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DownloadMost 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.
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Read this summary of The Infinite Game to learn the five principles that make someone an infinite-minded leader who inspires loyalty and ultimately advances a greater cause.
Too often, leaders play with a finite mindset and obsession over quarterly figures. This leads to measures that can be extremely costly in the long run. Simon Sinek shows us how business is an infinite game and gives us five well-defined principles for success. Learn how to find a Just Cause that inspires employees and generates customer loyalty, build trusting teams that perform exceptionally well, find worthy rivals to learn from, be flexible enough to make drastic shifts, and discover the courage to lead in the infinite game. Read this summary to know what it takes to create and lead transformational organizations that create impact, loyalty, and last for generations.
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There are finite games and infinite games in life. Finite games have a clear beginning, middle, and end. There are known players, fixed rules enforced by referees, and agreed-upon objectives. Think of football, for example. Infinite games, by contrast, are played by known and unknown players. There are no clear agreed-upon rules, and each player can change the way they play any time. Infinite games have no end or clear definition of what it means to "win". The objective is to keep playing. There is no winning in infinite games like friendship, marriage, or business. These are continuous journeys and not just one-off occasions.
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Business is an infinite game
Business is an infinite game in which we may not know all the players who each have their own strategies. While there are time frames like quarterly results to evaluate performance, there is no end to the game. For some companies, being number one is based on the number of customers served while another company might use revenue metrics. There is no single metric for "winning" business.
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The finite game ends when the time is up, and the players live on. In contrast, in the Infinite game, the game lives on while players come and go. In business, this is called bankruptcy. To succeed in the infinite game of business, we need to shift focus from thinking about who wins to focus on building resilient organizations that last generations.
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A finite-minded leader works to get something from employees, customers, and shareholders to meet targets. In contrast, an infinite-minded leader ensures that employees, customers, and shareholders continue to contribute to the organization beyond their tenure. He looks beyond what is best for the company and inspire teams to advance towards a vision of the future that benefits everyone. Metrics are only markers of progress towards that vision.
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Stability vs. resilience
While companies playing the finite game are built for stability, those that play the infinite game are geared for resilience. Companies built for stability might weather some challenges, but they are not prepared for unpredictable disruptions. Resilient companies embrace surprises and adapt to them.
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Thinking in generations
After 9/11, Victorinox Swiss Army knives were banned from carry-on luggage, presenting an existential challenge to a company where knives accounted for 95% of sales. Instead of extreme cost-cutting and layoffs, they doubled down on product development to inspire their team to leverage the brand in new markets. Today, knives account for only 35% of sales. The company has doubled its revenues by venturing into travel gear, watches, etc. As its CEO Carl Elsener says, "We do not think in quarters. We think in generations".
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The danger of playing with a finite mindset
When Apple launched the iPod, Microsoft responded by releasing the elegantly designed, feature-rich Zune to capture Apple's market share. While Microsoft was obsessed with Apple, Apple, under the infinite-minded Steve Jobs, was not competing with Microsoft. Apple was focused on outdoing itself. Within a year of the Zune's launch, Apple released the iPhone that redefined smartphones and made both the Zune and the iPod virtually obsolete. Infinite-mindedness opens novel paths to innovation.
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Playing with a finite-mindset in the infinite game of business will lead to decisions that sabotage the long-term interests of the company. When companies prioritize competition and winning, their corporate strategy, product strategy, and incentive structures will be designed to meet finite goals. This pushes the entire company to focus excessively on the urgent at the cost of the important. A finite-minded focus on near-term numbers can lead to problematic strategies like reducing R&D investment, extreme cost-cutting, layoffs, etc. These can be disastrous for the company culture and lead to insecurity, excessive caution, aggressive tactics, and a survival mentality.
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Five essential practices
In adopting an infinite mindset, consistency is more important than intensity. The Infinite Mindset requires the following five essential practices:
To lead in an infinite game, a leader must have a clear vision of a future state that is bigger than the organization that inspires people to work. This Just Cause provides sustained motivation beyond immediate rewards and encourages us to keep playing the infinite game.
Most purpose or vision statements are finite, generic, or self-centered and would not qualify as a Just Cause. A clear Just Cause must have five qualities:
1. For something
It should be something the organization stands for and not something it is opposed to. Being against something, like defeating Apple in market share, frames the Cause as a finite game with a definite end.
2. Open to everyone
A powerful just cause inspires people to offer their time and effort to advance it. Early adopters own up the Just Cause and come to contribute. Infinite minded leaders seek out employees, customers, and investors who believe in their Just Cause.
3. For the primary benefit of others
The primary benefit of the Just Cause must go to people other than the contributors. A leader must invest his time, energy, and skills to benefit those he leads and keep the infinite game going. An infinite-minded investor looks to advance a higher cause, which, when successful, can be highly profitable. A finite-minded investor has a mindset similar to a gambler. This overall service orientation creates loyalty among both customers and employees, giving the organization both strength and longevity.
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4. Resilient to political, cultural, and technological changes
The Just Cause must be higher than products or services because in the infinite game, markets will rise and fall, and technological disruptions could render entire product ranges obsolete. For the infinite game, the Just Cause must be durable, resilient, and timeless. Products are only steps to advance the Cause.
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5. Idealistic, bold, and unachievable
A Just Cause is an Ideal, which no matter how much has been achieved, is still relevant to inspire future action. It must always lie ahead, not behind.
Founders who have the infinite vision of the Just Cause must write it down so that the vision is shared across generations and inspires decisions consistent with it after the founder is gone.
