Are Businesses Playing the Right Game?

No?l’s Book Reviews: The Infinite Game by Simon Sinek

Opinion:

This is the only recent book where I got swept up in the prelaunch hype. I believe it lived up to the hype. I would recommend this book to readers that want a fresh and positive perspective on business strategy. Simon Sinek taps into the unsatisfied feeling that many people have with the cut-throat winner-takes-all way of doing business. Overall, this is a low threshold book to read with a significant amount of research and new ideas in it.

While reading The Infinite Game, I found myself doing one of two things. I was either vocalizing agreements, or I was raising an eyebrow. Very often, some statements resonated with me, such as the chapter on ethical fading, where I thought to myself, "It is absurd that businesses need to be convinced to be ethical.” However, there were a couple of times where I felt my eyebrow-raising and feeling skeptical if Sinek's infinite mindset can be popularized. For example, he asks a leader to ultimately venture into the unknown and leave constant revenues behind in pursuit of the company vision. That is a lot to ask since people are naturally inclined to prefer a sure thing compared to uncertain returns.

Key messages from the book regarding business strategy:

·       Build your company to survive the longest, not to beat the competition

·       Find a purpose or vision that serves others is robust, inclusive, positive and idealistic

·       Create trust among teammates

·       Identify companies that are strong in areas where you are weak and learn from them

·       Stay purpose-driven when anticipating market changes

·       Be willing to stand up for what is right even if you are the only one

Chapter Summaries:

1.      Finite and Infinite Games

An explanation of the fundamental differences between infinite and finite games along with the consequences of not knowing the game you are playing.

The chapter opens with a description of a finite game. Finite games have known players, rules, and an agreed-upon end-objective. In contrast, an infinite game is where players are known and unknown, there may be some rules and regulations, but they are not all agreed-upon. Most importantly, an infinite game does not have an end-objective. Hence, there is no "winning" of an infinite game. Instead, the focus is on survival and longevity (staying in the game as long as possible). Sinek illustrates how these concepts translate to strategic mindsets with the Microsoft-Apple rivalry and the Vietnam war. It is clear that mismatching your leadership mindset with the game, explicitly playing an infinite game with a finite mindset, is determinantal to your organization's success. Finally, Sinek summarizes the five essential practices to lead with an infinite mindset: a Just Cause, Trusting Teams, a Worthy Rival, Existential Flexibility, and the Courage to Lead.

2.      Just Cause

A Just Cause is a specific vision of a future that is so appealing that people will make sacrifices to help advance the vision.

As hinted to in the previous chapter, a Just Cause is one of the five essential practices for leading with an infinite mindset. Consequentially, Sinek describes five elements that formulate a Just Cause. First, it needs to be for something affirmatively and optimistically. Second, it should be inclusive to all willing to contribute. Third, it should serve others above anything else. Fourth, it should be resilient to endure the changing world. Fifth, it needs to be idealistic so that it will always be striving for new heights. Sinek adds practical advice to write down your Just Cause because it makes communication easier and prevents dilution when the organization is further down the line.

3.      Cause. No Cause.

There are many imposter causes in the world, and here is how to spot them.

 Sinek goes deep into the different types of company visions that sound like a Just Cause, but they have a fundamental flaw. According to Sinek, being the best, having a corporate social responsibility program, or focusing on growth is not a Just Cause. A consistent way to distinguish between these companies is the order in which they phrase their visions. Most readers would agree that "do good making money" instead of "make money to do good" is a more sustainable and balanced approach to responsible and robust business development.  

4.      Keeper of the Cause

The leader of an organization needs to have an infinite mindset to further the Just Cause.

 Citing some prominent examples such as Walmart and Apple, Sinek illustrates that having a Just Cause is not enough to be successful in infinite games. The leader of an organization needs to ensure financial growth and to recognize opportunities to further the Just Cause. Recognizing opportunities for advancing the cause can be a daunting task since Wallstreet shareholders aggressively push business leaders to prioritize stock price growth while paying no attention to the vision of the company. The consequences of installing a finite minded CEO in an infinite game are noticeable and consistent. Walmart, after Cause-oriented leadership, opted for the efficiency-driven Mike Duke, who, in the short term, increased the stock price while also triggered workers strikes and multiple class-action lawsuits. Duke was soon replaced.

Similarly, Apple had lost its way after pushing out its founder, Steve Jobs (an undisputed infinite mindset leader). As a result, Apple performed so poorly that the board had to ask Jobs back to bring the focus back on the vision and less on its competitor at the time, IBM. Sinek, in general, questions what the responsibility is of a CEO since it can be vague at times. To clear up this job title, Sinek proposes to change it, Chief Vision Officer. Thus integrating the Just Cause with the leadership and separating the financial health and vision of the company. 

5.      The responsibility of business

A firm must do more than maximize profits.

This chapter is more philosophical and theoretical than previous chapters as it tries to explain the root causes of why infinite business strategies are overlooked and why finite thinking dominates in society at the moment. Sinek hypothesizes that the form of capitalism proposed by wildly popular economist Milton Friedman is imbalanced, unstable, and potentially ethically comprised. The evidence provided is damning: the average lifespan of companies has dropped from 60 years in the 1950s to just 20 years today, and there have been three market crashes since the introduction of this school of thought. The solution is to amend this definition of a firm to advance a purpose, protect people, and generate profits. Importantly, this definition of a firm's responsibilities is more robust since it encourages foresight while still making a profit. Furthermore, protecting people has long term benefits as consumers begin to trust and prefer firms that take care of them.

6.       Will and Resources

Successful leaders put Will before Resources.

