infinite games

Infinite Games

In the last six months I’ve come across Infinite Games and a couple of other books, each of which are very interesting on their own, but which together have given me some new insights into agile as a whole. I actively use the concepts in my management seminars.

I want to share those and this is the third blog in this series. The first one about Humanocracy can be found here the second one about “Good to Great” is here.

There are at least two types of games. One could be called finite, the other infinite. A finite game is played with the goal of winning, an infinite game with the goal of continuing to play.

– Carse, James. Finite and Infinite Games (p.3). Free Press 1986. Kindle version.

In his book “Infinite Games”, Simon Sinek starts an unusual journey with what at first seems to be a very theoretical picture from game theory. I felt the need to nod at first while reading: yes, exactly, I thought so too. But then he gets to a point where I was happy with the result and comes to some more very profound realizations. Thus, from game theory, he arrives at a description of the current business landscape (from his point of view, of course, first that of the USA) and then at results that have a direct impact on concepts of management and leadership.

Winners and losers

We have become accustomed to seeing the world in terms of winners and losers. This strategy, for which we use the metaphor “finite games”, usually has serious long-term consequences for the way a company operates.

  • Finite games are played by well-known players. They have fixed rules. And there is an agreed upon goal that, if reached, ends the game. Many of these games are “zero-sum” games.
  • Infinite games have infinite time horizons. And because there is no finish line, no practical end to the game, there is no such thing as “winning” in an infinite game. In an infinite game, the primary goal is to keep playing, to keep the game going.

When we participate in an infinite game with a finite mindset, we miss an essential aspect of the game. We use arbitrary, often irrelevant metrics (like “the best”, “number 1 in sales”) that are not essential to long-term survival.

But more seriously, this approach affects the way we cooperate, the image we have of colleagues, triggering unintended consequences such as loss of trust, cooperation and innovation.

For businesses (if you ignore startups, which aren’t really businesses yet, but rather experiments that can lead to the creation of a business), their business environment is the literal definition of an endless game.

Simon Sinek vividly introduces this distinction with an example of two product presentations (in this case, Zune and iPod) by Microsoft and Apple;

  • At the Microsoft event, the majority of the speakers devoted a good portion of their presentations to how they would beat Apple.
  • At the Apple event, 100 percent of the speakers spent 100 percent of their time talking about how Apple is trying to help teachers teach and students learn.

Microsoft had chosen a metric (“beat Apple at music players”), but it didn’t offer them any help on how to proceed with the next product. And just as “after the game is before the game”, the same applies: after every product comes the next. Only a consistent perspective gives the continuous long-term orientation.

Apple had this north star, this end-to-end orientation: to create the best user experience for its customers. And that gave them an advantage, gave them the resilience to perform properly under changing demands.

But Sinek goes deeper: he elaborates on concrete practices that a leader must incorporate if he or she is to develop a company that succeeds under these conditions:

  • Advancing a just cause
  • Building trusting teams
  • Study worthy competitors
  • Prepare for existential flexibility
  • Demonstrate the courage to lead

The just cause

A just cause is another developed idea of Start with Why. But: it is not the same as the WHY. A WHY comes from the past. It’s an origin story. It is a statement of who we are – the sum of our values and beliefs. A just cause is about the future.

A just cause must be:

  • for something – affirmative and optimistic –
  • inclusive – open to all who wish to contribute –
  • service-oriented – for the primary benefit of others – thereby building a loyal base of employees and customers (and investors) who will remain loyal to the company through thick and thin.
  • resilient – can withstand political, technological and cultural changes –
  • idealistic – big, bold and ultimately unattainable – attainable is a vision that also plays an important role.

What doesn’t qualify as a good thing is

  • Moon shots, i.e. hard to reach targets
  • “to be the best”, that is, to measure oneself against the competition.
  • growth per se
  • Social responsibility, i.e. things that the company pursues in addition to its primary objective

The role of leadership

With this in mind, perhaps the role of a CEO should be redefined as “guardian of the good cause” or “chief vision officer.”

Martin Luther King Jr. Says in his legendary speech “I have a dream” – he didn’t say “I have a plan”. Of course he needed a plan, but as the “CEO” of the civil rights movement, he was not responsible for making the plan. He was responsible for the dream and for making sure that those who were responsible for the plans worked to move the dream forward. His responsibility was to look beyond the day and keep the dream alive.

Sinek identifies three pillars of an organization – advancing a purpose, protecting people, and making a profit. “Inifinite Game” minded leaders work hard to get those priorities right; to look beyond the financial constraints of the current day and they put people before profits as often as possible. This promotes employee engagement and prepares the following point: trusting teams.

Trusting teams

Leaders are not responsible for results, leaders are responsible for the people who are responsible for the results. And the best way to drive performance in an organization is to create an environment where information can flow freely, mistakes can be pointed out, and help can be offered and accepted.

In short, an environment where people feel safe among themselves.

Many organizations consider the ability to work together in a team in a trusting manner tends to be more important than pure performance, even saying that narcissistic high achievers can be toxic in teams.

trust Performance Matrix
The worthy rival

If all the metrics that say who is ahead and who is behind are arbitrary and change over time – what can I look at to get a score. Also, in an infinite game, there is no finish line, so you are trying to compete in an unwinnable race.

However, I can take a cue from a competitor who is doing a good job. The truth is, even though we do similar things, he’s not my competitor (in the finite game sense), he’s my rival (on the same path as me). My very worthy rival, though we benefit from each other just as much by generating new ideas in competition.

Worthy rivals help us to become better, they help us to stay grounded, that is, to stay honest and ambitious.

Existential flexibility

Flexibility also takes on a different undertone when viewed in the light of an infinite game: it becomes broader than the range of tactical measures that become appropriate to achieve the current business goal – flexibility in the long run challenges all fixed points, becomes existential. What this kind of flexibility means can be illustrated by the example of Kodak: Kodak was founded with the purpose of making photography as easy and accessible as possible for everyone – a very good example of an infinite mindset.

Over time, another generation of finite-minded leaders came to the helm. When digital photography came along, Kodak did have the vast majority of patents. But they did not use them to reinvent themselves. They decided instead to suppress the new technology for as long as possible to stave off the inevitable and continue selling silver-based films until then.

The effect is all too familiar: When Kodak’s patents expired in 2007, the money dried up, and five years later Kodak filed for bankruptcy.

Existential flexibility is the ability to initiate extreme disruption of a business model or strategic course to more effectively advance a just cause, even if it disrupts the existing business model.

Kodak has failed in this challenge. In this respect, disruptions are sometimes the direct effect of a finite mindset.

The courage to lead

How do we find the courage to change our way of thinking?

We can wait for a life-changing experience that shakes us to our foundations and challenges the way we see the world.

Or we can find a righteous cause that inspires us; surround ourselves with others with whom we share a common cause, people we trust and who trust us; identify a rival worth comparing that spurs us to keep improving; and remind ourselves that we are more committed to the cause than to any particular path or strategy we happen to be pursuing.

The environment doesn’t make it any easier: Wall Street analysts (or their local equivalent) tend to write for the short-term community. It therefore takes no courage to maintain a finite mindset