Due to the pressure to value skills over mindset, finite minded leaders are too often promoted as CEOs when the role actually demands a visionary, infinite-minded leader. The CEO plays the role of a Chief Vision Officer who protects the vision, communicates the Just Cause, and ensures that C-level executive actions align with it. The Chief Vision officer is the keeper who focuses on the infinite horizon while the COO & CFO's are Operators who focus on the business plan. The best-run organizations have a partnership between these two complementary skillsets. The very operational skills and finite focus that makes people excel as CFO's make them ill-suited to being CEO.
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For the past 40 years, we've had a definition of business that harms enterprises and the system of capitalism itself. In 1970, Milton Friedman gave the theory of Shareholder primacy that drives most companies today. Simply put, this theory holds that the sole purpose of business is to make money within legal and ethical limits and that money belongs to shareholders. As this idea took hold, pay packages became tied to stock prices leading to practices like closing factories, keeping wages down, and annual layoffs that do incredible damage to the organization, people, and the community.
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High-speed growth is not a guarantee that a company is built to last. For a finite leader, growth is the goal, while for an infinite leader, growth is an adjustable variable. A leader may slow down growth to ensure long-term security or to prepare an organization for withstanding the additional pressures that come with rapid growth. For companies to last generations, executives must not work exclusively for shareholder benefit. Both shareholders and employees are contributors. While one contributes capital, the other contributes time and energy.
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Three pillars of business
Business must have three pillars:
Everyone contributor must have the opportunity to feel protected at work, be fairly compensated, and contribute to a bigger cause.
There are two currencies required to play the infinite game: will and resources. Resources are tangible material elements like money that come from outside sources like investors and customers. Will comes from inside sources and includes morale, motivation, commitment, and the desire to engage. In hard times, when the two currencies conflict, finite-minded leaders prioritize resources resorting to decisions like layoffs and extreme cost-cutting. Infinite-minded leaders resist financial pressure and prioritize people. While finite-minded organizations see investing in people as a cost, infinite-minded leaders understand that will drives discretionary effort, creativity, and teamwork that are essential to long-term performance.
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Using external motivations, like bonuses and perks, to generate will creates a mercenary culture where employees have little loyalty for the organization. In contrast, an organization where people are well-treated and intrinsically motivated creates zealots who work because they genuinely believe in the Just Cause. Leaders have limited control over resources, but they can generate infinite goodwill. When hard times strike, employees rally together to protect each other, the organization, and their leaders. Even a small bias for will over resources will create a culture where both will and resources are in abundance in the long run.
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Trust is at the heart of organizational performance. When there is a lack of trust, employees feel forced to lie, hide information, and avoid asking for help when they need it. This prevents the real problems from surfacing.
A Circle of Safety is an environment where people feel safe to be vulnerable, admit mistakes, and ask for help with the confidence that the team will support them. A leader must continuously and actively cultivate this Circle of Safety.
When choosing team members, the NAVY SEALS, one of the highest performing teams on earth, grade them on both performance and trust. The obvious choices are those with high performance and high trust, while the definite rejects are those who score low in both. But when asked to choose between a high-performance, low-trust person and a low-performance, high-trust person, the SEALS preferred the latter. High-performance, low-trust candidates are toxic because they care about their career growth over the team. This creates an environment that makes it difficult for everyone around them and organizational performance can suffer over time.
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While we have many metrics to measure performance, we barely have any to measure trust. Leaders are not responsible for results. They are responsible for people, who in turn are accountable for results. The best way to ensure performance is to create a trusting environment where information flows freely, mistakes are confessed, and help is sought for and received.
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Ethical Fading happens when an organization's culture allows people to commit unethical acts while falsely believing that they have not compromised any principles. Small, dubious actions to achieve targets, when unchecked, send a message to employees that goals matter more than ethics. Ethical fading grows with every such act. Over the long run, ethical fading will create a far higher cost to the organization and its customers than the seeming short-term benefit it offers.
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When finite-minded leaders see Ethical Fading, they attack it by bringing in more processes. However, Ethical Fading is a people problem, and the best antidote is to provide a genuine Just Cause to care for and a trusting team. When employees are committed to a cause and feel accountable to their team, they are less likely to commit ethical failings.
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While a finite game makes us see competitors as opponents to be defeated, an infinite game helps us understand them as Worthy Rivals, who help us become better players. Worthy rivals can be organizations that do something as well as or better than our organization. This could be a superior product, higher customer loyalty, or better leadership. In an infinite game, more than one player can do well simultaneously.
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New entrants can make incumbents lose sight of their original vision and begin to compete with the new player on product metrics. Seeing the new entrant as a competitor leads them into this finite quagmire while considering them to be a Worthy Rival enables companies to use the opportunity to recommit to their Just Cause.
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Existential flexibility is the capacity of an infinite-minded leader to create an extreme disruption in strategy or product to advance the Just Cause better. This happens when the company is already successful. Great leaders continuously scan the horizon for opportunities and ideas to better promote the Just Cause. While a finite-minded leader thinks the risk is not worth it, an infinite-minded leader sees that staying on the existing path is a more significant risk.
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Finite games come at a cost
George Eastman built a company that pioneered personal photography and dominated the industry for decades. In 1975, their R&D department invented the digital camera. However, fearing disruption of their existing market dominance, they shelved it for decades, until their competitors began to develop digital cameras. Since Kodak owned many of the digital camera-related patents, their bottom lines still showed huge profits even as they fast lost market share. But when the patents expired in 2007, Kodak was soon forced to file bankruptcy protection. The leadership's inability for existential flexibility allowed Kodak to be disrupted by the very technology they invented.
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Organizations can easily veer off course and focus on finite pursuits. It takes courageous leadership to play an infinite game. To do this well, we need the support of great teams who share our responsibility and our beliefs. Ultimately, the infinite game is a team play.
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