Leadership's online labs

Leadership's online labs

Avid gamers are honing their leadership skills in multiplayer online situations. The tools and techniques they’re using will change how leaders function tomorrow — and could make them more effective today.

Tomorrow’s business landscape could well be alien territory for today’s business leaders. At many companies important decision making will be distributed throughout the organisation, to enable people to respond rapidly to change. A lot of work will be done by global teams assembled for a single project and then disbanded. Collaboration within these geographically-diverse groups will, by necessity, occur mainly through digital rather than face-to-face interaction. What on earth will leadership look like in such a world — a world whose features have already begun to transform business?

Suspend your scepticism for a moment when we say the answers may be found among the exploding space stations, grotesque monsters, and spiky-armoured warriors of games such as Eve Online, EverQuest, and World of Warcraft. Despite their fantasy settings, these online play worlds — sometimes given the infelicitous moniker MMORPGs (for “massively multiplayer online role-playing games”) — in many ways resemble the coming environment we have described and thus open a window onto the future of real-world business leadership.

True, leading 25 guild members in a six-hour raid on Illidan the Betrayer’s temple fortress is hardly the same as running a complex global organisation. For starters, the stakes are just a bit higher in business. But don’t dismiss online games as mere play. The best ones differ from traditional video games as much as universities do from one-room schoolhouses. In fact, these enterprises are actually sprawling online communities in which thousands of players collaborate with and compete against one another in real-time within a visually three-dimensional virtual world — one that persists and evolves even while a player is away.

The organisational and strategic challenges facing players who serve as game leaders are familiar ones: Recruiting, assessing, motivating, rewarding and retaining talented and culturally diverse team members; identifying and capitalising on the organisation’s competitive advantage; analysing multiple streams of constantly changing and often incomplete data in order to make quick decisions that have wide-ranging and sometimes long-lasting effects. But these management challenges are heightened in online games, because an organisation must be built and sustained with a volunteer workforce in a fluid and digitally-mediated environment.

When IBM commissioned Seriosity to study leadership in games, Seriosity used a team of a half-dozen veteran players, with more than 50,000 hours of cumulative experience, to observe and record the actions of leaders in this rarefied setting. The eight-month study also included interviews with more than a dozen prominent gamers about their leadership endeavours in this arena. A follow-up survey at IBM of people with both gaming and business leadership experience helped validate some of our findings and suggested how they might be translated to fit real-world corporate contexts.

A number of our conclusions about the future of business leadership were unanticipated. For one, individuals you’d never expect to identify — and who’d never expect to be identified — as “high potentials” for real-world management training end up taking on significant leadership roles in games. Even more provocative was our finding that successful leadership in online games has less to do with the attributes of individual leaders than with the game environment, as created by the developer and enhanced by the gamers themselves. Furthermore, some characteristics of that environment — for example, immediate compensation for successful completion of a project with non-monetary incentives, such as points for commitment and game performance — represent more than mere foreshadowing of how leadership might evolve.

Adopting some of these signature qualities of the game environment could actually make it easier to lead people in today’s real-world companies. The startling implication: Getting the leadership environment right may be at least as important to an organisation as choosing the right people to lead.

An online preview of tomorrow’s leadership

Multiplayer online games are an increasingly popular and particularly compelling form of entertainment. Some estimates put the current number of registered players worldwide at more than 50 million; World of Warcraft alone claims 10 million players, who pay a subscription fee of roughly $15 a month. Participants play for an average of 22 hours a week, according to researcher Nick Yee of the Palo Alto Research Centre; their average age is 27 and about 85 percent are men.

Although the games vary in theme and setting, many are similar in structure: Roughly 40 to 200 players form teams, or guilds, that undertake increasingly difficult tasks, whereby individuals acquire skills and tools that allow them to advance to the next level of play. Sometimes team members know one another in real life, but typically they form their relationships in the game world.

Online games are, of course, an imperfect analogue to real-world business. Not only do they involve lower stakes, but the problems teams face, difficult though they may be, are also sharply defined and structured. Instead of having to identify and frame challenges — a central element of real-world business leadership — gaming leaders primarily plan and execute tactics to achieve goals specified by the game.

