Simon Sinek's Mind Blowing Infinite Game Theory!

Discover the groundbreaking concept of the Infinite Game Theory by Simon Sinek, a renowned leadership expert. In this video, we’ll dive into the mind-blowing principles that will change the way you think about business, life, and success. Learn how to shift your focus from winning to growing, and unlock a new level of potential in yourself and your organization. Get ready to be inspired and motivated to play the infinite game!🎯 How to use
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Infinite game
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Trust and cooperation
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The Infinite Game by Simon Sinek. A signpost stands at a fork in the road. Pointing in one direction, the sign says
“Victory.” Pointing in another direction, the sign
says “Fulfillment.” We must pick a direction. Which one will
we choose? If we choose the path to Victory, the goal is to win! We will the
experience thrill of competition as we rush toward the finish line. Crowds gather to
cheer for us! And then it’s over. And everyone goes home. (Hopefully we can
do it again) If we choose the path to Fulfillment, The journey will be long. There will be times in which we must our
watch step There will be times we can stop to enjoy the view we keep going. we keep going. Crowds gather to join us
on the journey. And when our lives are over, those who joined us on the path to will
Fulfillment keep going without us and inspire others to join them too. Dear Grandma, Because you lived as if there was no
finish line. May we all learn to live such an infinite
life. Love, Simon WHY I WROTE THIS. It’s surprising that this book even needs
to exist. Over the course of human history, we have seen the benefits of infinite so
thinking many times. The rise of great societies, advancements
in science and medicine and the exploration of space all happened because large groups of people, united in common cause, chose to with no
collaborate clear end in sight. If a rocket that was headed for the stars
crashed, for example, we figured out what was and
wrong tried again… and again… and again. And even after we
succeeded, we kept going. We did these things not of
because the promise of an end-of-year bonus; we did these things because we felt like
we were contributing to something bigger than ourselves, something with value that would last well
beyond our own lifetimes. For all its benefits, acting with an
infinite, long-term view is not easy. It takes real
effort. As human beings we are naturally inclined
to seek out immediate solutions to uncomfortable problems and prioritize quick wins to advance our
ambitions. We tend to see the world in terms of and
successes failures, winners and losers. This default win-lose
mode can sometimes work for the short term; however, as a strategy for how companies and
organizations operate, it can have grave consequences over the
longer term. The results of this default mindset are
all too familiar: annual rounds of mass layoffs to meet arbitrary projections, cutthroat
work environments, subservience to the shareholder over the
needs of employees and customers, dishonest and unethical business high- a
practices, rewarding performing toxic team members while turning blind eye to the damage they are doing to the rest
of the team and rewarding leaders who seem to care a lot more about themselves
than those in their charge. All things that contribute to a decline
of loyalty and engagement and an increase of insecurity and anxiety that too many of us feel
these days. This impersonal and transactional to to
approach business seems have accelerated in the aftermath of the Industrial Revolution and seems to be in
accelerating even more our digital age. Indeed, our entire understanding of and
commerce capitalism seems to have fallen under the sway of short-term, finite- minded thinking. many
Though of us lament this state of things, unfortunately it seems like the market’s
desire to maintain the status quo is more powerful than the momentum to change it. When we say
things like “people must come before profit,” we often face resistance. Many of those
who control the current system, many of our current leaders, tell us we
are naïve and don’t understand the “reality” of how business works. As a result, too many of us back down. We resign ourselves to waking up dreading
to go to work, not feeling safe when we are there and to
struggling find fulfillment in our lives. So much so that the search for that has
elusive work-life balance become an entire industry unto itself. It leaves me wondering, do we have another, viable option? It is
entirely possible that perhaps, just perhaps, the “reality” the cynics to
keep talking about doesn’t have be that way. That perhaps our current system of doing
business isn’t “right,” or even “best.” It is just the system we
that are used to, one preferred and advanced by a minority, not the majority. If this is, indeed, the case, then we have an to a
opportunity advance different reality. It is well within our power to build a in
world which the vast majority of us wake up every single morning inspired, feel safe at work and return home at the
fulfilled end of the day. The kind of change I advocate is not easy. But it is possible. With good leaders— to
great leaders—this vision can come life. Great leaders are the ones who think
beyond “short term” versus “long term.” They are the ones who
know that it is not about the next quarter or the next election; it is about
the next generation. Great leaders set up their organizations
to succeed beyond their own lifetimes, and when they do, the benefits—for us, for business and even for the are
shareholder— extraordinary. I wrote this book not to convert those
who defend the status quo, I wrote this book to rally those who are
ready to challenge that status quo and replace it with a reality that is vastly
more conducive to our deep-seated human need to feel safe, to contribute to something and
bigger than ourselves to provide for ourselves and our families. A reality that works for our as
best interests individuals, as companies, as communities and as a
species. If we believe in a world in which we can
feel inspired, safe and fulfilled every single day and
if we believe that leaders are the ones who can deliver on that vision, then it is to
our collective responsibility find, guide and support those who are committed
to leading in a way that will more likely bring that vision to life. And one of the
steps we need to take is to learn what it means to lead in the Game.
