Today I'm going to tell you the story of a game so serious that it changed the direction of a company. And I'll also talk about an even more serious game - the game we're all playing with the future of the world.
The story of the first game starts four years ago, when we at McDonald's realized we were facing a crisis. In short, our numbers were not looking good. So we did what a lot of companies do in such cases.
For one thing, we revamped our image.
For another, we undertook to become a more visibly responsible company, and adopted a platform of Corporate Social Responsibility, or CSR - just like Nokia and BP, who are also represented at this conference.
Much as Nokia have pledged not to exploit Far East workers, and BP are exploring alternative fuels, so we responded to various critics by looking "beyond beef" on our menus, trying new packaging, and even experimenting with environment-friendly refrigeration.[i]
But we needed something bigger as well. We needed to understand what was happening to us in the marketplace - so that we'd never be so vulnerable again.
The US military had just released a game called America's Army, a multiplayer combat simulation that had started as a training game.
We in Interactive found the idea inspiring. McDonald's too was engaged in a kind of combat - so why not do what the army had done, and develop our own simulation of the fast-food marketplace, within which young executives would battle it out? At the very least, it would give those groomed for leadership the chance to make some mistakes in the virtual world instead of the real one. And more importantly, watching scenarios unfold within a well-modelled marketplace would help top management understand how best to survive within it.
This is the game that resulted. Players adopt the avatar of a fast-food company, and make business decisions in highly accelerated time. The game calculates the effects of those decisions on the overall market, collates them with other players' decisions and rewards the best players with profits.
Right from the start, many new executives said it was helping them to make quicker, smarter decisions in the real world.
Unfortunately, watching gameplay was not yet providing upper management with much information. What was needed was more accurate modelling of reality - i.e. better sims.
First to be integrated was a sophisticated economics package developed at MIT.
Next, the "Externalities" module was augmented with a sophisticated environment sim.
These modules definitely improved the realism. But at the next iteration, in April 2003, a serious problem emerged. We'd just updated the environment sim with a full-fledged GCM, or Ocean Atmosphere Coupled General Circulation Module, that reflected the latest scientific thinking on how the global climate works.
Suddenly, there seemed to be a limit on the length of a game; at anywhere between fifteen and a hundred and fifty game years, games ground to a halt - often for all players at once.
Sometimes, regional temperatures would swing to extreme hot or cold. More often, global sea-level would start rising uncontrollably over the course of a decade, ruining pasture and cropland, destroying low-lying restaurants and destablizing society so that many other restaurants ended up being looted, or so that no one around could afford hamburgers anymore.
It was as if this had happened to every coastal city, and not just New Orleans.
At first we thought we had a bug. But the scientists who had provided the module said it was normal, and suggested several factors of gameplay that might be increasing the likelihood of these abrupt changes.
- Accelerating beef production was raising the levels of greenhouse-gas CO2 considerably, through burning of forest and pastureland, for example.
- Ever-increasing transport needs were also generating more CO2.
- The ever-more-numerous cows were generating many millions more tons of methane, a greenhouse gas dozens of times more powerful than CO2.
- The production of animal feed in the Amazon was deforesting one of the primary sources of CO2 absorption.
- These activities were cueing the simulation of other industries too, leading to more gas production there as well.
In sum, these effects were raising temperatures to the point where the model's delicate climate balance was upset, and abrupt changes grew more and more likely.
To avoid these bad endings, the scientists told us that players would have to cut their emissions by at least 70% in the first five game years. They'd also have to completely stop agricultural deforestation.
Our first thought was: these bastards, selling us a module which ended the game and made the whole thing a whole lot less fun. Our impulse was simply to change the parameters of the GCM module, or even remove it. But accuracy had been what we'd wanted, after all, and the scientists were telling us that the sim was being quite accurate. In actual fact, our current policies were going to lead to catastrophic problems, at least in combination with the actions of all other companies. Could we ignore a morbid truth just because it interfered with our sense of fun gameplay?
We tried to tell the players to do fewer of the things that were leading to calamity - to reduce emissions, stop cutting forests, etc. But they didn't. Even if they knew what was going to happen, they invariably ended up playing to win. They might hold out for a while - but as soon as one took off towards greater profits, the rest did as well, so as not to be left behind and lose the game. What fun would that be?
