The Education Business Blog

Distilling the range of policy positions on our current economic malaise is a huge challenge, but fortunately Rortybomb is up to the task. I recommend his post - A Topological Mapping of Explanations and Policy Solutions to Our Weak Economy.

Not only does he provide spiffy venn diagrams that distill people's positions he also provides extremely useful links to articles that lay out those positions.

As a business leader I recommend this post for those wanting to dig deeper on what the road ahead might look like for our organizations.

As an education publisher I recommend it for those seeking outstanding examples of web articles that would be useful in the classroom. While he has strong opinions he isn't afraid to provide a platform for those with other opinions to put their best foot forward. This one post could serve as the foundation for 2-3 weeks of a high school econ class.

As a citizen I just want what Jessica Hagy outlined in her inimitable way over at Indexed

I just wish DC would get on with their job.
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There are bad ideas that become iconic for every era because they were popular fads. Pet Rocks, the Pacer, Supply Side Economics, and .com groceries all come to mind.

Looking back we all scratch our heads and wonder - why?

Gamification, ripping the reward and recognition systems out of video games and applying them to behavioral modification is likely to stand in for our current times in the future.

In the attention economy everyone wants stickiness, products that get used a lot. Some of the stickiest products ever invented are video games. World of Warcraft has a whole genre of humor dedicated to how obsessive players are. The list of sticky games is long, Whyville in education and it's many spawn like Farmville on Facebook come to mind.

The most common elements in gamified applications are:

• Achievements and Badges
• Leader Boards
• Progress Bars
• Virtual (or real) Currency
• User Challenges

Gamification is all the rage right now with entrepreneurs and VCs. They are building products for wellness and health, email management, location awareness, sleep management, homework, to do lists, prayer, and just about any sphere where people want to change themselves or manage processes that are boring.

Please make the stupid stop.

Personal Experience

The opinions expressed in the column were earned through experience. Like many in the education game community, I was initially excited about extending the power of games to other contexts. But as I used these tools I found that they could spur a week or two of use but they lost their punch quickly and faded away. After the 5th application the pattern started to emerge.

I've been using. Weight Watchers excellent iOS app for a couple of years now. It is useful and well designed with plenty of what could be considered game like elements. But it is not a game. Tracking your food necessary for success but is still a chore. I never stayed up until 1 AM trying to get to the next level of weight loss (hmm but maybe I should...).

Based on my experience there are three fundamental errors that underly the rush to gamify everything.

You Are Unique - Just Like Everyone Else

The first error is assuming everyone responds the same way to game mechanics. There is quite a bit of literature on the different styles of gameplay most of which builds on Richard Bartle's work. Anyone who has spent a meaningful amount of time in the on-line game arena quickly identifies with Bartles four categories of Achievers, Explorers, Socializers, and Killers.

Simply put. gamification only works on a sustained basis for a subset of the population - it is not a universal panacea. Not only that but the Achievers often play for the recognition of the other groups - so only focusing on this one group omits the necessary context of Achiever's motivation.

Systems Theory

The second error is assuming that you can separate the reward system from the other elements popular games and have it work. Non-gamers, most of the people throwing time and money at this problem, see the reward systems in games and make the assumption that you can simply repurpose the badges and achievement trees elsewhere.

If you took a steering wheel and handed it to someone who knew nothing about cars they could describe in great detail what it is. It is round, hard, ridged, has a stem, and there is a large bag packed into the center. What they couldn't tell you is what it does. Context matters for true understanding.

Why is it round (human arms), why is is it ridged (human fingers), what does that stem do (control of other front end systems), why is that bag there (human lives). None of those things make sense without understanding the human and other machine components of the larger system.

If you want to understand game reward systems you need to play a lot of games so you can grok the context.

Conversely if we hired a master mechanic and told them to go buy the best example of every car part we would not end up with a functioning automobile. Systems design also has to apply to context. Our steering wheel has precise dimensions so that it attaches properly to the steering column and provides proper sight lines to the speedometer.

Bolting cutting edge game mechanics onto bleeding edge mobile apps does not a useful thing make (usually).

Remove reward systems from games and you do not have a functioning mechanic. Even an extremely well designed gamification system out of the context of the rest of the game has no sustainable use. You might get short term gains but only the obsessive compulsive Achievers will stick with it. (That is a market segment, but not the one everyone is shooting for.)

Game Contexts

There (at least) three contexts in games that interact with the reward elements in ways that make the overall system work. The true value lies in how the components ALL interact. I will refer to these as components but in practice they are nested systems themselves with their own internal dynamics.

Narrative context - scratch 90% of gamers and they tell you that they engage with the story line of the games they play. In a casual game it may just be that the birds are angry, in an MMO it may be an intensely co-created universe like Eve Online. Since so many of these involve elves and rescuing princesses or invading alien bugs non- gamers too easily dismiss what they see as silly window dressing. Don't. At one level the reward system is the marker for your progress through the narrative. It makes the immersion more immediate and reminds you of how far you have progressed.

Social context - we are social and competitive beings. These two elements are linked. It is hard for me to sustain competitive fervor against people or groups that I am not socially close to. Trust me on this one, I'm a Red Sox fan. Or pick any college rivalry. Why is Words With Friends so compelling? What keeps people playing World of Warcraft for years on end? It is the relationships and the rivalries, some friendly some not, that emerge from playing together. Competing with random strangers to be "mayor" of a local coffee shop isn't a sustainable business model. The novelty wears off and we drift off to places where we can truly interact with other people.

