Key takeaways from “Infinite Game” by Simon Sinek
The book serves as an excellent guide for leaders, directing them to steer their companies towards outcomes that benefit society rather than engaging in zero-sum games. Leaders can accomplish this by prioritizing their customers over shareholders. A company achieves success when it
- Benefits of infinite games: When we lead with a finite mindset in an infinite game, it leads to all kinds of problems, the most common of which include the decline of trust, cooperation and innovation
- Which means, to succeed in the Infinite Game of business, we have to stop thinking about who wins or who’s the best and start thinking about how to build organizations that are strong enough and healthy enough to stay in the game for many generations to come. The benefits of which, ironically, often make companies stronger in the near term also
- The true value of an organization is measured by the desire others have to contribute to that organization’s ability to keep succeeding, not just during the time they are there, but well beyond their own tenure
- What’s more, the inspiration, innovation, cooperation, brand loyalty and profits that result from infinite-minded leadership serve companies not just in times of stability but also in times of instability. The same things that help the company survive and thrive during good times help make the company strong and resilient in hard times
- Symptoms of finite companies: Because finite-minded leaders place unbalanced focus on near-term results, they often employ any strategy or tactic that will help them make the numbers. Some favorite options include reducing investment in research and development, extreme cost cutting (e.g., regular rounds of layoffs, opting for cheaper, lower quality ingredients in products, cutting corners in manufacturing or quality control), growth through acquisition and stock buybacks. These decisions can, in turn, shake a company’s culture. People start to realize that nothing and no one is safe. In response, some instinctually behave as if they were switched to self-preservation mode. They may hoard information, hide mistakes and operate in a more cautious, risk-averse way. To protect themselves, they trust no one. Others double down on an only-the-fittest-survive mentality. Their tactics can become overly aggressive. Their egos become unchecked. They learn to manage up the hierarchy to garner favor with senior leadership while, in some cases, sabotaging their own colleagues. To protect themselves, they trust no one. Regardless of whether they are in self-preservation or self-promotion mode, the sum of all of these behaviors contributes to a general decline in cooperation across the company, which also leads to stagnation of any truly new or innovative ideas. This is what happened at Microsoft. Consumed by the finite game, Microsoft became obsessed with quarterly numbers.13 Many of the people who had been at the company from the early days lamented a loss of inspiration, imagination and innovation. Trust and cooperation suffered as internal product groups started to fight with each other instead of supporting each other. And as if large companies don’t struggle enough with silos, Microsoft’s divisions sometimes actively worked to undermine each other. It went from being a place that attracted people to join a crusade to a place that the best and brightest avoided like the plague. A company that used to be a “lean competition machine led by young visionaries of unparalleled talent,” as Vanity Fair reported, “mutated into something bloated and bureaucracy-laden, with an internal culture that unintentionally rewards managers who strangle innovative ideas that might threaten the established order of things.”