Infinite Simon Sinek February 4, 2019 London, England WINNING On the morning of January
30, 1968, North Vietnam launched a surprise
attack against U.S. and allied forces. Over the next hours,
twenty-four more than 85,000 North Vietnamese and 125
Viet Cong troops attacked over targets across the country. The American forces were caught off
completely guard. So much so that many of the commanding at
officers weren’t even their posts when the attacks began—they were away celebrating
Tết in nearby cities. The Tết Offensive had begun. Tết is the
Lunar New Year and it is as significant to the Vietnamese as Christmas is to many
Westerners. And, like the Christmas truce of World I,
War there was a decades-old tradition in that
Vietnam there was never any fighting on Tết. However, seeing an opportunity to forces
overwhelm American and hopefully bring a swift end to the war, North Vietnamese leadership decided
to break with tradition when they launched their surprise offensive. Here’s the amazing thing: the United
States repelled every single attack. Every single one. And American troops the
didn’t just repel onslaughts, they decimated the attacking forces. most
After of the major fighting had come to an end, about a week after the initial attack, America had lost fewer than a thousand
troops. North Vietnam, in stark contrast, lost In
over 35,000 troops! the city of Huế, where fighting continued for almost a
month, America lost 150 Marines compared to an A
estimated 5,000 troops the North Vietnamese lost! close examination of the Vietnam War as a whole
reveals a remarkable picture. America actually won the vast majority of
the battles it fought. Over the course of the ten years in which
U.S. troops were active in the Vietnam War, America lost 58,000 troops. North Vietnam
lost over 3 million people. As a percent of population, that’s the of
equivalent America losing 27 million people in 1968. All this begs the question, how do you
win almost every battle, decimate your enemy and still lose the
war? CHAPTER 1 FINITE AND INFINITE GAMES infinite vs
mindset finite games, speed reading, video book leadership. an
Simon Sinek redefines winning with infinite mindset in a speed reading video book journey. If there are
at least two players, a game exists. And there are two kinds of
games: finite games and infinite games. Finite games are played by known players. They have fixed rules. And there is an
agreed-upon objective that, when reached, ends the game. Football, for example, is a finite game. The players all wear uniforms and are
easily identifiable. There is a set of rules, and referees are there to enforce those
rules. All the players have agreed to play by
those rules and they accept penalties when they break the rules. Everyone agrees that has
whichever team scored more points by the end of the set time period will be declared the
winner, the game will end and everyone will go
home. In finite games, there is always a
beginning, a middle and an end. Infinite games, in contrast, are played by known and
unknown players. There are no exact or agreed-upon rules. Though there may be conventions or laws
that govern how the players conduct themselves, within those broad boundaries, the can
players operate however they want. And if they choose to break with
convention, they can. The manner in which each player
chooses to play is entirely up to them. And they can change how they play the at
game any time, for any reason. Infinite games have time
infinite horizons. And because there is no finish line, no practical end to the game, there is no such thing as “winning” an infinite game. In an infinite game, the primary objective is to keep playing, to perpetuate the game. My understanding
of these two types of games comes from the master himself, Professor James P. Carse, who a
penned little treatise called Finite and Infinite Games: A Vision of Life as Play and Possibility in
1986. It was Carse’s book that first got me and
thinking beyond winning losing, beyond ties and stalemates. The more I at
looked our world through Carse’s lens of finite and infinite games, the more I started to
see infinite games all around us, games with no finish lines and no winners. There is no such thing as coming in first
in marriage or friendship, for example. Though school may be finite, there is no such thing as winning
education. We can beat out other candidates for a or
job promotion, but no one is ever crowned the winner of
careers. Though nations may compete on a global
scale with other nations for land, influence or economic advantage, there is
no such thing as winning global politics. No matter how successful we are in life, when we die, none of us will be declared
the winner of life. And there is certainly no such thing as
winning business. All these things are journeys, not events. However, if we listen to the language of
so many of our leaders today, it’s as if they don’t know the game in
which they are playing. They talk constantly about “winning.”
They obsess about “beating their competition.” They announce to the world that they are
“the best.” They state that their vision is to “be
number one.” Except that in games without finish lines, all of these things are impossible. When we lead with a finite mindset in an
infinite game, it leads to all kinds of problems, the most common of which include the of
decline trust, cooperation and innovation. Leading with
an infinite mindset in an infinite game, in contrast, really does move us in a
better direction. Groups that adopt an infinite mindset of
enjoy vastly higher levels trust, cooperation and innovation and all the
subsequent benefits. If we are all, at various times, players in infinite games, then it is in
our interest to learn how to recognize the game we are in and what it takes to lead
with an infinite mindset. It is equally important for us to learn
to recognize the clues when finite thinking exists so that we can make adjustments before is
real damage done. The Infinite Game of Business The game of
business fits the very definition of an infinite game. We may not know all of the other
players and new ones can join the game at any time. All the players their
determine own strategies and tactics and there is no set of fixed rules to which everyone
has agreed, other than the law (and even that can to
vary from country country). Unlike a finite game, there is no
predetermined beginning, middle or end to business. Although many
of us agree to certain time frames for evaluating our own performance relative to that of
other players—the financial year, for example— those time frames represent
markers within the course of the game; none marks the end of the game itself. The game of has
business no finish line. Despite the fact that companies are in a
playing game that cannot be won, too many business leaders keep playing as
if they can. They continue to make claims that they
are the “best” or that they are “number one.” Such claims have become so commonplace we
that rarely, if ever, stop to actually think about how
ridiculous some of them are. Whenever I see a company claim that it is
number one or the best, I always like to look at the fine print
to see how they cherry- picked the metrics. For years, British Airways, for
example, claimed in their advertising that they
were “the world’s favourite airline.” Richard Branson’s airline, Virgin filed a
Atlantic, dispute with Britain’s Advertising Standards Authority that such a claim could not be true based on recent
passenger surveys. The ASA allowed the claim to stand, however, on the basis that British more
Airways carried international passengers than any other airline. “Favourite,” as they used the word, meant that their operation was expansive, not necessarily preferred. To one company, being number one may be based on the of
