Cover Story: Not just fun and games

Andrew Lau, founder and CEO of Think Codex Sdn Bhd, got into gamification because Shell did not have enough in its budget to send its employees to a nice holiday destination for a team-building exercise as well as hire a team-building company to manage the event. It was one or the other. So, he was pulled from his role in finance and procurement to come up with suitable activities.

Now, Lau had secretly considered most team-building activities a waste of time. After all, how does a treasure hunt help you deal with the day-to-day situations at work?

Being a computer science graduate of Universiti Putra Malaysia (UPM), and something of a gamer himself, he decided to do things his way when designing activities for his colleagues. That is why, when 200 Shell employees from all over the world descended on Pangkor Island, they found themselves faced with team-building activities like no other.

“We came up with project management simulations. We had teams from all over the world — Europe, the US and the rest of the region — and we learnt how to work together. It was quite fun and everyone enjoyed themselves tremendously,” says Lau.

In fact, the experiment was so successful that he was sent to Amsterdam to arrange something similar for 150 of the company’s senior leaders from all over the world. “I basically recreated Shell’s entire supply chain with oil exploration, retail outlets, customers ... The teams formed different oil companies and fought each other to gain market share and oilfields and deliver what the customer wanted. We kept changing the economic environment because that was how it worked [in real life],” he says.

“Basically, our simulations mimicked the energy environment and all the realities and challenges that came with it. The winning team was the one that was most profitable. And, obviously, there was a debriefing after that.”

Although Shell appreciated his efforts, this was still a side role for Lau in the company. Observing the way participants became so engrossed in the simulations he had helped design (the facilitators had difficulty kicking the participants out of the room for lunch and tea breaks and had to resort to switching off the lights in the training rooms), he believed he had stumbled on something potentially very valuable.

Lau went from Shell to Leaderonomics, a leadership development company. “At Shell, I was merely an employee. But at Leaderonomics, I managed a department, one that dealt with scholars and those with high potential at corporates. I had to ensure that the department was profitable. So, it was a step up,” he says.

While Lau was at Leaderonomics, he was sent for leadership training in Hong Kong. During the programme, he had to pitch something related to his dreams and he came up with the idea of a training company that specialised in gamification for corporates. The investors liked his idea. So much so that two of them (one from the US and another from the Netherlands) actually decided to invest RM350,000.

And Think Codex was born. Lau returned to Malaysia, quit his job (after securing a contract from Leaderonomics) and got going. Then, followed the typical story of anyone starting a company — the crazy hours, staffing issues, putting out fire after fire while trying to get some proper systems in place and combining the agility of a start-up with the business processes of a corporate.

“The most fraught time was when I had two six-figure projects on hand and all of my employees got poached by two multinational corporations within a month. At the time, I felt alone, like literally, alone. I am not a quitter, but there was this feeling of hopelessness because even if I managed to recruit new people, they would still need time to turn things around. And it is not like I could walk into any university or hire a consultant from PwC with the requisite skill sets,” he says.

Lau went on a panic-hiring mode and made a couple of mistakes. But mainly, he had to carry the weight of the design on his own shoulders. Most of his new hires learnt fast and came through, so he was able to deliver both projects. “It was very scary because a small company like us cannot take a reputation hit,” he says.

From the get-go, Lau positioned Think Codex as an international rather than a local company. That is why he registered a domain name with a .com rather than a .my. He also sent his team for international competitions so they would get used to competing against companies from other countries, and they brought home gold awards.  To underline his standing in the international gamification community,  Lau was recently appointed chair of the International Gamification Confederation.

Think Codex created business simulations and licensed them to training companies, on top of its own direct sales to end users. “We are not your typical training company because we have our own IP (intellectual property). We licensed our simulations to partners in Singapore, Thailand, India, Indonesia and Cambodia,” says Lau.

This year, the company is expanding to Japan, Taiwan and Europe. Next year, it is looking to enter Latin America, he says. “I go for international conferences and I work with a number of people across the region. We work with big consulting firms like Korn Ferry and we co-design with international business schools such as the Melbourne Business School and IMD.”

