Company Core-Value List: Fun and Games?

BOSTON (TheStreet) -- Dan Hoffman dealt with the economic downturn by turning his company, M5 Networks, into a summer camp of sorts. It was a fun-and-games business technique that pushed employees into personal conversations with their clients, garnering a big increase in customer-satisfaction ratings.

The recession struck a direct blow to M5 Networks, a New York-based company that sells voice-over-Internet-protocol products and services. M5's clients pay on a per-phone basis and, so when the unemployment rate rose, phone orders fell.

"We literally lost millions as our clients downsized their staff," Hoffman, the company's chief executive officer, says. M5 downsized some of its own staff in the fall of 2008.

Last September, everyone in the company participated in a mandatory scavenger hunt, in which M5 employees were required to work in teams and, more importantly, to interact with clients face to face. The idea was to force customer relations at a time when most people have become accustomed to communicating without speaking.

Verbal communication is on its way out, studies show. ABI Research predicts that mobile-voice revenue will reach its peak this year, while text messages and the mobile Internet are gaining ground. Worldwide email traffic is expected to grow from 247 billion messages per day in 2009 to 507 billion messages a day in 2013, according to the Radiati Group, a market-research firm in Palo Alto, Calif.

But direct communication can be better for business. And so can fun. Hoffman cites as a role model Amazon.com's ( AMZN) shoe-selling subsidiary Zappos, which requires new employees to complete a four-week customer-service training course, during which they receive a full salary. (A week into the course, the company offers employees $2,000 to quit, with the logic that if they do, they probably wouldn't have been enthusiastic about interacting with customers.) Zappos also sports 10 core values. Number three: "create fun and a little weirdness."

Hence M5's scavenger hunt. "The purpose was to bring our people closer to our clients," Hoffman says. "Little games reinforce important business objectives."

Items on the scavenger-hunt list included proof of "a team member trying to invest 100 New Zealand dollars in one of our hedge-fund clients, and being refused," and a video of a cleaning from one of M5's doggie-hotel clients.

M5 also hosted an essay contest on the subject of corporate honesty. The winner won a trip to Space Camp in Huntsville, Ala.

"It was an important time to do all this stuff because everyone was grouchy," Hoffman says, referring to recession-era melancholy.

In addition to boosting morale, the games garnered quantifiable business results. M5 measures customer satisfaction according to Satmetrix Systems' Net Promoter Score system, which is based on a customer's likelihood to recommend a product or service to a friend or colleague, on a scale of zero to 10.

The Net Promoter Score, or NPS, is calculated as the percentage of customers who are "promoters," meaning they rate the company 9 or 10, minus the share who are "detractors," those who rank the company a 6 or lower. During the year of games, M5's score rose from the low 30s to the low 40s.

By way of comparison, the average NPS in the Internet provider industry is a dismal 4%, while the average in wireless-cellular services is 22%, according to a report released last week. AT&T ( T) scored a 6%, while Verizon Wireless ( VZ) got a 41%. Zappos can boast of a whopping 83%.

Hoffman says that, especially in a recession, it's important that competitive games within a company are more educational than cutthroat. "It's overall mood that matters," he says. "We really did have to clear the decks so that people didn't feel like they were competing for their life."

-- Reported by Carmen Nobel in Boston.

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