Fun context - last but not least game reward systems are situated inside of an activity that is fun. Taking a boring chore and bolting game mechanics on it doesn't make it any less boring or any less of a chore. Put another way, sober up a horse thief and you've got a sober horse thief.

In many ways these relate back to the other three categories identified in Bartle's work - Explorers like engaging with the narrative, Socializers revel in schmoozing, and Killers play for the joy of offing competitors. All rely on the presence of the others to get the full experience.

Conclusion

Education and learning in a school setting is a long term project not subject to quick fixes and panaceas. It would be a mistake for Education Publishers to embrace gamification without the larger contexts of games. I passionately believe games can make a huge difference in learning, but we need to embrace all the elements for it to work.

I'm not saying reward systems can't be well designed , but you can't just take the game elements out of context and have them work on a sustainable basis.

For he that gets hurt
Will be he who has stalled
There's a battle outside
And it's ragin'

It'll shake your windows
And rattle your walls
For the times they are-a-changin'

Bob Dylan

Recently PCI's Executive Team went offsite for a day to reflect on the state of the market and the business. When we stepped back and were rigorous about cataloging the all the affected parts of education publishing I was surprised at the breadth of disruption already under way. More is on the way.

We used Michael Porter's Competitive Analysis as a foundation for our discussions. Close reading of this book will get you 50% of an MBA (i.e. fancy ways of saying buy low, sell high). It is accessible to the general business person and provides a framework that has stood the test of time.

Porter posited that there are five fundamental forces that act on an industry and that a change in any one of them can force a realignment. Our analysis surfaced changes in ALL 5.

Porter's Model Applied to Education Publishing

I've highlighted some of the more significant changes we face as they relate to each force. I've ranked them according to the degree of change we expect to see from each force.

Threat of new entrants. Are there new players entering the space with different business models, product offerings, or marketing strategies?

• Technology players are entering the space in large numbers funded by Venture Capital and inexpensive toolsets.
• Privatization players are expanding the Charter School Market. Some of these are writing their own curricula.
• The industry is globalizing.
• The iPad and Andriod tablets are coming.

Threat of substitutions. Are there products that satisfy the same function but which are in different industries? If they have a cost advantage watch out.

• Open Education Resources are becoming more sophisticated and better organized. These products are free and funded by large infrastructure companies trying to create demand for their products (e.g. Oracle, Apple, etc.)
• States and Universities are exploring bespoke curriculum independent of publishers. Common Core could fuel this change.
• Wiki's and other web based resources are serving as repositories of static information (traditional role of textbooks). See iPad above..
• Parents are taking a more proactive role in securing learning services outside of school

Rivaly amongst the players in the industry. For example, process improvements in one company can force others to respond or face a cost disadvantage.

• Competition for scarce dollars post stimulus will increase the aggressiveness of marketing.
• Education is largely a zero sum game, so as new well funded players enter they will drive for share by competing on price.
• Digital production processes allow smaller players to match the development cost basis of large publishing houses.

Buying power of customers. Are there changes in how they purchase that give them more leverage over the industry?

• NCLB forced consolidation of decision making at the district level. This has changed both what is being bought (more comprehensive solutions) and how it is being purchased (more RFPs).
• Disruptions in the adoption process due to short term funding crises may become permanent as technology permeates schools.
• Common Core may give rise to new consortia to counter balance the traditional big 3 states (CA, TX, FL).

Buying power of suppliers. Are their inputs critical to you but insignificant to them?

• Consolidation of large publishers has created a large cadre of editorial and design professionals who are doing work for hire.
• Indian and other low wage spots are competing for production work.
• Technology specialists are in high demand as companies transition from print to digital.

That is a boatload of change. And it is accelerating.

We've all wrestled with each of them at one time or another over the past 4-5 years so there isn't much here that should be a surprise to anyone in the industry. But I hadn't sat down and put them all up on the board at the same time. That was a sobering moment.

We Are Not The First

The only thing new in this world is the history you don't know. - Harry Truman

It isn't much of a consolation but we have witnessed other intellectual property based businesses stagger through digitization. Trade books, newspapers, movies, and music have already walked the path we are setting out on. There are many lessons we can learn from their mistakes.

Some of the lessons I take from their experience are:

• Pricing models will rationalize to the unit of appreciation
• We need to learn to co-exist and compete with free
• Focus on your true value-add (there is still high demand for music producers)
• Distribution still matters, even if it changes
• Nothing ever goes away in the classroom, but new tools are added all the time
• New entrants usually under-appreciate the scale at which education works
• Institutional buyers will not act like consumers (the iTunes fallacy)

There are more - but the key is to pay attention to what is happening elsewhere. I've found blogs to be the best source of insights from industry insiders.

What To Do?

Let him who would move the world first move himself. - Socrates

Every company will have to chart their own course through this maze. One of the advantages of a massive realignment is that there will be lots of room for experimentation and exploration. We will see a flowering of business models, product concepts, and distribution networks as companies scramble to stay ahead of the curve in the coming years.

Sadly, we are also likely to see venerable companies unable to adapt.

The most important thing is to raise your own awareness of the forces of change and to think before you respond. Can you proactively get ahead of the curve? Are there defensive moves to buy yourself time? Do you have the right resources to survive? What do you know that the new guys don't?

Bottom line - map out a strategy and then make sure your company is fully aligned to executing it. You may need to invest in training, you may need to overhaul your production process, you may need to secure financing. You may need to do all of this and more.

Half measures will avail you nothing.

On that note lets have a young Mr. Dylan play us out where we started. The original - still the best version.