Lau says gamification is 80% psychology and 20% games. “A lot of people think it is merely about turning everything into games, but that is not true. It is not like suddenly turning your internal employee platform into games that people can play to get more engaged.”

What does he think makes games so addictive? “One part is the graphics, the mechanics of how things work, the levels you have to conquer. But that is what we call ‘the 20%’. Behind it, there are things called motivational science, habit-building models, behavioural economics and skills building — all of which are scientific fields on their own. And of course, there is the whole area of game theory,” he says.

“This is how you get people engaged and this is how you get business results. It is not the games per se. The games are usually designed after you manage to understand the psychology of the people in your organisation.”

Lau says Think Codex’s new generation of simulations focus on habit-building. “The only way to achieve business results is if you change the behaviour of your people. The only way to change the behaviour of your people is to have them repeat actions because repeated actions become habits and habits shape behaviours. But you want the actions to be benchmarked against a target skill set or competency. Otherwise, you form bad habits.”

The people are split into teams and each member is assigned a particular role. The teams compete for revenue or awards and they play in a game-like environment. Each member of the team manages something different such as people, resources, money, morale and projects. It is all done in a fast-paced environment and you learn how to make business decisions.

The simulations are so addictive that the participants often become too engrossed to stop for their lunch or tea breaks. The feedback ratings are usually high, between 4.5 and 4.7 out of 5.

What makes the games so effective? The psychology behind it. It is such a complex subject and Lau does not spare himself (or his people) from delving into and understanding all of the different aspects of designing games.

“But it is all about understanding what makes humans tick and how, if you do certain things, you can expect certain types of results. And that does not mean just creating a game because there are also lousy games.

“A lousy game can be fun to play but it does not engage you on an intrinsic level,” he says.

The game has to be suited to the level of the employees because each level or age group has its own set of motivations. “For more senior leaders, the games are more about what we call ‘philanthropy’ or giving back. You do not need to give them games based on accomplishment because they are already there. Whereas for younger people, we use more exploratory and accomplishment-based games because they still have to make their way,” says Lau.

Consequently, simply designing a nice game and giving it to the wrong target group will not work. “Because if you design a game for the C-suite and tell them it is about going up the ladder or achieving levels, they will not be interested.

“Of course, if you do the reverse and design a game all about sharing for younger corporate people, they will find it very boring because at this stage, they have nothing to share. They want action and they want games that have deliverables, where they can go up levels,” he points out.

Because the company is now selling its products in various markets around the world (at the time of the interview, one team had just returned from India, where it helped a partner roll out across five cities), Lau has to travel a fair bit. “And not only that. My team also travels. We currently have eight people and half of them are designers,” he says.

Is he looking to hire more? Not quite. “We have a business model that is built to scale. So, once we do what we call ‘capability transfer programmes’ with the partners, we train their sales people and trainers and then give them the product. After that, we do not have to help them anymore. They come to us for advice from time to time. But basically, we set them up to run by themselves,” says Lau.

“Our simulations are not like bubble tea, where you need to constantly buy raw materials from the supplier. We give anything consumable to them so they can take over and do it themselves. We earn money through licensing.”

Does it pay? “Yes, it is profitable because we do not have to produce raw materials for the product. It is just like software-as-a-service, where they just build the software and scale. So, apart from the one-time fabrication of the game, they can use it for years on end and we do not have to keep supplying them with the game,” he says.

“I mean, it is just like Angry Birds. They do not have to keep on creating new products. They just update the present version. And those who want the premium version can pay for it. That is the way we work as well. So, content — or the IP — is the profit driver.”

Lau set out to prove that a completely Malaysian company could attain global status. “We have competitions against companies from the US and Europe. In some of these, we are the only Asian company among the finalists,” he says.

“I push the design team by putting them up for awards at that level. I am not saying that we, or our company, are special. But we are Malaysians and we have been able to achieve all these things. At the end of the day, Malaysians are a very talented bunch.”

Lau’s own story is pretty interesting. He went to what he calls a “normal” school in Penang, Pykett Methodist Primary School, and then Methodist Boys’ School. “I was a product of the national school system and I loved it because I could mix with everyone and had a lot of great friends. I then went to UPM, where I studied computer science.”