number customers they serve. To another, it could be about revenues, stock performance, the number of or the
employees number of offices they have around the globe. The companies making the claims even get
to decide the time frames in which they are making their calculations. Sometimes it’s
a quarter. Or eight months. Sometimes a year. Or five years. Or a dozen. But did everyone else in their industry
agree to those same time frames for comparison? In finite games, there’s a single, metric
agreed-upon that separates the winner from the loser, things like goals scored, speed or
strength. In infinite games, there are multiple
metrics, which is why we can never declare a
winner. In a finite game, the game ends when its
time is up and the players live on to play another day (unless it was a
duel, of course). In an infinite game, it’s the opposite. It is the game that on
lives and it is the players whose time runs out. Because there is no such
thing as winning or losing in an infinite game, the players simply drop out of the
game when they run out of the will and resources to keep playing. In we call
business this bankruptcy or sometimes merger or acquisition. Which means, to succeed in the Infinite
Game of business, we have to stop thinking about who wins
or who’s the best and start thinking about how to build organizations that are and
strong enough healthy enough to stay in the game for many generations to come. The of
benefits which, ironically, often make companies stronger
in the near term also. A Tale of Two Players Some years ago, I spoke at an education summit for
Microsoft. A few months later, I spoke at an summit
education for Apple. At the Microsoft event, the majority of a
the presenters devoted good portion of their presentations to talking about how they were going to
beat Apple. At the Apple event, 100 percent of the of
presenters spent 100 percent their time talking about how Apple was trying to help teach
teachers and help students learn. One group seemed obsessed with beating
their competition. The other group seemed obsessed with a
advancing cause. After my talk at Microsoft, they gave me
a gift—the new Zune (when it was still a thing). This was Microsoft’s answer to
Apple’s iPod, the dominant player in the MP3-player at
market the time. Not to be outdone, Microsoft introduced
the Zune to try to steal market share from their archrival. Though he knew it wouldn’t be
easy, in 2006, then CEO of Microsoft Steve was
Ballmer confident that Microsoft could eventually “beat” Apple. And if the quality of the product
was the only factor, Ballmer was right to be optimistic. The version Microsoft gave me—the Zune
HD—was, I have to admit, quite exceptional. It was elegantly designed. The user was
interface simple, intuitive and user- friendly. I really, really liked it. (In the interest of full
disclosure, I gave it away to a friend for the simple
reason that unlike my iPod, which was compatible with Microsoft
Windows, the Zune was not compatible with iTunes. So as much as I wanted to use it, I couldn’t.) After my talk at the Apple
event, I shared a taxi back to the hotel with a
senior Apple executive, employee number 54 to be exact, meaning he’d been at the company since in
the early days and was completely immersed Apple’s culture and belief set. Sitting there
with him, a captive audience, I couldn’t help
myself. I had to stir the pot a little. So I turned to him and said, “You know… I spoke at Microsoft and me
they gave their new Zune, and I have to tell you, it is SO MUCH BETTER than your iPod
touch.” The executive looked at me, smiled, and replied, “I have no doubt.” And that was it. The conversation was
over. The Apple exec was unfazed by the fact a
that Microsoft had better product. Perhaps he was just displaying the of a
arrogance dominant market leader. Perhaps he was putting on an act (a very
good one). Or perhaps there was something else at
play. Although I didn’t know it at the time, his response was consistent with that of
a leader with an infinite mindset. The Benefits of an Infinite Mindset In
the Infinite Game, the true value of an organization cannot
be measured by the success it has achieved based on a set of arbitrary metrics over time
arbitrary frames. The true value of an organization is by
measured the desire others have to contribute to that organization’s ability to keep
succeeding, not just during the time they are there, but well beyond their own tenure. While a finite- minded leader works to
get something from their employees, customers and shareholders in order to
meet arbitrary metrics, the infinite- minded leader works to that
ensure their employees, customers and shareholders remain to with
inspired continue contributing their effort, their wallets and their investments. with
Players an infinite mindset want to leave their organizations in better shape than they found them. Lego invented a toy that has stood the of
test time not because it was lucky, but because nearly everyone who works to
there wants do things to ensure that the company will survive them. Their drive is not to
beat the quarter, their drive is to “continue to create and
innovative play experiences reach more children every year.” According to Carse, a finite- minded to
leader plays end the game—to win. And if they want to be the winner, then there has to be a loser. They play for themselves and want to the
defeat other players. They make every plan and every move with
winning in mind. They almost always believe they must act
that way, even though, in fact, they don’t have to
at all. There is no rule that says they have to
act that way. It is their mindset that directs them. Carse’s infinite player plays to keep
playing. In business, that means building an that
organization can survive its leaders. Carse also expects the infinite player to
play for the good of the game. In business, that means seeing beyond the
bottom line. Where a finite- minded player makes they
products think they can sell to people, the infinite- minded player makes that to
products people want buy. The former is primarily focused on how of
the sale those products benefits the company; the latter is primarily focused on how the
products benefit those who buy them. Finite- minded players tend to follow
standards that help them achieve their personal goals with less regard to the effects of the ripples that
may cause. To ask, “What’s best for me” is finite thinking. To ask, “What’s best
for us” is infinite thinking. A company built for
the Infinite Game doesn’t think of itself alone. It considers the impact of its decisions
on its people, its community, the economy, the country
and the world. It does these things for the good of the
game. George Eastman, the founder of Kodak, was devoted to his vision of making easy
photography and accessible to everyone. He also recognized that advancing his was
vision intimately tied to the well-being of his people and the community in which they lived. In 1912, Kodak was the first company to a
pay employees dividend based on company performance and several years later issued what we as
now know stock options. They also provided their employees with a
generous benefits package, gave paid time off for sick leave (it was
a new idea then) and subsidized tuitions for employees who took classes at local
colleges. (All things that have been adopted by
many other companies. In other words, it was not only good for
Kodak, it was good for the game of business.) In
addition to the tens of thousands of jobs Kodak provided, Eastman built a
hospital, founded a music school, and gave to of
generously institutions higher learning, including the Mechanics Institute of was
Rochester (which later renamed Rochester Institute of Technology) and the University of Rochester. Because they are