Nevertheless, our findings reinforced our basic premise that leadership in online games offers a sneak preview of tomorrow’s business world. In broad terms, that environment can be expected to feature the fluid workforces, the self-organised and collaborative work activities, and the decentralised, non-hierarchical leadership that typify games. In more specific terms, we found several distinctive characteristics of leadership in online games that suggest some of the qualities tomorrow’s business leaders will need in order to achieve success.

Leadership demands speed. A game hour is unlike 60 minutes at your desk or in a meeting. Actions that might take weeks or months to unfold in real life are often compressed into hours or even minutes online.

The lightning pace of games is unlikely to become widespread anytime soon in the business world, except perhaps in selected contexts such as high-velocity financial trading. However, business decision making is accelerating, driven in part by the almost instant, if not always complete, availability of certain kinds of data. To keep up with rivals, real-world leaders will increasingly need to be willing and able to act on such information without pausing for long periods to weigh options.

Risk taking is encouraged. Trial and error play a big role in accomplishing game tasks. Failure, instead of being viewed as a career killer, is accepted as a frequent and necessary antecedent to success. Organisations can help prepare leaders by fostering a culture in which failure is tolerated. They can expose leaders to risk by mimicking the structure of games, by breaking down big challenges into small projects.

Leadership roles are often temporary. Perhaps the most striking aspect of leadership in online games is the way in which leaders naturally switch roles, directing others one minute and taking orders the next. Put another way, leadership in games is a task, not an identity — a state a player enters and exits rather than a personal trait that emerges and thereafter defines the individual.

Don’t get us wrong: Leadership stars do exist in games. Some guild leaders have successfully led 100-strong teams for a year or more — an eternity in this new medium. As in business, players with exceptional relationship skills are particularly good at forming effective teams, delegating responsibility, while keeping groups motivated and moving forward. However, games do not foster the expectation that leadership roles last forever. Someone leading a guild today may grow weary of the stress and hand over the reins after a month or two.

The idea of temporary leadership is alien to most business organisations. Companies usually identify people as leaders early in their careers. The selected few carry that designation with them through different jobs, each typically lasting several years, as they move up the corporate hierarchy. That model may not work well in the future. The growing complexity of the business environment means that no single leader will be an expert in every area. Beyond the obvious benefit of matching an individual’s expertise to a challenge, treating leadership as a temporary state can empower employees to volunteer to lead and, thereby, can unearth previously overlooked talent among the ranks.

Game elements to make leadership easier today

Most writing about leader selection and development focuses on people’s backgrounds and natural talents. Whether leadership ability is inborn or acquired through training, the assumption is that expertise resides within the individual.

Our study provided us with an arrestingly different view: Perhaps the right environment is what really matters, whoever the leader happens to be. This concept, which as far as we know is absent from the academic and professional literature about leadership, wasn’t something that we set out to prove. The notion arose from the experienced gamers on our research team, who were puzzled by our initial preoccupation with the individual qualities of game leaders. “If you want better leadership,” they asked, “why not change the game instead of trying to change the leaders?”

So we began to focus on identifying distinctive aspects of online game environments that could improve leadership in business and other real-world settings. We pinpointed at least two properties of games that we believe facilitate and enhance leadership: Non-monetary incentives rooted in a virtual game economy; and hypertransparency of a wide range of information, including data about individual players’ capabilities and performance. These two elements — along with the rich mix of text, audio, and visual communication in games — make it easier for leaders to be effective. This suggests that organisations can benefit by selectively “gamifying” their work environments in order to improve the quality of leadership — not in the future but right away.

Non-monetary incentives

A game leader faces important motivational challenges. Consider, for instance, having to persuade dozens of team members from around the world to leave their real-life activities and show up online at a specific time ready to participate in a raid that will last for hours. How do you motivate these players to contribute their time and skills to a coordinated activity that benefits the entire group?

The game leader is aided by an array of sophisticated incentive mechanisms — some of them built into a game by its developers, many created and refined by the leaders themselves — that reward the individual performance of players and their contribution and commitment to the team.

Incentive systems used by leaders affect motivation in several ways. Dividing up the winnings from a quest immediately after it’s completed — or, occasionally, awarding loot to someone even as the battle rages — creates a strong connection between effort and reward.

