The Infinite Game of Capital Projects

Capital projects are by definition finite games – they have a defined start, a defined middle, and a defined end. This creates a problem though, because finite games typically have a winner and a loser. So how can you have successful project collaboration when someone wins and someone loses?

The terms finite and infinite games were first introduced in James P. Carse’s book titled Finite and Infinite Games, and then popularized more recently in Simon Sinek’s book titled The Infinite Game.

Finite games have a start and a finish. There are fixed players with known rules and an agreed upon objective. If there is a winner, then there must be a loser. Think of a soccer game as an example of a finite game. There is a defined start and finish to the match, the players are known, there are agreed upon rules and an agreed upon objective. One team wins and another team loses.

Infinite games do not have a defined finish, you can not win at infinite games. Infinite games have known and unknown players who come and go, and the rules can change at anytime. The objective of infinite games it to play the game as long as possible. Think of business as an example of an infinite game. You can’t win at business, nobody is declared the winner of business. Companies come and go all the time. When one business fails, another business enters the market to fill the void. The players of the game come and go. If a company is number one in their market, they can be de-throned by a competitor for a period of time before another competitor comes along and de-thrones them as well. The game continues as the strongest businesses survive over the long term.

Simon Sinek uses the example of Microsoft’s Zune audio player. Microsoft was focused on beating their competitor Apple by building a better music player. And on all accounts, the Zune was better than Apple’s iPod Touch. However, you may not have even heard about the Zune, because while Microsoft was focussed on beating Apple, Apple was focused on innovating to beat themselves. A few years after the Zune was released, Apple introduced the iPhone, therefore making both the Zune and iPod Touch obsolete. Microsoft was playing the finite game to beat Apple, Apple was playing the infinite game to innovate and build better products for their customers.

The concept of finite and infinite games applies to capital projects. On the surface, projects fit the definition of a finite game. And when you’re playing a finite game, it is best to play by the finite rules (the contract requirements). However, so many groups working on projects talk about beating their competition or about being number one. This creates a problem on projects when all groups need to be working together collaboratively rather than competing against each other or trying to maximize their gain on projects.

When proponents submit proposals on projects to be awarded the work, this resembles a finite game. One company is selected to do the work, the others are not. Even in this situation though, the game continues. There will be another project to bid on, and the opportunity to grow and achieve better results continues. Leaders that understand this infinite mindset are able to learn from a setback of losing a project and instead compete against themselves to become better at what they do to win the next project.

The finite mindset of contract evaluation and award unfortunately can often carry over into execution of the work. When this happens, project groups that are working on the same project compete against each other, rather than collaboratively work together to solve problems as they arise. This would make sense if you label each project as a finite game, but a finite approach to projects leads to a decline of trust, decline of cooperation, and a decline of innovation. We see this to be the case since the construction industry has largely stayed stuck for the last several decades with very little innovation to improve productivity.

The game of projects is really an infinite game when you look at the big picture. Think of how many capital projects are going to be required to address the current climate change initiatives. This is certainly more than a single project – there will be several thousand projects required worldwide if we are to transition to a sustainable society. And will we ever win climate change? Not likely, this will be an ongoing effort for eternity to achieve and maintain a sustainable society.

So what this means is that each finite project is within the infinite game of building projects to achieve our global initiatives, and that completing capital projects is an infinite game. Companies with this mindset understand that their role is to play the game for as long as possible.

The best companies that do the best work on projects are not obsessed with winning. They are instead focused on things like team-building, building relationships with other groups on projects, and collaborating to generate the best outcome to constantly improve on what they do. While companies must be profitable, this is not their main focus. When companies focus on the project priorities and doing great work, they know that the profits will follow. When companies have an infinite game mindset, they become better at playing the finite game of each project, which leads to more projects and more profits.

The fundamental problem with capital projects is when there are misaligned incentives with too much money in the system. This leads to short-term decisions to maximize profits, but hurts the long-term outcomes of the project. Decisions may make sense during design and construction, but when the long-term impact of the project during commissioning and startup is evaluated, these short-term decisions ultimately end up hurting the project outcome.

The problem with the finite mindset on projects is it leads to decisions on how project participants can maximize their profits today. Project groups with an infinite mindset are instead thinking about how to stay in the game the longest.

Simon Sinek talks about worthy rivals in his book. In an infinite game, project participants are searching for worthy rivals that they can learn from to become better. They are not looking at other groups as competitors to beat. They are looking to learn so they can self-improve and innovate to become better at what they do. When companies look for worthy rivals, there will be some things that they do better, and other things that rivals do better. Both companies can learn from each other to fill the gaps and collectively become better as an industry. This has not happened though, the construction industry has remained stagnant due to many groups with finite mindsets.

Some companies with a finite mindset will try to cheat the system. In the case of projects, this usually means that quality suffers. If there is anything that can be skipped to get to the end quicker, companies with a finite mindset will attempt to do this. Commissioning suffers because of this, with degraded construction quality and incomplete commissioning as groups with finite mindsets try to cut corners and achieve short-term results.

So what does this mean when completing capital projects?

The way a company operates needs to be evaluated before awarding contracts. If there are any hints of a finite mindset, steer clear. The way this is done during proposal evaluation is to ask for the systems and processes that show how companies work. When you review a company’s internal schedule processes, quality processes, construction management, commissioning plans, etc, you will see during proposal evaluation how companies operate and if they approach the work with a finite mindset. You’re not setting your project up for success if these companies are awarded the work, even if they are the lowest price.

The finite timeframe of projects needs to be approached with an infinite mindset if we are to tackle the global challenges that we face. Short-term goals with a finite mindset are not going to impact the positive change we need in the world if we’re going to solve problems together. Let the finite mindset companies that refuse to change wither and die while companies that actually want to make a positive impact shape the global future that we need.

And lastly, the only way that large groups of people can accomplish great things together is when everyone is collaborating, innovating, and solving problems together. Groups with finite mindsets are standing in the way of what we need to accomplish on projects and should be avoided when building your project team at the beginning of projects.

If you haven’t already, you can read Simon Sinek’s books for more insight into finite versus infinite games and how these concepts can be applied to capital projects.

To learn more about the collaborative processes required to complete capital project completions and commissioning, join our next live webinar to learn more about Commissioning Project Management. Get the Zoom link here.