Why your company can not win

Let us be honest, we all love goals - and, of course, it is greatly satisfying when we achieve most or even all of them. It is therefore no wonder that we have perfected this "passion" in companies to the point of excess. 

• Management Board members measure corporate success in terms of sales and profit per fiscal year
• Shareholders measure the company's success in terms of distributed dividend per share and year
• Project managers measure the success of projects in the difference between target and actual budget, scope, quality and time

Certainly, there are differences in roles and key figures from company to company, but I think many will recognize some pattern from their company.

But where is the problem?

The question is what rules we play by

Let us take a completely different example to illustrate the problem:

Imagine you and your team are training to win the upcoming soccer match. You plan everything around this goal - the nutrition, training method and get support from an experienced coach. Everything goes as planned and on a beautiful spring day you win the match against one of competitors. Proudly you are waiting for the next match and the next competitor to start - after all, you just demonstrated to everybody how to perform. Confidently you and your team play - who can beat you? And after 90 minutes you lost.

Of course, you are not playing soccer in business, but you develop Products or Services for your customers – and most likely you have competitors. Training to win a soccer match is like developing a product or service for the market. Even if your market launch is a big success and you are rated number one with your offering doesn’t mean that the “game” ends here. Your competitors “train” continuously and may will lunch another product or service that will overtake you or leave you completely behind – from an upcoming star on the market to somebody that we used to know.

But what happened? In simple words:

You have lost because you played according to the rules of the finite game in an infinite game while your competitors knew the rules of the infinite game and played according to them.

Simon Sinek defines the two types of games as follows [1]:

“In finite games, like football or chess, the players are known, the rules are fixed, and the endpoint is clear. The winners and losers are easily identified.

In infinite games […] the players come and go, the rules are changeable, and there is no defined endpoint. There are no winners or losers in an infinite game; there is only ahead and behind. “

How do you "play" the development of (digital) products?

Now ask yourself: When you look at how businesses are run, which type of game is it: finite or infinite?

The answer seems simple: Business is an infinite game. New player come and go, the rules of how to run business may change and most important, there is no “end” – no point in time where somebody can say “I am first”, “I am second” and “I am third”. You can be ahead or behind with your company in terms of revenue, market share or customer base and this can change from day to day.

Unfortunately, the answer is even more complicated: Let us take another example - football. We can consider a football game as a finite game. We know the players, we know the (fixed) rules and we know when it is over. But if we expand our horizon to the seasons, it suddenly looks different: Every year there is a new Season with new teams, new players, maybe new rules, like the video proof. And at the start of this current season nobody knew that the Bundesliga – like all other leagues – was to take a break in the middle of the season due to the Corona virus. Hence, we are dealing with a never-ending – infinite game after all.

 If we now bring both dimensions together, we recognize that we deal with a series of finite games within an infinite game.

The parallels to the enterprise world are obvious. In an infinite game between competitors we find finite games within companies in the form of programs, projects, or initiatives.

So, what is needed within businesses is the ability to design the finite games in such a way that we don't fall behind in the infinite game of business.

Why is this relevant? Well, during my coaching and consulting practice over the past decade I have seen many companies and projects focused on finite goals only. Anything that would have to be considered beyond that finite-game horizon was completely ignored:

• Projects took on technical debts to be completed "in time”;
• Projects were stopped and continued 4 months later to make the annual report look "better". (fun fact: the initial delay led to a 40% increase in costs);
• Digital products were discontinued without adaptation because they were released after competitive offerings;
• Important investments were postponed because they could not be covered any longer within the – tightening - annual budget.

Agility as the Framework for the infinite game

The idea of an infinite game is deeply rooted in the basics of agile working methods. These basics were first described in 2001 by 17 renowned software developers in the form of the agile manifesto [2] and the agile principles [3].

The focus on infinity is particularly evident in three of these 12 principles:

• Welcome changing requirements, even late in development. Agile processes harness change for the customer's competitive advantage
• Continuous attention to technical excellence and good design enhances agility
• Agile processes promote sustainable development. The sponsors, developers, and users should be able to maintain a constant pace indefinitely.

At the same time, we also see the finite game addressed:

• Deliver working software frequently, from a couple of weeks to a couple of months, with a preference to the shorter timescale.
• Businesspeople and developers must work together daily throughout the project.
• At regular intervals, the team reflects on how to become more effective, then tunes and adjusts its behavior accordingly.

The Frameworks build on the agile manifesto and the values and principles captured. Scrum [3], SAFe [4] or LeSS [5] or Scrum @ Scale [6] are examples for bringing the “gears” of the finite and infinite side of business together.

They bring together both worlds and provide organizations with tools to play both games in combination.

Conclusion

Like it or not, business is not about winning. There is no fixed endpoint, no clear winner or loser – just points in time where you are ahead, or your competitor is ahead. And if you are behind you always have the chance to double-down your game and overtake everybody else who is in front of you if your organization is skillful enough to play both infinite and finite games as discussed. However, this will not work for you as long as your leaders rely on a mindset and tools that were designed to play finite games.

The Authors

Christian Kaczmarek is working for over a decade on the question of how companies can become both more successful and more humane in the age of digitalization where learned behavior and tools from decades ago does not work anymore. He knows the issues from both sides - as an external coach and management consultant and as an internal employee in an international enterprise. Today he is working as an Director at fable+ and leading large transformations projects at companies from different industries and sizes.

Wolfgang Hilpert has led product and technology organizations over the last 25 years. He evolved from co-founder of a start-up company to executive leader at some of the leading global tech companies. In his most current position, he has been leading the Agile transformation at HERE Technologies as VP Business Agility. Over the past 12 years, Wolfgang developed a strong passion for Lean and Agile methods, principles and mindset. He is determined to help other individuals and organizations benefit from his experiences.

 References:

[1] Sinek, S. (2019b). Infinite Game (1. Aufl.). London, United Kingdom: Portfolio Penguin.

[2] Manifesto for Agile Software Development. (n.d.). Retrieved June 13, 2020, from https://agilemanifesto.org/

[3] Sutherland, J., & Sutherland, J. J. (2014). Scrum: The Art of Doing Twice the Work in Half the Time (1st ed.). London, UK: Currency.

[4] Knaster, R., & Leffingwell, D. (2018). SAFe 4. 5 Distilled. Boston, United States: Addison Wesley.

[5] Larman, C. (2016). Large-Scale Scrum: More with Less (Addison-Wesley Signature Series (Cohn)) (1st ed.). Boston, United States: Addison-Wesley Professional.

[6] Sutherland, J. S. & Scrum Inc. (o. J.). Sutherland, J. S., & Scrum Inc. (n.d.). THE SCRUM@SCALE GUIDE. Retrieved June 18, 2020, from https://www.scrumatscale.com/wp-content/uploads/ScrumatScaleGuide-Published3.15.20.DrJeffSutherland.pdf