The Infinite Game Starts With Values
By Ty Hagler | 5 Minute Read
I’ve been tuning into Simon Sinek’s work lately. His book, Start With Why resonates with our focus on culture and values. It was his 2015 TED talk though, What Game Theory Teaches Us About War that tied together two concepts in a novel way. Though Simon is talking primarily about geopolitical strategy, the core concept applies to businesses of any scale.
As Sinek shares, the point of a finite game is to win, beating your competitor and closing the sale. So many businesses operate on a finite time horizon, making decisions based on the expedient and short term self interest. For example, a startup founder may be so desperate to grow that he gives equity to investors who don’t align with his vision and values, leading to needless conflict and distractions down the road. Or consider that the once mighty retailer Sears made cost-saving changes to their appliance installation service model that became a nightmare for customers and accelerated the decline in repeat business. A finite perspective focuses on manipulation sales tactics and reciprocal competitive moves that win the quarterly earnings report and maximize shareholder value at the expense of consistency.
In an infinite game, by contrast, the objective is to perpetuate the game. The startup founder starts with commitment-based culture, values, and finding an inspirational sense of purpose that would attract like-minded team members. With a shared sense of purpose, only then does the team begin to build their Minimum Viable Product and seek out investors. As the firm scales, the team makes decisions to preserve the culture and values well past the normal end game of an IPO. Herb Kelleher, CEO of Southwest Airlines, describes their contrarian Infinite game rules this way:
“Employees come first. If employees are treated right, they treat the outside world right. The outside world uses the company’s product again and the shareholder is happy.” - Herb Kelleher
The Infinite Game Starts With Values
What is something that you are not willing to compromise on, regardless of pressure from the outside world? Individually, this might be family, faith, and integrity as guides to navigate the turbulent day-to-day. When a team makes decisions about values, they not only become a core part of the group identity, but provide stability, consistency, and focus to achieve even bigger goals. Team values only have merit if they are consistently applied. Values should be the filter for evaluating whether to hire, fire, celebrate, or coach individual team members. What struck me about Simon’s talk was his assertion that the only way to play an infinite game is through consistency in adhering to values, regardless of the short term expense. Consistency in applying values gives employees, customers, vendors, and partners something to trust and believe in.
Pragmatically speaking, how does this affect daily decisions at a values-driven company? Some decisions come easily, but for those that require contemplation, we ask ourselves, "Is this consistent with our core values?" If the core values at your organization are poorly defined, then an excellent substitute can be found through the Rotary Four-Way Test originally composed in 1930 by Herbert Taylor:
Is it the truth?Is it fair to all concerned?Will it build goodwill and better friendships?Will it be beneficial to all concerned?
Stabilizers and Accelerators
In a recent Scaling with Data podcast interview, our friend Sean Steigerwald asked me a great question, "As an innovation consultant, why do you spend so much time writing about culture?" My answer wasn't great at the time, hence it didn't air in the podcast. Upon reflection, I think it comes down to finding Stabilizers to balance Accelerators. Accelerators are those disruptive forces of change across the business and societal landscape. Change is a healthy mechanism of renewal, but too much change leads to chaos. Stabilizers are those institutions of order that resist change and provide stability and dependability in the face of chaos. Too much order leads to tyranny and decay, hence the reinvention and acceleration process begins anew.
One of my favorite business school professors, Tony O'Driscoll, once defined strategy formulation as a process of deciding what you WON'T do. This profound bit of wisdom can be applied to decisions of what markets to compete in or products to offer by bracketing and narrowing the focus, but even more so, applies to core values. Core values and a commitment culture are a powerful stabilizer that provide both consistency and permission to change. Healthy, vibrant organizations that play the infinite game have to be continually reinventing themselves and pruning the weeds to discover new accelerators. As innovators, we find balance in our perpetual focus on change through grounding our culture in consistency of values.