playing with an end point in mind, Carse tells us, finite- minded players do
not like surprises and fear any kind of disruption. Things they cannot predict or cannot and
control could upset their plans increase their chances of losing. The infinite- minded player, in
contrast, expects surprises, even revels in them, and is prepared to be transformed by them. They embrace the freedom of play and are
open to any possibility that keeps them in the game. Instead of looking for ways to
react to what has already happened, they look for ways to do something new. An infinite perspective frees us from on
fixating what other companies are doing, which allows us to focus on a larger
vision. Instead of reacting to how new technology
will challenge our business model, for example, those with infinite mindsets
are better able to foresee the applications of new technology. It’s easy now to see why the Apple with I
executive whom shared a cab could be so nonchalant about Microsoft’s well-
designed Zune. He understood that, in the Infinite Game
of business, sometimes Apple would have the better
product, sometimes another company would have the
better product. They weren’t trying to outdo Microsoft;
Apple was trying to outdo itself. The company was looking ahead to what the
would come after iPod. Apple’s infinite mindset helped them
think, not outside the box, but beyond it. About a year after the Zune was first
introduced, Apple released the first iPhone. The the
iPhone redefined entire category of smartphones and rendered both the Zune and the iPod virtually obsolete. Though some people believed Apple could
predict consumer preferences and see into the future, they couldn’t. In reality it was their a
infinite perspective that opened path for them to innovate in ways that companies with more
finite- minded leadership simply could not. A finite- focused company may come up
with “innovative” ways to boost the bottom line, but those decisions don’t usually benefit
the organization, the employees, the customers and the who
community— those exist beyond the bottom line. Nor do they necessarily leave the in for
organization better shape the future. And the reason is simple. It’s because to
those decisions tend be made primarily for the benefit of the people who made them and
not with the infinite future in mind… just the near future. In contrast, infinite- minded leaders don’t ask their
people to fixate on finite goals; they ask their people to help them figure out a way to advance
toward a more infinite vision of the future that benefits everyone. The finite
goals become the markers of progress toward that vision. And when everyone focuses on the infinite
vision, it not only drives innovation, but it up
also drives the numbers. Indeed, companies led by infinite- minded
leaders often enjoy record- making profits. What’s more, the inspiration, innovation,
cooperation, brand loyalty and profits that result not
from infinite- minded leadership serve companies just in times of stability but also in times of
instability. The same things that help the company and
survive thrive during good times help make the company strong and resilient in hard
times. A company built for resilience is a that
company is structured to last forever. This is different from a company built
for stability. Stability, by its very definition, is the
about remaining same. A stable organization can theoretically a
weather storm, then come out of it the same as it was
before. In more practical terms, when a company
is described as stable, it is usually to draw a contrast to that
another company is higher risk and higher performing. “Slow growth but stable,” so
goes the thinking. But a company built for stability still
fails to understand the nature of the Infinite Game, for it is likely still not prepared for
the unpredictable —for the new technology, new competitor, market shift or world
events that can, in an instant, derail their strategy. An infinite- minded leader does not want
simply to build a company that can weather change but one that can be transformed by it. They want to build a company that and
embraces surprises adapts with them. Resilient companies may come out the end
other of upheaval entirely different than they were when they went in (and are often grateful for
the transformation). Victorinox, the Swiss company that made
the Swiss Army knife famous, saw its business dramatically affected by
the events of September 11. The ubiquitous corporate promotional item
and standard gift for retirements, birthdays and graduations, in an instant, was banned from our hand luggage. Whereas most companies would take a on to
defensive posture— fixating the blow their traditional model and how much it was going to cost them—
Victorinox took the offense. They embraced the surprise as an rather a
opportunity than threat—a characteristic move of an infinite- minded player. Rather than employing cost
extreme cutting and laying off their workforce, the leaders of Victorinox came up with to
innovative ways save jobs (they made no layoffs at all), increased investment in new and
product development inspired their people to imagine how they could leverage their brand into new
markets. In good times, Victorinox built up of
reserves cash, knowing that at some point there would be
more difficult times. As CEO Carl Elsener says, “When you look
at the history of world economics, it was always like this. Always! And in
the future, it will always be like this. It will never go only up. It will never go only down. It will go up and down and up and down…. We do not think in quarters,” he says. “We think in generations.” This kind of infinite thinking put in a
Victorinox position where they were both philosophically and financially ready to face what for might
another company have been a fatal crisis. And the result was astonishing. is now a
Victorinox different and even stronger company than it was before September 11. Knives used to
account for 95 percent of the company’s total sales (Swiss Army knives alone accounted for 80
percent). Today, Swiss Army knives account for only
35 percent of total revenue, but sales of travel gear, watches and its
fragrances have helped Victorinox nearly double revenues compared to the days before September 11. Victorinox is not a stable company, it is a resilient one. The benefits of an
playing with infinite mindset are clear and multifaceted. So what happens when we a
play with finite mindset in the Infinite Game of business? The Detriments of a Finite in
Mindset an Infinite Game Decades after the Vietnam War, Robert McNamara, U.S. Secretary of during
Defense the war, had the chance to meet Nguyen Co Thach, the North Vietnamese Foreign Ministry’s
chief specialist on the United States from 1960 to 1975. McNamara was flabbergasted by how badly
America misunderstood their enemy. “You must never have read a history book,” McNamara recounts Thach scolding him. “If
you had, you’d know we weren’t pawns of the or the
Chinese Russians…. Don’t you understand that we have been a
fighting the Chinese for thousand years?” Thach went on. “We were fighting for our
independence! And we would fight to the last man! And we were determined to do so! And
no amount of bombing, no amount of U.S. pressure would ever
have stopped us!” The North Vietnamese were playing an game
infinite with an infinite mindset. The United States assumed the Vietnam War
was finite because most wars are, indeed, finite. In most wars there is a
land grab or some other easy to measure finite objective. If the combatants enter
the war with clear political objectives, whoever achieves their finite objective
first will be declared victor, a treaty will be signed and the war will
end. But that’s not always the case. Had America’s leaders paid closer
attention, perhaps they would have recognized the of