- S&P company life span: According to a study by McKinsey, the average life span of an S&P 500 company has dropped over forty years since the 1950s, from an average of sixty-one years to less than eighteen years today.15 And according to Professor Richard Foster of Yale University, the rate of change “is at a faster pace than ever.”16 I accept there are multiple factors that contribute to these numbers, but we must consider that too many leaders today are building companies that are simply not made to last. Which is ironic because even the most goal-oriented, finite-minded leader must concede that the longer an organization can survive and thrive, the more likely it is to achieve all its goals
- Timeless human need: Markets will rise and fall, people will come and go, technologies will evolve, products and services will adapt to consumer tastes and market demands. We need something with permanence for us to rally around. Something that can withstand change and crisis. To keep us in the Infinite Game, our Cause must be durable, resilient and timeless
- Problem with Google right now: Without finding the words for the Just Cause and writing them down, it dramatically increases the risk that, in time, the Cause will be diluted or disappear altogether. And without the Just Cause, an organization starts to function like a ship without a compass—it veers off course. Focus moves from beyond the horizon to the dials in front of them. Without a Just Cause to guide them, finite-mindedness starts to creep in. The leaders will celebrate how fast they are going or how many miles they have traveled, but fail to recognize that their journey lacks any direction or purpose
- Moonshots are not infinite games: In the case of Kennedy’s actual moon shot, it is affirmative and specific. It is inclusive, service oriented and definitely worthy of sacrifice. However, it is not infinite. No matter how hard the challenge, no matter how impossible it seemed, the moon shot was an achievable, finite goal. More than an ideal future state, it is what Jim Collins, author of Good to Great and Built to Last, calls a BHAG, a big, hairy, audacious goal.2 It’s easy to mistake a BHAG for a Just Cause because they can indeed be incredibly inspiring and can often take many years to achieve. But after the moon shot has been achieved the game continues. Simply choosing another big, audacious goal is not infinite play, it’s just another finite pursuit
- Bad example: We will be the global leader in every market we serve and our products will be sought after for their compelling design, superior quality, and best value.”4 This is a pretty typical-sounding corporate vision or mission statement. This one belongs to Garmin, the maker of GPS devices for everyone from runners to pilots. Though there are dozens of variations, the basic formula is the same—we’re the best and everyone wants our products because our products are the best … and “they’re great value” (gotta squeeze that in)
- Interview question for companies: “What is your company’s Cause? Why does your company exist?” and the answer offered is “growth,” that’s a lot like your neighboring responding “vacation” to the question “Where are you going?” The leaders of these growth-oriented companies can rattle off their strategies and targets for growth, but that’s like explaining which highway and how many miles you plan to travel when heading on vacation; it doesn’t paint a picture of why you set off in the first place or where you hope to go. It doesn’t offer a larger context or purpose for that growth.
- Growth is a zero-sum game: For companies in those markets, companies like Sears or GE, their options are unattractive if they maintain a growth-at-all-costs mentality.7 Many start to play defense, give their money away to shareholders to court their favor or over use stock buybacks to keep their stock price artificially inflated. Growth through acquisition or merger often becomes the only way mature, finite-minded companies can continue to demonstrate high rates of growth. This may win a short-term boost in the stock market; however, as Harvard Business Review and many others have reported, “70%–90% of acquisitions are abysmal failures.”8 To offer growth as a cause, growth for its own sake, is like eating just to get fat. It pushes executives to consider strategies that demonstrate growth with little to no consideration of any sense of purpose for that growth. Just like it would affect a human being, it should come as no surprise that the organizations that eat to get fat will eventually suffer from health problems. Growth as a cause often results in an unhealthy culture, one in which short-termism and selfishness reign supreme, while trust and cooperation suffer. Growth is a result, not a Cause. It’s an output, not a reason for being. When we have a Just Cause, we are willing to sacrifice our interests to advance it. When we think money or growth is the Cause, we are more likely to sacrifice others or the Cause itself to protect our interests. Besides, nothing can grow forever.
- Adam Smith’s view on companies missions: “Consumption,” he wrote in The Wealth of Nations, “is the sole end and purpose of all production and the interest of the producer ought to be attended to, only so far as it may be necessary for promoting that of the consumer.”3 He went on to explain, “The maxim is so perfectly self-evident, that it would be absurd to attempt to prove it.” Put simply, the company’s interests should always be secondary to the interest of the consumer (ironically, a point Smith believed so “self-evident,” he felt it was absurd to try to prove it, and yet here I am writing a whole book about it).
- Capitalism is about progress: My assumption is that those who most fiercely defend Friedman’s views on business, and many of the current and accepted business practices he inspired, are the ones who benefit most from them. But business was never just about making money. As Henry Ford said, “A business that makes nothing but money is a poor kind of business.”4 Companies exist to advance something—technology, quality of life or anything else with the potential to ease or enhance our lives in some way, shape or form. That people are willing to pay money for whatever a company has to offer is simply proof that they perceive or derive some value from those things. Which means the more value a company offers, the more money and the more fuel they will have for further advancements. Capitalism is about more than prosperity (measured in features and benefits, dollars and cents); it’s also about progress (measured in quality of life, technological advancements and the ability of the human race to live and work together in peace)."
