[How Does Gamification Work?]

The rise of gamification as an exploitation of the human desire for progression and achievement.

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When designed correctly, gamification has proven to be very successful in engaging people and motivating them to change behaviours, develop skills or solve problems. Gamification is near the peak of Gartner Hype Cycles and like most new trends and technologies, the initial hype surrounding the trend creates unrealistic expectations for success and many poor implementations follow. Like any new trend, gamification will move through the hype cycle from the peak of inflated expectations into the trough of disillusionment. When designed correctly, gamification has proven to be very successful in engaging people and motivating them to change behaviours, develop skills or solve problems. Leveraging some of the features used in real games, gamification can turn many other types of activities into games.

Gamification is currently being applied to customer engagement, employee performance, training and education, innovation management, personal development, sustainability, health and wellness – and the list continues to grow. Nike built the Nike+ platform to engage fitness enthusiasts to take their workouts to the next level. Khan Academy uses gamification to enhance the learning experience for students. Quirky uses gamification to crowdsource ideas from inventors for product development. These bright spots in gamification are both inspirational and instructional. However, the current hype around gamification disguises the reality of early enterprise implementation.

Early Hype

Gamification is near the peak of Gartner Hype Cycles and like most new trends and technologies, the initial hype surrounding the trend creates unrealistic expectations for success and many poor implementations follow. Like any new trend, gamification will move through the hype cycle from the peak of inflated expectations into the trough of disillusionment.

While we are positive on the longer term impact of gamification, we are less positive in the short/immediate term. We predict that by 2014, 80 percent of current gamified applications will fail to meet business objectives, primarily due to poor design. This design includes defining business objectives as well as application definition, deployment and adoption. In the longer term, as design practices improve and organizations focus on defining clear business objectives, gamification will have a significant business impact and become an important means for organizations to engage audiences at a deeper level.

As organizations become more focused on business objectives, gamification can help make the workplace more engaging and productive because it changes the rules of engagement and inspires employees to change behaviors as a result. Accordingly, by 2015, 40 percent of Global 1000 organizations will use gamification as the primary mechanism to transform business operations.
Do Not Confuse Activity with Success – The hype that currently surrounds gamification is deafening and the press is full of stories of companies that are leveraging this trend. Careful examination shows that many of the leading edge companies leveraging gamification today are willing to describe the solutions they are implementing but are less willing to describe the business results they have achieved. Clearly there have been quantified successes, but there are far more narratives that simply describe what has been done. Seek out examples of companies that have achieved their business objectives.
http://www.forbes.com/sites/gartnergroup/2013/01/21/the-gamification-of-business/#729c49bc5d57