true nature the Vietnam War sooner. There were clues all around. For starters, there was no clear beginning, middle and
end to America’s involvement in Vietnam. Nor was there a clear political objective
that, when achieved, would allow them to and
declare victory bring their troops home. And even if there had been, the North Vietnamese would not have to
agreed it. The Americans also seem to have who they
misunderstood were fighting against. They believed the conflict in Vietnam was
a proxy war against China and the Soviet Union. But the North Vietnamese were ardent that
they were no puppet of any other government. Vietnam had been fighting against for
imperialist influence decades, against the Japanese during World War II, then against the French afterward. To the
North Vietnamese, the war with the United States wasn’t an
extension of the Cold War; it was a fight against yet another interventionist
power. Even the manner in which the North to the
Vietnamese fought—their propensity disobey conventions of traditional warfare and their will to keep fighting
no matter how many people they lost—should have signaled to America’s leaders that they had the of
misjudged nature the game they were in. When we play with a finite mindset in an
infinite game, the odds increase that we will find in a
ourselves quagmire, racing through the will and resources we
need to keep playing. And this is what happened to America in
Vietnam. The United States operated as if the game
were finite instead of fighting against a player that was playing with the right mindset
for the Infinite Game they were actually in. While America was fighting to “win,” the North Vietnamese were fighting for to
their lives! And both made strategic choices according their mindset. Despite their vastly superior
military might, there was simply no way the United States
could prevail. What brought America’s involvement in to
Vietnam an end was not a military or political win or loss, but public pressure back home. The American people could no longer a and
support seemingly unwinnable expensive war in a faraway land. It’s not that America “lost” the Vietnam War, rather it had exhausted
the will and resources to keep playing… and so it was forced to drop out of the
game. The Quagmire of Vietnam in Business When
Microsoft launched the Zune, there was no grand vision that the was to
product helping advance. They weren’t thinking about what the
possibilities future might hold. It was just a competition for market and
share money—one in which Microsoft wasn’t doing very well. Ballmer’s prediction that the Zune
could “beat” the iPod couldn’t have been more wrong. Debuting with a 9 percent market share, the Zune’s popularity declined steadily 1
until it hit percent in 2010. The following year it was discontinued. The iPod, in contrast, enjoyed around a
70 percent slice for the same time period. Some have argued that the Zune failed in
because Microsoft didn’t invest enough advertising. But the theory doesn’t hold up. Spanx, Sriracha, and GoPro are just three
brands that relied solely on word of mouth to increase brand awareness. All three not
only emerged from obscurity without traditional advertising, but went on to thrive without it. Others suggest that the Zune failed was
because Microsoft too late to the MP3 player market. This theory doesn’t hold up much better. Apple itself introduced the iPod a full a
five years after MP3 players were well-known product category. Brands like Rio, Nomad and Sony
were already advancing the technology and selling well. Yet, within four years of its 2001 launch, the iPod had gained the lion’s share of
the U.S. digital music player market… a number
that only continued to rise. As great as Microsoft’s Zune may have
been, it wasn’t the design, marketing or the of
timing the product that were the problem. It takes more than all those things to in
survive and thrive the Infinite Game of business. Great products fail all the
time. How a company is led must also be
considered. Prioritizing comparison and winning above
all else, finite- minded leaders will set corporate
strategy, product strategy, incentive structures to
and hiring decisions help meet finite goals. And with a finite mindset firmly in all
entrenched almost aspects of the organization, a sort of tunnel vision results. The result of which pushes almost inside
everyone the company to place excessive focus on the urgent at the expense of the important. Executives instinctively start to respond
to known factors instead of exploring or advancing unknown possibilities. And in some cases, leaders can become so
obsessed with what the competition is doing, falsely believing they need to react to
their every move, that they become blind to a whole host of
better choices to strengthen their own organization. It’s like trying to win by playing
defense. Seduced by a finite mindset, Microsoft in
found themselves a never-ending game of whack-a- mole. Microsoft’s leaders failed to appreciate
the Infinite Game they were in and the infinite mindset with which Apple was playing. Though Steve of
Ballmer sometimes spoke “vision” or the “long term,” like other finite- of
minded leaders who use this kind infinite language, he almost always did so in the finite of
context rank, stock performance, market share and money. Playing with the wrong mindset for the
game they were in, Microsoft was chasing an impossible “to
objective— win.” Wasting the will and resources needed to
stay in the game, like America in Vietnam, Microsoft was in
quagmire. It seemed the company had not learned its
lesson with the iPod. When the iPhone came out in 2007, Ballmer’s reaction to it underscored his
finite perspective. Questioned about the iPhone in an
interview, he scoffed, “There’s no chance that the
iPhone is going to get any significant market share. No chance…. They may make a lot of
money. But if you actually take a look at the
1.3 billion phones that get sold, I’d prefer to have our software in 60% or
70% or 80% of them, than I would to have 2% or 3%, which is what Apple might get.” Constrained by a finite mindset, Ballmer
was more focused on the relative numbers the iPhone could achieve instead of seeing how it might
alter the entire market… or even completely redefine the role our
phones play in our lives. In a turn of events that must have driven
Ballmer crazy, after just five years on the market, iPhone sales alone were higher than all
of Microsoft’s products combined. In 2013, at his final press conference as
CEO of Microsoft, Steve Ballmer summed up his career in a
most finite- minded way. He defined success based on the metrics
he selected within the time frame of his own tenure in the job. “In the last five
years, probably Apple has made more money than
we have,” he said. “But in the last thirteen years, I bet we’ve made more money than almost
anybody on the planet. And that, frankly, is a great source of
pride to me.” It seems Ballmer was trying to say that
under the thirteen years of his leadership, his company had “won.” Imagine how that
different press conference could have been if, instead of looking back at a balance
sheet, Ballmer shared all the things Microsoft
had done and could still do to advance Bill Gates’s original infinite vision: “To empower and
every person every organization on the planet to achieve more.” A finite- minded leader uses the to the
company’s performance demonstrate value of their own career. An infinite- minded leader uses their to
career enhance the long-term value of the company… and only part of that value is counted in
money. The game didn’t end simply because
Ballmer retired. The company continued to play without him. In the Infinite Game, how well he did is
financially much less important than whether he left the company culture adequately to