- CEO Incentives in a Friedman’s world: “If 80 percent of the CEO’s pay is based on what the share price is going to do next year, he or she is going to do their best to make sure that share price goes up, even if the consequences might be harmful to employees, to customers, to society, to the environment or even to the corporation itself in the long-term.” When we tie pay packages directly to stock price, it promotes practices like closing factories, keeping wages down, implementing extreme cost cutting and conducting annual rounds of layoffs—tactics that might boost the stock price in the near term, but often do damage to an organization’s ability to survive and thrive in the Infinite Game. Buybacks are another often legitimate practice that has been abused by public company executives seeking to prop up their share price. By buying back its own shares, based on the laws of supply and demand, they temporarily increase demand for their stock, which temporarily drives up the price (which temporarily makes the executives look good)
- Consequences of finite capitalism: I am not going to waste precious ink making a drawn-out argument about the long-term impact of what happened to our country and global economies when executives bowed to those pressures. It is enough to call attention to the man-made recession of 2008, the increasing stress and insecurity too many of us feel at work and a gnawing feeling that too many of our leaders care more about themselves than they do about us. This is the great irony. The defenders of finite-minded capitalism act in a way that actually imperils the survival of the very companies from which they aim to profit. It’s as if they have decided that the best strategy to get the most cherries is to chop down the tree. Thanks in large part to the loosening of regulations that were originally introduced to prevent banks from wielding the kind of influence and speculative tendencies that caused the Great Depression of 1929 to happen, investment banks once again wield massive amounts of power and influence.5 The result is obvious—Wall Street forces companies to do things they shouldn’t do and discourages them from doing things they should
- Finite minded employee: If the actual costs are net neutral, then the difference in how we treat people is simply a matter of mindset. And it is because of that alternative mindset that Apple and Costco enjoy average retention rates around 90 percent, when the average in the rest of retail is 20 to 30 percent.3, 4 Where finite-minded organizations view people as a cost to be managed, infinite-minded organizations prefer to see employees as human beings whose value cannot be calculated as if they were a piece of machinery. Investing in human beings goes beyond paying them well and offering them a great place to work. It also means treating them like human beings. Understanding that they, like all people, have ambitions and fears, ideas and opinions and ultimately want to feel like they matter. It may feel like a risk to many a finite-minded leader. To shell out all that extra money with the “hope” that it works out. Lower wages and fewer benefits are simply easier to calculate. However, it may be worth the risk. When companies make their people feel like they matter, the people come together in a way that money simply cannot buy
- Leadership comes from showing vulnerability: There is a difference between a group of people who work together and a group of people who trust each other. In a group of people who simply work together, relationships are mostly transactional, based on a mutual desire to get things done. This doesn’t preclude us from liking the people we work with or even enjoying our jobs. But those things do not add up to a Trusting Team. Trust is a feeling. Just as it is impossible for a leader to demand that we be happy or inspired, a leader cannot order us to trust them or each other. For the feeling of trust to develop, we have to feel safe expressing ourselves first. We have to feel safe being vulnerable."
- Taking responsibility is a first step: How to Find the Courage to Lead In my life, the only common factor in all my failed relationships is me. The common factor in all the struggles and setbacks that finite leaders face is their own finite thinking. To admit that takes courage. To work to open one’s mind to a new worldview takes even more courage. Especially when we know many of our choices will go badly. To actually take steps to apply an infinite mindset to an organization’s culture can seem to many like it would take insurmountable courage. And the truth is, it does. For it can be embarrassing, even humiliating, to admit that we are part of the problem. It can also be empowering and inspiring to decide to be a part of the solution.