Sinek breaks down the currencies of any game to Will and Resources. Many of us will be familiar with the resources of a firm; they are tangible, measurable, and there are standards to evaluate them, such Earnings per Share (EPS). Meanwhile, Will is much harder to measure because it is in the subject realm. Will mainly describes the desire to engage and the level of effort that one exerts for the company. Ideally, in an infinite game, a CEO prioritizes Will and Resources equally. However, that is difficult to do since every leader will have a bias for one over the other. Sinek advocates that opting for an employee-first (or Will prioritized) strategy since it will not only reward you in economically prosperous times but also in times of financial uncertainty. The story of The Container Store during the 2008 recession drives the point home excellently. Importantly, employees should never be considered a cost because they are a crucial part of any business.

7.      Trusting Teams

Trust enhances performance, but performance does not build trust

This chapter intuitively seems correct because everyone has experienced what it is like to work with someone that they do trust versus someone they do not trust. This difference is outlined with the Performance versus Trust graph, which is often used by the NAVY Seals. Naturally, every leader wants to avoid low trust and low-performance individuals and to hire high performance and highly trustworthy individuals. The only problem with trust is that it needs to be earned over time and, therefore, takes time and money, which finite mindset leaders do not see as a positive prospect.

On the other hand, high performance can be demonstrated and found relatively easy, which makes these individuals attractive to leaders in any game. Interestingly, the NAVY Seals have found to prefer a low performance, but highly trustworthy teammate over a high performing, but little trust teammate. Mainly because low trust individuals are toxic for team dynamics since teammates are continually working with their guard up, and there is no incentive to advance as a whole unit. Conversely, when a leader creates a culture of trust in a team, individuals are comfortable collaborating and going beyond their job description if it means to help the team. Only in trusting teams does the adage ring true that the collective value of a team is higher than the sum of its components. 

8.      Ethical Fading

Holding yourself to ethical standards ensures self-improvement as well.

Sinek, as a serial optimist, in this chapter, provides a rationale to explain why good people do bad things at times. He tracks the root cause of unethical business practices to the current culture of pressure, rigid organizational structures, and incentives. Over time, people have been conditioned to recognize authority and act obediently, which creates opportunities for ethical fading to set in. People disregard their better judgment because they were told by an authority figure to do something. This leads to the second cause, which is when organizational structure and procedures take away the agency of employees. Sinek uses the example of Well's Fargo's shady business practices between 2011 and 2016 and the Pharmaceutical Company, Mylan, where business procedures had turned so unethical that there were congressional hearings. A clear sign of ethical fading and self-deception was that employees from Mylan did not hold themselves accountable but instead blamed the system for the problem. Thirdly, Incentives are misaligned and not carefully implemented. This results in companies rewarding employees for being unethical. Finally, Sinek uses Patagonia, the clothing company, as an example of acting ethically as a standard. Although it is a long, never-ending, and diificult journey, Patagonia finds that it is always pushed to do things better just because they keep an ethical standard.

9.      Worthy Rival

A Worthy Rival exposes your weaknesses and pushes you to improve constantly.

Another element required for leading with an infinite mindset is to have Worthy Rivals. Sinek emphasizes that this different from a sports rival, whom you try to beat. Instead, a Worthy Rival is another party that helps you get better at what you do. Again this concept is exceptionally compatible with the infinite game because the infinite game does not care about winners; it cares about the continuation of the game. Interestingly, a Worthy Rival can be in any sector or market segment: it is entirely open. To determine worthiness, it is crucial that the company can identify, in a rival, one aspect that they would like to improve. Sinek does have pieces of advice for leaders on the topic of competitors. First, Leaders should prevent to become cause blind, which occurs when a leader is overly convinced that their cause is the only correct solution to the problem they are trying to solve. They tend to ignore and belittle competitors and become arrogant, which stunts innovation and reduces flexibility. Second, Leaders should not confuse losing a Worthy Rival with winning the game. As stated, many times, there are no winners in the infinite game. Sinek admits that once a Worthy Rival drops out, the remaining company will enjoy the benefits of surviving. However, it is only temporary; eventually, another worthy rival will emerge, and you need to be vigilant enough to see them coming. The example in the book is the dominance of the United States after the fall of the USSR. The US mistakenly thought they had won the cold war; however, that is not the case since it is still ongoing today only now with new players such as Iran, China, and Russia. In summary, Worthy rivals are necessary to keep hubris from setting in.  

10.  Existential Flexibility

Be able to disrupt your course to more effectively advance your cause.

 The penultimate element of infinite game strategy is to recognize when you need to change your ways to further your Just Cause in the future. Sinek shares the example of Walt Disney that liquidated all his assets from Walt Disney Productions in the height of its popularity and put all his money into a new project: Disneyland. He had become convinced that the animated movies would not further his pursuit to spread happiness. The only reason to completely change your business strategy is to anticipate changes in the game that will put you out of business if you do not change. The advice here is that it is easier and more beneficial if you blow your business then if someone else does it for you because you can determine your future trajectory. The Kodak anecdote is the perfect example of companies failing to anticipate changes and make the necessary adaptations. 

11.  The Courage to Lead

Being willing to stand up for what is right when the future is uncertain.

Sinek saves the best for last. The main criticism of infinite leaders is that there are many risks involved in an unknown future. Therefore, this chapter outlines precisely why the Courage to Lead is a necessary part for you to ensure your companies future. Sinek tells the story CVS, a pharmacy, and their decision to stop selling tobacco-related products. The move cost them nearly 2 billion dollars in revenue, and the share price dropped significantly, but these are the cost of advancing your Just Cause.

Interestingly, Sinek continued to monitor the share price, and CVS had made up the drop the next day. Even better a year and a half after the announcement, the stock price was double, which clearly illustrates that an infinite mindset pays off. The leaders need to determine if the risks are manageable in the near future.