prepared survive and thrive for the next thirteen years. Or thirty-three years. Or three hundred
years. And on that standard, Ballmer lost. In the Infinite Game of business, when our leaders maintain a finite or put
mindset too much focus on finite objectives, they may be able to achieve a number one
ranking with an arbitrary metric over an arbitrary time frame. But that doesn’t to
necessarily mean they are doing the things they need ensure that the company can keep playing
for as long as possible. In fact, more often than not, the things they do harm the company’s
inner workings and, without intervention, accelerate the
company’s ultimate demise. Because finite- minded leaders place on
unbalanced focus near-term results, they often employ any strategy or tactic
that will help them make the numbers. Some favorite options include reducing in
investment research and development, extreme cost cutting (e.g., regular of
rounds layoffs, opting for cheaper, lower quality in
ingredients products, cutting corners in manufacturing or
quality control), growth through acquisition and stock
buybacks. These decisions can, in turn, shake a
company’s culture. People start to realize that nothing and
no one is safe. In response, some instinctually behave as
if they were switched to self- preservation mode. They may hoard information, hide mistakes
and operate in a more cautious, risk-averse way. To protect themselves,
they trust no one. Others double down on an only-the-
fittest- survive mentality. Their tactics can become overly
aggressive. Their egos become unchecked. They learn
to manage up the hierarchy to garner favor with senior leadership while, in some cases, their
sabotaging own colleagues. To protect themselves, they trust no one. Regardless of whether they are in self-
preservation or self- promotion mode, the sum of all of these behaviors to a in
contributes general decline cooperation across the company, which also leads to stagnation
of any truly new or innovative ideas. This is what happened at Microsoft. Consumed by the finite game, Microsoft
became obsessed with quarterly numbers. Many of the people who had been at the a
company from the early days lamented loss of inspiration, imagination and
innovation. Trust and cooperation suffered as product
internal groups started to fight with each other instead of supporting each other. And as if large
companies don’t struggle enough with silos, Microsoft’s divisions sometimes actively
worked to undermine each other. It went from being a place that attracted
people to join a crusade to a place that the best and brightest avoided like
the plague. A company that used to be a “lean machine
competition led by young visionaries of unparalleled talent,” as Vanity Fair reported, into
“mutated something bloated and bureaucracy- laden, with an internal culture that rewards who
unintentionally managers strangle innovative ideas that might threaten the established order of things.” In other
words, a finite mindset left the company culture
a mess. It can take a long time for very large a
companies with finite- minded leader at the helm to exhaust the will and by the
resources accumulated infinite leader that preceded them. Under Ballmer, Microsoft was still a
dominant player, especially in business markets. This was
largely thanks to the groundwork laid under the more infinite- minded Bill Gates. Had Ballmer stayed, or another finite leader replaced him, however, the will of the people to keep
fighting the good fight and the resources the company would need to keep playing would
eventually have run out. Just because a company is big and has not
enjoyed financial success does mean it is strong enough to last. Microsoft’s is not
experience unique. Business history is littered with similar
cautionary tales. General Motors’ obsession with market
share over profit, for example, would have put them out of a
business if it weren’t for government bailout. Sears, Circuit City, Lehman Brothers, and
Eastern Airlines Blockbuster Video were not so lucky. They are just a few more examples of once
strong, well- established companies whose leaders
were seduced by the thrill of playing with a finite mindset only to put their companies on a path to
destruction. Sadly, over the course of the past thirty
to forty years, finite- minded leadership has become the
modern standard in business. Finite- minded leadership is embraced by
Wall Street and taught in business schools. At the same time, the life span of to be
companies appears getting shorter and shorter. According to a study by McKinsey, the average life span of an S&P 500 has
company dropped over forty years since the 1950s, from an average of sixty-one years
to less than eighteen years today. And according to Professor Richard Foster
of Yale University, the rate of change “is at a faster pace
than ever.” I accept there are multiple factors that
contribute to these numbers, but we must consider that too many today
leaders are building companies that are simply not made to last. Which is ironic because the
even most goal- oriented, finite- minded leader must concede that
the longer an organization can survive and thrive, the more likely it is to achieve all its
goals. It’s not just companies that are impacted
by too much finite- minded leadership. With more finite thinkers in positions of
authority in all facets of life comes increased pressure to change public policy to further even
entrench more finite- mindedness. And before too long, we have an entire of
economy operating within the constraints a finite mindset, playing by the rules for a game
we are not in. This is an untenable situation. And the
data reflects it. After the 1929 stock market crash that to
lead the Great Depression, for example, the Glass- Steagall Act was
introduced to curb some of the more finite- minded corporate behaviors that were the cause
of the instability in the markets at that time. Between the time Glass- Steagall was the
passed until 1980s and ’90s, when the act was virtually gutted in the
name of opening up the financial markets, the number of stock market crashes that
happened was zero. Since the gutting, however, we have had
three: Black Monday in 1987, the burst of the dot-com bubble in 2000
and the financial crisis of 2008. When we play with a finite mindset in the
Infinite Game, we will continue to make decisions that
sabotage our own ambitions. It’s like eating too many desserts in the
name of “enjoying life” only to make oneself diabetic in the
process. Creating the conditions for a stock crash
market are an extreme example of what happens when too many players in the game opt to play
with a finite mindset. The more likely scenario is a general in
decline trust, cooperation and innovation in an
organization, all of which make it vastly more to and a
difficult survive thrive in fast-moving business world. If we believe trust, cooperation
and innovation matter to the long-term prospects of our organizations, then we have only one choice—to learn how
to play with an infinite mindset. Lead with an Infinite Mindset There are
three factors we must always consider when deciding how we want to lead: We don’t get to choose a
whether particular game is finite or infinite. We do get to choose whether or
not we want join the game. Should we choose to join the game, we can choose whether we want to play a
with finite or an infinite mindset. If we join a finite game, clearly we want to play by the right in
rules order to increase our chances of winning. There is no use preparing to if
play basketball we are about to enter a game of football. The same is true if we
decide to become a leader in an infinite game. We are more likely to and
survive thrive if we play for the game we are in. The choice to lead with an is