The truth is that he could not afford to study overseas. But he is philosophical about the whole thing. In fact, having to shift for himself and make his own way gave him the talent for improvisation and being a quick study.

After classes, Lau worked at a little shop in Shah Alam, assembling computers according to the customer requirements. “Basically, a customer would say he wanted a gaming machine, for instance. We would tell him, ‘Use this processor, this memory, buy this tower, this motherboard and this graphic card.’ And we would build the computer for him,” he says.

Lau also worked at McDonald’s when he was in university because he wanted to understand what made it the No 1 fast food franchise in the country and region. “That was where I learnt about things such as SOPs (standard operating procedures), management and customer-centricity,” he says.

“I was only paid RM2.25 an hour. Nowadays, even a barista earns at least RM9 an hour. But I wanted to learn. And I did. I learnt that McDonald’s is not about burgers.

“When you buy into McDonald’s, you are buying into a system. The burgers are the output of the system. So, you are buying into the supply chain, the IT systems, the machines, the branding mechanics, the sales engine. That is why people pay RM1.2 million for the franchise up front.”

When Lau graduated, he joined a local company called Galaxy Automation and sold office supplies. “I believe that your first role should be related to sales. I mean I am a computer science grad, not even from a business background, but I believe that in life, you should learn how to sell,” he says.

But Lau was not content to remain in a local company. He had set his sights on wider horizons, which was why he applied to Shell. To his surprise, it was his local education that tipped the scales in his favour.

“Interestingly, I was up against a lot of candidates who graduated from overseas universities. My interviewer said one of the reasons she chose me was because I came from a local public university. She said that in these universities, you learn a lot about resilience and independence and how to do things for yourself,” says Lau.

He was at Shell for seven years, during which he cycled through a variety of roles — finance, project management, procurement, marketing and, finally, he was the country brand manager for RON95. Then, he wanted to do people development, so he moved to Leaderonomics.

That was where Lau learnt about the people side of business and decided to create something scalable in this area. He needed a product. “Products scale. Services are very hard to scale,” he explains.

As Lau was tackling a greenfield, he had to learn everything from scratch. Luckily, reading hundreds of books only related in some way to the subject was not a problem for him, although he is quick to point out that he is more street smart than book smart.

“I read pretty much everything, from process improvements to … everything. Dragon’s Den, Purpose-Driven Life, Think like a Freak — some books were more mainstream and others, not so much. I read a lot of Malcolm Gladwell and Simon Sinek,” says Lau.

When he finds a book really interesting, especially if it relates to behavioural science and habit-building, which is a core premise of the company, he buys it for Think Codex’s library and it becomes required reading for his staff.

Lau points out that he and his staff had to learn in a rather unorthodox manner because there was no one, at least in Malaysia, doing quite what they did. “You cannot go to a department store and look at samples. It is not like we are making cereal, where you can just buy a bunch of cereals and deconstruct them.

“All we know is we have to create something to address a particular set of competencies. But the way there is full of ambiguity. When we interview our designers, we ask them how they deal with ambiguity because a lot of people shut down, a lot of people give up. To be part of our design team, you need to embrace ambiguity, you need to be comfortable with it because you need to create things.”

He believes that his products have caught on, not because the games are addictive but because they really work when it comes to addressing business outcomes. “After one of our customers, a Fortune 500 company, went through one of our sales simulations, its sales increased 266%. Did we teach them rocket science? No. We used habit-building models, broke down their existing habits and relaid them with new habits.

“Essentially, we put the triggers they faced in the outside world into our simulations. And we taught them a new way to respond to the triggers. This is done in a safe environment, where they can get feedback from their ‘customers’.

“So, when they go out and face the same triggers in the real world, they will automatically apply the new habits that we laid on them. By the end of our simulations, they have already formed very basic new habits.”

There are three elements to a successful training programme — cognitive retention, confidence retention and conduct retention. “First, you must remember what you have learnt. Second, you must have the confidence to try it out. And third, you practise what you have learnt,” says Lau.

While all this sounds good on paper, he says it actually translates into business results. “Some of our clients have gone on to win regional awards because of their improved business results. That is because when you build habits through our simulations and go back into the workplace, your behaviours change.”