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Collection: Leadership - #4 Simon Sinek | Finite Game vs. Infinite Game



And that's where I go to the second point. After empathy comes perspective, where it's not about winning or losing.

In game theory, there are two kinds of games; there are finite games and there are infinite games. And this is how you're going to change your perspective, right?

A finite game is defined as known players, fixed rules and an agreed upon objective. Baseball, for example, we know the rules, we all agree to the rules, and whoever has more runs of the end of nine innings is the winner and the game is over.

No one ever says, "If we can just play two more innings, I know we can come back." It doesn't work that way. The game is over, right? That's a finite game.

Then you have an infinite game, infinite games are defined as known and unknown players, the rules are changeable and the objective is to keep the game in play, to perpetuate the game.

When you pit a finite player versus a finite player, the system is stable, baseball is stable, right? When you pit an infinite player versus an infinite player, this system is also stable like the Cold War for example, because there cannot be a winner and a loser. There are no winners and losers in an infinite game, right? It doesn't exist.

And because there are no winners or losers, what ends up happening in the infinite contest is players drop out when they run out of the will or the resources to play. But there's no winners or losers.

Problems arise when you pit a finite player versus an infinite player because finite players playing to win and an infinite player is to playing to keep the game going, right?

This is what happened to us in Vietnam, we were playing to win and the Vietnamese were fighting for their lives. We are the ones who got stuck in Quagmire. This is the Soviet Union and Afghanistan. They were trying to beat the Mujahideen and the Mujahideen would fight for as long as is necessary. Quagmire.

Now, let's look at business. The game of business has pre-existed or has existed long before every single company that exists on this planet today. And it will outlast every single company that includes that exists on the planet today. There's no winning the game of business.

And the reason is, is because we haven't agreed to the rules. I get such a kick out of this. You realize how many companies actually don't know the game they're in, right? Listen to the language of the companies use; We're trying to beat our competition, we're trying to be number one, did you know that we were ranked number one?

Look at the listing, based on what criteria? Revenues, profits, market shares, square footage, number of employees... Based on what time frame? A quarter, a year, 5 years, 10 years, 20 years, 50 years, a 100 years...

I haven't agreed to those standards. How can you declare yourself the winner? How can you declare yourself number one where no one else in the game has agreed to the rules? It's arbitrary. There is no winning because there's no end.

In other words, companies are finite games, listen to their language, they're trying to beat their competition. What does that even mean? It's the leaders and the companies that understand the game that they're in and organize their resources and their decision-making around the infinite contest that outlast and frustrate their competition.

All the companies that we've referred to as the exceptions; Southwest Airlines, Apple Computers, Harley-Davidson... They're the exception. No, they're playing the infinite contest. They frustrate their competition is what happens. That's what happens because they're not playing to win.

Jim Sinegal the founder of Costco which is the company – the only real company that gives Walmart a run for its money. He says public companies are looking to succeed for the quarters as we're looking for the next 50 years. You could hear him, he's playing the infinite contest.

I spoke at a Leadership Summit for Microsoft, I also spoke at a Leadership Summit for Apple. Now, at the Microsoft Summit, I would say 70% of the executives – and this was under the Steve Ballmer days – it will say about 70% of the executives, spent about 70% of their presentations talking about how to beat Apple. At the Apple Summit, a 100% of the executives spent a 100% of their presentations talking about how to help teachers teach and how to help students learn.

One was obsessed with their competition. The other one was obsessed with where they're going. So at the end of my presentation at Microsoft, they gave me a gift. They gave me the news Zune, which was the competitive of the iPod Touch when it was a thing, right? And I have to tell you this piece of technology was spectacular. It was beautiful, the user interface was incredible. The design was amazing. It was intuitive. It was one of the most beautiful elegant pieces of technology I'd ever seen, right?

Now, they didn't work with iTunes, which is an entirely different problem, I couldn't use it. (Laughter) But that's something else.

I'm sitting in the back of a taxi with a senior Apple executive, sort of employee number 12 kind of guy, and I decide to stir the pot. And I turned to him I say, "You know, I spoke at a Microsoft Summit and they gave me their new Zune and I have to tell you it is so much better than your iPod Touch."

And he turned to me, and said, "I have no doubt." Conversation over. (Laughter)

Because the infinite player isn't playing to be number one, every day, with every product, they're playing to outlast the competition. If I had said to Microsoft, "Oh, I've got the new iPod Touch, it so much better than your new Zune."

They will say, "Can we see it? What does it do? How? We have to see it." Because one is obsessed with their competition, the other is obsessed with why they do what they do, the others obsessed with where they're going.

And the reason Apple frustrates their competition is because secretly, they're not even competing against them, they're competing against themselves. And they understand that sometimes you're a little bit ahead and sometimes you're a little bit behind, and sometimes your product is better and sometimes you're not.

But if you wake up every single morning and compete against yourself, how do I make our products better than they were yesterday? How do I take care of our customers better than we did yesterday? How do we advance our cause more efficiently more productively than we did yesterday? How do we find new solutions to advance our calling, our cause, our purpose, our belief, our why every single day?

What you'll find is over time, you will probably be ahead more often. Those who play the infinite game understand, it's not about the battle, it's about the war. And they don't play to win every day and they frustrate their competition until competition drops out of the game.

Every single bankruptcy, almost every merger and acquisition is basically a company saying, "We no longer have the will or the resources to continue to play. And we have no choice to either drop out of the game or merge our resources with another player so that we can stay in the game."

That's what that is. And you think about the number of bankruptcies and mergers and acquisitions, its kind of proof that most companies don't even know the game they're in.

You want to be a great leader start with empathy, you want to be a great leader change your perspective and play the game you're actually playing. Thank you very much. (Applause)



[YAPSS Takeaway]

If you want to play it well, first know which game are you in.

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