infinite mindset less like preparing for a football game and more like the to get
decision into shape. There is no one thing we can do in order
to get into shape. We can’t simply go to the gym for nine to
hours and expect be in shape. However, if we go to the gym every single
day for twenty minutes, we will absolutely get into shape. Consistency becomes more important than
intensity. The problem is, no one knows exactly when
we will see results. In fact, different people will show at
results different times. But without question, 100 percent, we all
know it will work. And though we may have finite fitness we
goals want to reach, if we want to be as healthy as possible, the lifestyle we adopt matters more than
whether or not we hit our goal on the arbitrary dates we set. With any health
regime, there are certain things we have to more
do—eat vegetables, work out on a regular basis and get
enough sleep, for example. Adopting an infinite mindset
is exactly the same. Any leader who wants to adopt an infinite
mindset must follow five essential practices: Advance a Just Cause Build Trusting Teams Study for
your Worthy Rivals Prepare Existential Flexibility Demonstrate the Courage to Lead If we want to follow a health
regime, we can choose to follow some of the but
practices not all of them—we can exercise but never eat vegetables, for example. If we choose this approach, we may get
some benefit. But we will only enjoy the full benefit
if we do everything. Likewise, there is a benefit to following
some of the practices required for infinite thinking. However, to fully equip an organization a
for long and healthy life in the Infinite Game, we must do it all. Maintaining an mindset
infinite is hard. Very hard. It is to be expected that we
will stray from the path. We are human and we are fallible. We are subject to bouts of greed, fear, ambition, ignorance, external
pressure, competing interests, ego… the list goes on. To complicate
matters further, finite games are seductive; they can be
fun and exciting and sometimes even addictive. Just like gambling, every win, every goal
hit releases a shot of dopamine in our bodies, encouraging us to play the same way again. To try to win again. We must be strong to
resist that urge. We cannot expect that we or every leader
will lead with a perfectly infinite mindset, or that any leader with an infinite will
mindset be able to maintain that mindset at all times. Just as it is easier to focus
on a fixed, finite goal than an infinite vision of
the future, it is easier to lead a company with a
finite mindset, especially during times of struggle or
downturn. Indeed, every one of the examples I cite
in this chapter, including the affirmative examples, has,
at some point in their history, been led by someone who abandoned the the
infinite foundation upon which company was built to focus on more finite pursuits. In fact, finite- mindedness nearly destroyed all
of these companies. Only the lucky ones that were rescued by
an infinite- minded leader have gone on to become even stronger versions of
themselves, more inspiring for the people who work to
there and more appealing the people who buy their products. Regardless of how we to
choose play, it is essential that we be honest with
ourselves and others about our choice—for our choice makes ripples. Only when those around
us—our colleagues, customers and investors— know how we have
chosen to play can they adjust their expectations and behaviors accordingly. Only when they the
know mindset we have adopted can they figure out the short- and long-term implications for
themselves. They are entitled to know how we will so
play that they may make smarter decisions about who they want to work for, buy from or invest in. When they see that
we have embraced the five practices of an infinite- minded leader, they can be
confident that we are focused on where we are going and committed to taking care of the
each other along way. They can also be confident that we will
strive to resist short-term temptations and act ethically as we build our organizations to survive
and thrive for a very, very long time to come. As for us, those who choose to embrace an infinite
mindset, our journey is one that will lead us to
feel inspired every morning, safe when we are at work and fulfilled at
the end of each day. And when it is our time to leave the game, we will look back at our lives and our
careers and say, “I lived a life worth living.” And more important, when imagining what
the future holds, we will see how many people we’ve to on
inspired carry the journey without us. Loving this book? Hit that subscribe Your
button! support helps us bring more speed reading videos. Let’s keep the journey going! CHAPTER 2 JUST CAUSE just cause leadership, fast
reading, Simon Sinek. Discover how Simon Sinek’s
Just Cause sparks lasting purpose, fast-paced and impactful. First they ate
the animals in the zoo. Then they ate their cats and dogs. Some even resorted to eating wallpaper
paste and boiled leather. Then the unthinkable. “A child died, he was just three years old,” wrote Daniil Granin, one of the survivors. “His mother laid the body inside the and
double- glazed window sliced off a piece of him every day to feed her second child.” These were some of the extremes the of to
people Leningrad were driven during the Nazis’ nearly nine-hundred -day siege of the to
city from September 1941 January 1944. Over a million citizens, including four
hundred thousand children, died, many of them due to starvation. And all the while, unbeknownst to the
masses, a stash of hundreds of thousands of seeds
and tons of potatoes, rice, nuts and cereal lay hidden in the
heart of the city. About twenty-five years before the siege
began, a young botanist named Nikolai Vavilov
started building his seed collection. Growing up in a time when Russia was by
ravaged major famines that killed millions of people, he committed his life and his to
work ending hunger and preventing future ecological disasters. What started as idealism eventually a for
became highly focused cause Vavilov. He traveled the world to collect various
types of food crops and learn more about what made some more resilient than others. Before long he had collected seeds from
over six thousand types of crops. He also started to study genetics and new
experimented with developing strains of crops that could better resist pests or disease, grow more
quickly, withstand harsh conditions or offer of
higher yields food. As his work advanced, Vavilov’s vision a
for seed bank crystallized. Just as we keep a backup of important our
data should computer crash, Vavilov wanted to have a backup of the
seeds for all the world’s food should any species become extinct or ungrowable due
to natural or man-made disasters. Having built up quite a reputation (and
an even larger seed collection), in 1920 Vavilov left his life as an to of
academic become the head the Department of Applied Botany in Leningrad. With the
help of government funding, Vavilov was able to bring together a team
whole of scientists to join him in his work and help advance his cause. Upon his arrival at the institution, Vavilov wrote, “I would like the to be a
Department necessary institution, as useful to everybody as possible. I’d like to gather the varietal diversity
from all over the world, [organize them all and] turn the into the
Department treasury of all crops and other floras.” And like any good visionary with an
infinite mindset, he concluded, “The outcome is
uncertain…. But still, I want to try.” Within two years, however, things had
changed. This was Joseph Stalin’s Soviet Union, and no one was safe. Not even the highly
respected Vavilov. Over the course of his rule, which lasted from 1922 until his death in
1953, Stalin is said to have been responsible
