IBM's Management Games

No fooling around: Big Blue is promoting a video game that could change the way companies develop leaders and manage projects

Thunder crashes, lightning flashes, and a camera zooms in on a shadowy, futuristic-looking, gray-and-black office. The camera follows a female avatar in slacks and a button-down shirt as she jogs from one cubicle to the next, up a spiral staircase, and across a high gangplank as dramatic classical music plays in the background. This YouTube (GOOG) trailer could easily be a plug for a new shoot-'em-up video game, or a slasher flick. Instead, it's promoting a video game called Innov8, which IBM (IBM) will start selling in September.

Yes, IBM. The computer giant says it received dozens of calls from potential customers after showing the video clip at a recent conference for clients. Designed to help tech managers better understand the roles of businesspeople, and vice versa, players go into a virtual business unit to test their hand at ventures such as redesigning a call center, opening a brokerage account, or processing an insurance claim.

War of the Worlds

The game will be available free of charge to universities around the world. No price has been set yet for corporate customers because it will depend on how much IBM has to change the game to accommodate a particular business process a client might want to improve. The game will be available online and will also be able to run on standalone PCs.

Innov8 is only one of several initiatives afoot at Big Blue to incorporate features of online games into business. On June 15, IBM will launch an internal competition, dubbed "War of the Worlds," to encourage employees to, for instance, start virtual businesses or meet with real clients through a slew of online games. Each member of the winning team will receive a Nintendo (NTDOY) Wii. The company hopes to use the exercise to determine which virtual ventures are best for specific business tasks or processes.

Why is one of the world's most buttoned-down organizations encouraging its people—and customers—to play games? IBM says that the skills honed playing massive multiplayer dragon-slaying games like World of Warcraft can be useful when managing modern multinationals. The company says its research supports that claim and it will release its findings the same day as its War of the Worlds contest.

Developing Leadership

While IBM's research may be aimed at helping to build its own consulting business, it comes at a time when there's a flurry of corporate experimentation in games. McKinsey & Co. is using video games to test recruits for leadership potential and assess their team-building style. Royal Philips Electronics (PHG) and Johnson & Johnson (JNJ), meanwhile, are using multiplayer games to improve collaboration between far-flung divisions, as well as between managers and their overseas underlings.

What distinguishes the latest corporate forays into the gaming world is the degree to which companies are tapping virtual environments to hone the leadership skills of their workers. By 2011, 80% of Internet users will have avatars, or digital versions of themselves, for work and play, according to market researcher Gartner (IT). By the end of 2012, half of all U.S. companies will also have digital offices or "networked virtual environments," adds Gartner. The online game world will become an important place to hold meetings, orient new hires, and communicate across the globe.

For IBM's new research, the computer giant tracked the leadership qualities of gamers with the help of Seriosity (a company that develops enterprise software inspired by multiplayer games), Stanford, and MIT. IBM also surveyed more than 200 game-playing managers at the company over a seven-month period. Besides IBM, there are several others, such as Joi Ito, a tech entrepreneur, looking at how managing fast-expanding "guilds," or teams, in multiplayer games provides a forum for trying out different corporate management styles.

"Management Flight Simulators"

The IBM researchers found that those who are deeply immersed in online worlds that link millions of players, such as World of Warcraft, were ideally suited to manage in the new millennium. They were particularly savvy at gathering information from far-flung sources, determining strategic risks, failing fast, and moving on to the next challenge quickly. "If you want to see what business leadership will look like in three to five years, look at what's happening in online games," says Byron Reeves, a Stanford University communications professor and co-founder of Seriosity.

One of the key findings from the research, says Thomas Malone, an MIT professor of management and Seriosity board member, is that companies need to create more opportunities for flexible, project-oriented leadership. In fast-paced games, people can jump in to manage a team for as little as 10 minutes, if they have the needed skills for the task at hand. "Games make leaders from lemmings," says Tony O'Driscoll, an IBM learning strategist and one of the authors of the study. "Since leadership happens quickly and easily in online games, otherwise reserved players are more likely to try on leadership roles."

The study points out that games can become "management flight simulators" of sorts, letting employees manage a global workforce in cyberspace before they do so in the real world. More than half of the managers surveyed say playing massive multiplayer games had helped them lead at work. Three-quarters of those surveyed believed that specific game tools, such as expressive avatars that can communicate via body language, as well as by voice and typing, would help manage remote employees in the real world.

Promoting New Products

IBM, of course, has every reason to stress the importance of online gaming. It's trying to fashion itself as the go-to consultant for business games, working with more than 250 clients. Although best known for its 24 islands in the online universe, Second Life, only 13% of all the work IBM does in games and virtual worlds is in Second Life. Earlier this year IBM established a separate unit for 3D Internet. And the results of the War of the Worlds contest may be compiled into a catalogue to be shared with clients.

For now, IBM's challenge is convincing companies that online games are more than just a frivolous pursuit. That's clearly one desired outcome of the study. But IBM also is pouring millions into developing what it calls "the 3D Internet," in the hope that corporate gaming will become the next lucrative online frontier.

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