Since Gamification emerged ten years ago there has been a lot of headlines and hype. Its promise for businesses is a set of techniques that are affordable, relatively easy to implement, and that can significantly increase customer and employee engagement. But the question for leaders is simple: does it really work and if so, how can we use it? Not just in big projects or initiatives, but day-in, day-out. In other words, why should we care?

You may not know it, you may not have recognized it when it happened to you, but the chances are that you have already experienced gamification. If you have a loyalty card from a retailer, belong to a frequent flyer scheme with an airline or are a member of LinkedIn, then you will have been on the receiving end of a gamified process.

Contrary to popular belief, gamification is not the use of games. In fact, it is not really about games at all. It is the use of a variety of methods and techniques to make activities as compelling and engaging as possible. The only reason it is called gamification is that the video gaming industry was the first to master these techniques. Games generally have no other purpose than to keep people engaged and happy. So over the years, games designers developed a range of methods to ensure this engagement and keep people playing. What gamification does is simply take the best practices that games designers have mastered and apply them to other activities we want people to feel engaged with.

Does it work?

There is no doubt that some of the early headlines about gamification were overhyped, effectively positioning it as a solution to all problems. There is also no doubt that in the rush to use gamification, it has not always been accompanied by a strong understanding of how it works. But overhyping and poor implementation should not mask the fact that there is some pretty solid evidence that when gamification is done well it can be a highly effective tool.

To begin with, there is now a strong bed of independent academic research that shows that gamification techniques can have a significant positive effect on people’s level of engagement with particular activities. There is also a growing collection of case studies demonstrating the real life impact of gamification. Ford, for example, was one of the first firms to use gamification to support employee learning. It needed to increase employees’ engagement with an online training program, which relied on people proactively looking at the content and driving their own learning. Through the use of gamification techniques employees’ use of learning materials more than doubled. Or take the global telecommunications firm T-Mobile. In 2013, it gamified a collaboration tool used by customer service staff to share knowledge and identify solutions to customer requests. As a result, it saw a 96 percent increase in the use of the tool, which led to a 31 percent improvement in customer satisfaction scores.

So here is one very good reason why leaders should care about gamification: It can work. It can help make sure people stay motivated and focused.

How Gamification Works

Gamification works by creating reinforcers for behavior. It introduces elements into people’s experience of doing something that make them more likely to do that thing again. The most famous and common of these elements include points systems, membership levels and progress markers. So when you gain reward points on a retailer loyalty card for every item you buy, that’s gamification. When you get “leveled up” through increasing tiers of membership in an airline frequent flyer scheme (are you Platinum Elite yet?), that’s gamification. And when you see a progress bar as you fill in your LinkedIn profile, that’s also gamification. In each of these examples, Gamification is working by doing one of two things.

First, it creates and uses external motivators: rewards and sometimes punishments, too. In gamification, these are often self-imposed. People will nominate a reward to receive when they achieve something, or indeed a punishment for themselves should they fail (such as a donation to charity). Other times, the rewards are created for them. The awarding of points is a type of reward, as is the giving of badges or promotion to different levels. The training for the Six Sigma approach to process improvement is a good example of this, in which “belt colors” reminiscent of martial arts are earned for increasing levels of training, up to the rank of “black belt.” Reward can also come in the form of public recognition of success, which is why many gamification processes try to connect people and create an audience for progress and achievements.

The second way gamification works is by trying to enhance what psychologists have identified as the three sources of inner commitment – the reasons why we just find some activities more compelling. These are called autonomy, mastery and connection. Autonomy is reinforced by helping people track their progress and so see the impact of what they do: It gives them a sense of control. The desire for challenge and mastery is tapped into by setting goals, recognizing achievements, and creating a sense of competition. And connection is created by simply linking people to one another who can encourage and support one another.

How to Gamify almost anything

Some people think of Gamification as involving little more than reward systems, points and badges. If you want, you can use these. But for most situations and leaders, they will not feel relevant. So what are the lessons we can learn from Gamification about how to motivate and engage people that every leader should apply? Five basic rules stand out.

1.  Track progress

The most fundamental gamification methods is tracking progress – helping people to see how they are doing. It reinforces self-belief by showing people what they have accomplished so far. It appeals to their sense of mastery by showing how far they have to go. And it can reinforce willpower by reminding them of the need for progress.

Tracking progress is of course a standard part of every managers’ toolkit. But what we are talking about here is more than just annual reviews. It is the monitoring of specific behaviors on a far more regular level. For example, the leader we worked with who wanted to read more, but never seemed to find the time. So we asked him to start tracking his reading – recording each week how long he had spent reading. It was simple, but it helped focus him on what he was trying to achieve.

2.   Mark achievements

When you mark an achievement you are effectively rewarding someone for having done something, reinforcing their self-belief and making them feel good about their progress. And as any parent or dog-owner for that matter will tell you, sweets and treats – rewards – work. These do not have to be financial or even tangible rewards, either. Praise is free to give, and public recognition can be powerful.

3.      Use challenge and competition

The third thing you must do is target people’s desire for challenge and competition. Setting targets is one easy way to do this, as is creating comparison points with others. Naturally, this is not a motivator for everyone, but for many – if not most – it will be. As a method, creating challenge and competition is almost always combined with both tracking progress and marking achievements. Progress needs to be tracked to show how well someone is doing, and then once they have completed a challenge or competition, their progress is reinforced by marking the achievement.

4.      Create social connection

The next step is to create social connection. There are two reasons for this. First, knowing that other people are involved and can see us helps us maintain our focus on what we are trying to achieve. It keeps us true to our objectives. And second, most people like to be connected – they prefer doing things with other people. This is why video games have become increasingly social. They encourage players to share their performance with their social networks and try to connect them to other people who are playing the game and have been struggling to overcome similar game challenges. And you can do the same at work by simply sharing people’s progress.

5.      Use narrative

This final gamification method is also perhaps the simplest. Most video games these days start with some sort of narrative or story that gives players some context about why they should play the game. Many of them seem to revolve around saving the world, solving a case or even just helping a flock of very angry birds protect their eggs. They work because people like stories and – all things being equal – games with stories tend to be more engaging than those without.

So it can be very powerful to play to people’s inner motivation for meaning by placing a task or activity within a simple narrative. For instance, when discussing changes that people want to make, we always try to place them within a timeline story. We discuss how they have come to want to make this change now, at this point in their careers. We discuss how they have behaved in the past, and how they want to behave in the future. This is all very simple, and you may not even think of it as narrative, but it is placing the behavior change within a bigger story.

How Gamification can help

To many people the very word gamification is off-putting. It just does not sound very business-like or professional. It sounds more about having fun than getting things done. But gamification is not about games. It is about making sure people stay engaged in what they are doing. Most of the techniques it involves are not rocket science. They are simple and should be familiar to you. What gamification does is to package them up and use them as a more powerful whole.

Yes there are a lot of progress bars and point systems in many gamification systems. And you can use these if you want to. But what gamification really does is to remind us about what works in engaging people, and what we as leaders should be doing, day-in, day-out to help motivate and focus our people. And that is why all leaders should care about gamification.