a task, not a position or part of the identity of an individual. Players with good relational skills are efficient at forming teams and keeping them motivated. The leader of the group in the forming stage knows that someone else’s skills may be better suited for the next effort. The group often makes the choices about who will lead and who will follow. These decisions are most often based on volunteering, not dictated by a higher authority.

Companies often identify people as leaders because of the high potential they show early in their careers. That model may not work in the future. The growing complexity of business means that no single leader can handle all the different challenges any more. Treating leadership as a temporary state and a task can be the new model of the future. The assumption that leadership resides within an individual may not be correct. Getting the network environment right for collaboration is much more important.

To get the network environment right, there are some readily available lessons from which to learn: We can learn from Foursquare, Facebook and the World of Warcraft. The takeaways from Foursquare and Facebook likes is that digital credits that are earned can (and will) be a synthetic currency. People care a lot about gains and losses of points that are made visible immediately after a task is completed. The gains are even more interesting if they can be compared with the scores of other players. People could get credit/synthetic currency from their peers for contributing a blog post, or even re-tweeting important information. Pushing the Facebook  like button could mean giving virtual money.

Efficient digital environments like the World of Warcraft make information open to all of the players, all of the time. This information includes performance statistics and trend information for reflexive work. Real-time status updates on operations make planning the next move easy. The mainstream corporate approach to knowledge management has assumed that thinking and doing are separated. In the game environment a player is expected to act on the available information, without waiting for instructions from the boss. The most interesting thing in the game environment is that transparent information allows players to take responsibility, to assume leadership as needed.

Adoption of game mechanics to communication, coordination and taking responsibility would require a dramatic change in the mainstream organizational culture. However, these games are here today and the generation that has grown up playing the games is growing up and joining corporations. They are going to be the drivers of the change towards a more productive and more fun work environment.

Thank you @Joi Ito and Thomas J. Allen


Real-time information. The Sandbox Summit. The Diaspora project. On collaboration. Jane McGonigal. Seriosity. Vili Lehdonvirta. A video, Jesse Schnell on the future of gaming. A post on “gamification“.

Competitive and collaborative games

When coordinated behaviour takes place without the intervention of a regulating authority, we often attribute the coherent action to the existence of values and ethics. We tend to think that the existence of a strong value base means that less or even no regulation is needed. A decay of values conversely means that rules and regulation are needed.

A game theory approach to values assumes that people choose the kind of behaviour that gives them the highest expected benefit over time, given their expectations about what the other players will do and the rewarding or punishing feedback they get as a result of their own actions. Players learn by trial and error, keeping strategies that work and altering the ones that turn out badly. Players always observe each other. Those with a poor performance often tend to imitate those who are doing better. What has worked is likely to be used again.

In most games who wins and who loses is the whole point of playing. It would be hard to imagine a more unpopular outcome in the reality TV-series that today are watched by millions, than an announcement that all the players ended up as winners! It is, of course, beneficial that the place of the lazy, the incompetent, and the unmotivated is taken by better-motivated and more enterprising players.

Competitive games require rules to prevent players from cheating. Competition should be as fierce as the existing laws allow, we think. Any ambiguity in the regulations is immediately exploited. This is where our thinking does not serve us any more. Innovations by the players often make existing rules obsolete and call for new ones, as we have recently experienced in the financial markets. The present relationship between regulators and financial institutions is a competitive game in itself. Instead of a home audience watching, here we have the markets watching. The principle is the same.

There are also other growing problems with the games we play. In competitive games, there is always a lack of appreciation for the need of complementarities. You are supposed to manage without help from others. As a result of competition which excludes, diversity is reduced in the system that the game is played in. There are also more losers than winners in our games. Losers multiply as winning behaviours are replicated in the smaller winners’ circles and losing behaviours are replicated in the bigger losers’ circles.

As losers are excluded from the game, they are not allowed to learn. The divide between winners and losers grows constantly. This is why, in the end, the winners have to pay the price of winning in one way or another. The bigger the divide, the bigger the price that has to be paid. The winners end up having to take care of the losers, or two totally different cultures are formed, as is happening in the big US cities today. Psychologically, competitive games create shadow games of losers competing at losing.

The games we play have been played under the assumption that the unit of survival is the player, meaning the individual or a company. However, today the reality is that the unit of survival is the player in the game being played. Following Darwinian rhetoric, the unit of survival is the species in its environment. Who wins and who loses is of minor importance compared to the decay of the (game) environment as a result of the competition.

In games that were paradoxically competitive and collaborative at the same time, losers would not not be eliminated from the game, but would be invited to learn from the winners. What prevents losers learning from winners at the moment is our outdated zero-sum thinking and the winner-takes-all philosophy. In competitive/collaborative games the winners would be all those whose participation, comments and contributions were incorporated in the development of the game.

The most important reason why we need a new concept of games is because the players and their contributions in the real world are, at best, too diverse to rank. They are, and should be, too qualitatively different to compare quantitatively. In competitive games the players need to have the identical aim of winning the same thing. Unless all the players want the same thing, there cannot be a genuine contest. Zero-sum games were the offspring of scarcity. In the era of creativity and abundance, new approaches are needed.

In competitive/collaborative games the approach to rules is very different from before. The rules should be created, agreed upon and changed by the players themselves as the game continues. As there absolutely cannot be pre-existing rules for every conceivable situation that might arise, we have to move beyond seeing the players and the rule-makers as separate parties. The games are too complex to be governed totally from outside. We desperately need values-based participation as a prerequisite for taking part.

The players have the responsibility not only for adhering to the existing rules, but also for developing the rules further – specifically when the game (environment) decays as a result of the actions of the players.

The criteria for success in competitive games do not lie solely in winning but in the development and continuation of the game itself through collaboration.

Thank you Fons Trompenaars and Robert Axelrod


Situational values or sustainable values.