The sorts of contributions people make to a corporate cross-functional team aren’t, of course, as easy to precisely quantify, track, and reward as are contributions that game players make to their guilds. Still, we believe that game-inspired incentives have the potential to dramatically improve leadership effectiveness in business organisations. Companies might devise ways to shorten the lag time between successful outcomes and the monetary compensation for those who contribute to them. For instance, instead of getting an end-of-year bonus, people in certain businesses could be rewarded for their contributions to a project as soon as it was completed — a prospect likely to galvanise their efforts. Also, before the launch of a group project such as a prolonged cross-functional sales effort, people might be given a breakdown of how rewards for a successful outcome will be divvied up.

Hypertransparency of information

Game environments make a broad array of information, conveniently organised on data-rich dashboards, immediately visible not just to leaders but to the entire team. The information includes detailed statistics on individual and group performance and real-time status reports on operations.

Real-time updates about a team’s mission help a leader choose a strategy in the heat of the action. Data about individual players allows a leader to quickly locate guild members who can bring needed skills and weapons to a raid and then to assign them to suitable roles. As we noted when discussing incentives, transparent and quantitative score keeping, which governs the distribution of rewards and the assignment of roles, encourages players to see the system as fair and to buy in to a leader’s goals. In fact, most games are indeed meritocracies: The chances of getting preferential treatment simply because you’re a friend of the boss are relatively low.

Dashboards, or cockpits, display both status and communication functions on the same densely populated user interface and often on a single computer screen, eliminating the need to open and close different software applications. Constantly visible during play, the cockpits allow a leader to stay within the narrative of the game while acquiring necessary information about players and communicating instructions to the group. Unlike a corporate dashboard that is located on a handful of computers at headquarters, with access limited to the senior executive team, these personal, view-as-you-go game cockpits give people in the field access to information as soon as it is available. That, in turn, allows game players to act on it without waiting for instructions from a guild leader. What’s more, the information allows players to assume impromptu leadership roles as needed. In many of our video clips, we see three or four people barking orders to team members during a raid, briefly taking the lead in the improvisational style of a jazz ensemble.

Most real-world companies are already working on capturing and integrating real-time information about people, activities and results. Certainly, the concept of an uberdashboard that would synthesise and display all current company metrics is something CEOs have long sought, although fitting them all on one screen might be difficult. A more relevant issue is whether leaders might benefit from relinquishing control of some of that information, in order to provide employees with better tools for making their own decisions and to spur group insights that would never occur to a single leader.

The future is here

Even if they buy into the argument that game elements can make leadership easier, most business leaders will remain sceptical that a business can adopt them — unless, that is, these leaders themselves have spent time playing multiplayer online games.

To get the reactions of managers who regularly visit these online leadership labs and then return to the world of business, IBM surveyed 135 of its employees who had led business teams and had also been a leader or member of a guild in a multiplayer online game. For the most part, they found games to be surprisingly relevant to their day-to-day work.

Three-quarters of the respondents said that environmental factors within multiplayer games could be applied to enhance leadership effectiveness in a global enterprise. Nearly half said that game playing had already improved their real-world leadership capabilities, particularly for managing teams whose members didn’t fall under their formal authority.

Many said, however, that widespread adoption of the leadership approaches found in online games would require a change in most organisations’ cultures. Failure to achieve a goal on the first try is generally viewed as a learning experience in multiplayer games, after which you “reattempt with new knowledge,” according to one respondent. That’s in contrast to the corporate world, where, he acknowledged, “reattempting is hard.”

But games, and the generation that has grown up steeped in the game environment, may end up being catalysts for change in business leadership. This new crop of workers will bring with them — first as followers, then as leaders — game-informed notions about the best methods for leading.

Ultimately, the entire workplace may begin to feel more gamelike — with game-inspired interfaces becoming 3-D operating systems for serious work — which could enhance not just leadership but all sorts of collaboration and innovation. At the very least, digitally enabled environments and techniques could increase productivity by making many aspects of work simpler, less tedious, and — dare we say it? — more fun. That wouldn’t necessarily be a bad thing.

© Harvard Business Review

Byron Reeves is a professor at Stanford University and a cofounder of Seriosity, a company based in Palo Alto, California; Thomas W. Malone is a professor of management at MIT’s Sloan School of Management in Cambridge, Massachusetts; and a co-author of “In Praise of the Incomplete Leader” (HBR February 2007); and Tony O’Driscoll is a professor of the practice of management, innovation, and entrepreneurship at North Carolina State University’s Jenkins Graduate School of Management.

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