Most leaders are playing the wrong game. When you play with a finite mindset in the infinite game of business, you lose trust, cooperation, and innovation along the way. In contrast, infinite-minded leaders create much stronger and competitive organizations. They even shape our future and leave behind resilient organizations and legacy that last generations.
Here are two types of games: finite and infinite games. Finite games have clear rules, well-defined beginnings and endings, and clear winners and losers. Infinite games have fuzzy rules, no clearly defined "win," and players can change the way they play anytime. The objective is to keep playing for as long as possible.
Business is an infinite game where players have different strategies, and there is no end to the game. Companies define "winning" differently - Market Share, Revenue, or Customer metrics. Companies emerge, grow, and become bankrupt while the infinite game goes on. To succeed in this infinite game, shift the focus from "winning" every quarter to building resilient organizations that can last many decades.
Long-term interests of the company can be threatened when you play with a finite mindset in the infinite game of business. An obsession with short-term metrics prioritizes urgency over importance, which leads to disastrous strategies and extreme measures to cut costs. This aggression not only sets the company up for eventual failure but also creates a culture of insecurity.
Companies that operate with a finite mindset are designed for stability. While they might produce quarterly results, they are not prepared to handle disruptions. In contrast, companies that play the infinite game are designed to embrace unpredictable situations and adapt to them. Infinite minded organizations think in terms of generations, not quarters.
The five essential principles for the infinite mindset are: 1) exist to further a just cause, 2) build trust in teams, 3) find worthy rivals, 4) display existential flexibility to make extreme strategic shifts, and 5) find the courage to lead with an infinite mindset.
A Just Cause is a clear future vision that is bigger than the organization that it serves to further. The Just Cause provides the long-term motivation, direction, and purpose required to play the infinite game. It creates customer loyalty, brings out the best in employees, and gives the organization both strength and longevity.
The core task of a CEO is not to manage operations. The CEO should be the Chief Vision Officer who communicates the Just Cause to the team and ensures that C-level executives direct their efforts to advance it. The best-run organizations have a CEO who focuses on the long-term and a COO who focuses on business plans and operations.
High-speed growth is no indicator that a company is built to last. While a finite minded leader sees growth as an end in itself, an infinite-minded leader considers it to be an adjustable variable. Sometimes it is essential to slow down growth to ensure the long-term security of the organization and that it is actually equipped to handle rapid growth.
Milton Friedman's theory that the sole purpose of a business is to make profits for shareholders has resulted in short-termist practices, such as annual layoffs, that harm the organization, its people, and the community. An infinite-minded leader must consider both shareholders and employees as contributors. While the former contributes resources, the latter invests time and energy. Both must be justly rewarded.
Businesses that play the Infinite Game must have three pillars: 1) advance a higher cause, 2) protect employees, customers, and the environment, and 3) generate profits to continue its success for as long as possible.
Organizations have two currencies in the Infinite Game: will and resources. While resources come from investors and customers, will is the motivation within the organization. During tough times, finite-minded leaders see people as a cost and prioritize resources over will. In contrast, infinite-minded leaders prioritize will and understand that motivation drives discretionary effort and creativity, the basis for long-term growth.
Organizations that resort to perks and incentives to generate will create a mercenary culture with little employee loyalty. However, an organization that cares about its employees and offers them a Just Cause creates zealots who are highly motivated because they genuinely believe in the cause.
Leaders have limited control over resources as they may vary due to market conditions. However, they can generate an endless supply of will that increases loyalty and drives long-term performance. Those who prioritize will over resources gain both in the long run.
Trust is central to organizational will. Leaders should create Circles of Safety, where employees feel safe to admit mistakes and seek help. This leads to improved performance in the long run.