Finally we hit on a solution. There was one element in the game that hadn't yet been really simulated, and that was legislation. Up until now, laws had been minimal - essentially just zoning restrictions, limits on the number of franchises in a neighborhood, that sort of thing. We greatly expanded the ruleset:
- There was to be no deforestation whatsoever
- Only 30% of previous emissions would be allowed - no easy-out "emissions trading," either.
- "Real costs" of throwaway materials, etc. would be charged as taxes, and there was also a "hard-coded" limit as well.
Any violations of these rules would be penalized heavily, and a "third strike" could result in the company's dissolution.
It worked. Players found ways to grow food locally, shift the menu from beef to grain products, replace all packaging with reusables, etc. And although profits were immediately lower, and the heady frenesy of earlier versions was lost, at least the games lasted beyond the century, for the most part. As a side effect, the economics sim showed global poverty and hunger going down.
Although top management didn't react, many of the new hires who played it did, and took the results to heart. Many of them came to feel very strongly that our actions as a corporation were indeed helping lead to a global meltdown, predictably and inexorably - and they wanted to do something about it.
These executives had all been trained to believe that doing good was as much a part of the McDonald's mission as doing well. Now they felt that if the corporation was to remain true to its principles, and to its CSR commitment, it had to do all it could to make sure that government fulfill its role and institute a sane set of laws.
We in the Interactive Division agreed, and together, we got down to business. First, we organized a series of in-house conferences with climate scientists to educate top management about the dire need for effective government regulation.
And those with connections to government began "feeling out" the possibilities there, as a first stage in a potential sustained lobbying effort.
Unfortunately, both avenues were less than successful.
At the Board level, only our CTO Mr. Grossman here is willing to take a strong stance for change. No one else.
As for the leaders in government, many of them told us that though they understood the issues, there was no way to go in such a new direction without strong popular pressure behind them.
So now what? Will we stand by while we know that our activities are helping lead to catastrophe? No. We believe in CSR, and so if popular pressure is what government needs in order to change, then we must help generate popular pressure.
The concept of Abrupt Social Change, or ASC, is an old and respectable one, a shortcut from rationality to the nerve centers of power that has often accomplished what more systemic approaches cannot. The British Occupation of India, the Vietnam War, even feudalism in Europe were only ended through ASC movements.
And just as governments and NGOs have sometimes assisted ASC movements abroad, so we can be a force for Abrupt Social Change here at home. We in the Interactive Division are using all of our autonomy within McDonald's to do so.
1. For one thing, we are appealing to McDonald's franchisees to allow their restaurants to serve part-time as meeting areas where plans for mobilization can be developed, hatched, and acted upon. We have commitments so far from seven owners in Decatur, Illinois, Tucson, Arizona, and Troy, New York.
2. We will offer direct financial assistance from our divisional budget to groups actively involved in effecting ASC, within or outside of franchisee restaurants.
3. We will help develop technologies useful to mass mobilization, such as the cell-phone text broadcasters so useful in the Ukraine in the recent Orange Revolution. As for McMarketplace, it will serve as a tool to explore methods for change, and to learn just how governments might be forced to adequately control corporations.
Again, we strongly feel that legislation is indeed our only hope, and what we must fight for via Abrupt Social Change.
"Ethical consumerism" or other market-based approaches will not help. A recent poll showed that 83% of UK consumers intend to purchase ethically on a regular basis; 5% actually do. And boycotts and other forms of consumer pressure are valiant but ineffectual, capable of producing only momentary, localized changes in corporate policy. As for "ethical investment," its potential is sadly quite small.
No, economic forces won't save us; there's a reason we have governments, voting, and laws that must be obeyed. But since governments won't create the right laws without popular pressure, helping to generate that pressure is the only responsible choice, the only true CSR. Anything else is a milquetoast half-measure - a trivial improvement to a sinking ship, serving only to reassure passengers.
BP spends a tiny percentage of its profits on solar power while continuing to pump vast oceans of oil into the world's cars, airplanes, and atmosphere. You call that CSR? I call it a marginally more polite form of world annihilation.
We in the serious software industry have a powerful tool at our disposal. We can use it to change the world, or we can use it to serve suicidal corporate policies. We urge all of you here to join us in choosing the former, cost what it may.