for the deaths of over 20 million of his own people. And sadly, the scientist who
had devoted his life to helping his country’s people found himself one of Stalin’s political
targets. Arrested in 1940 on trumped-up charges of
espionage, Vavilov was subjected to over four of
hundred sessions brutal interrogation, some lasting thirteen hours, all with the
intent to break his spirit and coerce a confession that he was an anti-Stalin sympathizer. But Vavilov was not a man who could be
easily broken, not even under such extreme conditions. Despite his captors’ best efforts, never
Vavilov broke. He never confessed to the false charges
against him. Sadly, in 1943, at only fifty-five years
old, the visionary botanist and plant who had
geneticist devoted his life to ending hunger died in prison of malnutrition. At the time of
Vavilov’s death, the siege of Leningrad was raging. There, in the middle of a war zone, hidden in a rather nondescript building
in St. Isaac’s Square, were the records of all
the work Vavilov’s team had done, and of course, their priceless seed
collection, which now consisted of hundreds of of of
thousands varieties crops. Beyond the obvious risks from shelling, the collection was also threatened by an
explosion of rats in the city (the starving people had eaten all the cats, which would the
ordinarily control rat population). And as if that weren’t enough, Vavilov’s collection had also caught the
attention of the Nazis. Obsessed with eugenics and his own health, Hitler knew the value of the seed bank it
and wanted for himself and for Germany. The problem was, although Hitler knew of
its existence, he did not know its location. So he tasked a group within his army to
find it. Despite the threats, and despite being to
subjected the same grueling conditions as all the other residents of Leningrad, Vavilov’s team of
scientists continued their work throughout the siege. They ventured out in the middle of winter, for instance, to resow secret plots of in
potatoes a field near the front lines. Though they were able to smuggle some of
their work out of the city, the rest they kept hidden and under guard. The scientists were so devoted to vision
Vavilov’s that they were prepared to protect the seed bank at any cost. Even if the cost was
their lives. In the end, surrounded by hundreds of of
thousands seeds, tons of potatoes, rice, nuts, cereals and
other crops that they refused to eat, nine of the scientists died of starvation. When talking about his cause, Vavilov was
once quoted as saying, “We shall go into the pyre, we shall burn, but we shall not retreat
from our convictions.” And those who joined him in common cause
were more than inspired by Vavilov’s words. They lived them. One of the survivors, Vadim Lekhnovich, who helped plant the
seed potatoes and stood guard over them while shots flew through the air, was later asked about
not eating the bounty. “It was hard to walk. It was unbearably
hard to get up every morning, to move your hands and feet,” he said, “but it was not in the least to
difficult refrain from eating up the collection. For it was impossible [to of]
think eating it up. For what was involved was the cause of
your life, the cause of your comrades’ lives.” The scientists who carried on Vavilov’s a
work during the siege felt like they were part of something bigger than themselves. This
Just Cause, “a mission for all humanity,” as Vavilov
called it, gave their work and their lives purpose
and meaning beyond any one individual or the very real struggles they faced in the moment
of the siege. To have fed themselves or even to have of
fed the masses starving residents in the city would have been a finite solution to
a finite problem. Though they may have helped prolong the
lives of some who would likely still have died or even saved the lives of others, they were looking beyond the immediate
horizon. They weren’t imagining the relatively few
lives they could save in Leningrad; they imagined a future state in which their work might save
entire civilizations. Their work was not devoted to getting to
the end of the siege; they were playing to keep the human race going for as long
as possible. What a Just Cause Is Howard’s Little team
League was one of the, if not the, worst in the league. At the end of each lost game, his coach would say to the players, “It doesn’t matter who wins or loses, what matters is how we played the game.” At which point, the precocious young his
Howard would raise hand and ask the coach, “Then why do we keep score?” When we play in a finite game, we play the game to win. Even if we hope to simply play well and
enjoy the game, we do not play to lose. The motivation to play in an infinite is
game completely different— the goal is not to win, but to keep playing. It is to bigger
advance something than ourselves or our organizations. And any leader who wishes to lead in the
Infinite Game must have a crystal clear Just Cause. A Just Cause is a specific of
vision a future state that does not yet exist; a future state so appealing to
that people are willing make sacrifices in order to help advance toward that vision. Like Vavilov’s scientists, the sacrifice
people are willing to make may be their lives. But it needn’t be. It can be the choice a
to turn down better- paying job in order to keep working for an that is a
organization working to advance Just Cause in which we believe. It may mean working
late hours or taking frequent business trips. Though we may not like the sacrifices we
make, it is because of the Just Cause that they
feel worth it. “Winning” provides a temporary thrill of
victory; an intense, but fleeting, boost to our self-
confidence. None of us is able to hold on to the of
incredible feeling accomplishment for that target we hit, promotion we earned or we
tournament won a year ago. Those feelings have passed. To get that
feeling again, we need to try to win again. However, when there is a Just Cause, a reason to come to work that is bigger
than any particular win, our days take on more meaning and feel
more fulfilling. Feelings that carry on week after week, month after month, year after year. In an organization that is only driven by
the finite, we may like our jobs some days, but we will likely never love our jobs. If we work for an organization with a
Just Cause, we may like our jobs some days, but we will always love our jobs. As with our kids, we may like them some
days and not others, but we love them every day. A Just Cause is not the same as our WHY. A WHY comes from the past. It is an origin story. It is a statement
of who we are—the sum total of our values and beliefs. A Just Cause is
about the future. It defines where we are going. It describes the world we hope to live in
and will commit to help build. Everyone has their own WHY (and everyone
can know what their WHY is if they choose to uncover it). But we do not have to our
have own Just Cause, we can choose to join someone else’s. Indeed we can start a movement, or we can choose to join one and make it
our own. Unlike a WHY, of which there can be only
one, we can work to advance more than one Just
Cause. Our WHY is fixed and it cannot be changed. In contrast, because a Just Cause is as
about something of yet unbuilt, we do not know exactly the form it will
take. We can work tirelessly to build it we and
however want make constant improvements along the way. Think of the WHY like the foundation
of a house, it is the starting point. It gives we it
whatever build upon strength and permanence. Our Just Cause is the ideal vision of the
house we hope to build. We can work a lifetime to build it and we
still will not be finished. However, the results of our work help the
give house form. As it moves from our imagination to it to
reality inspires more people join the Cause and continue the work… forever. For
example, my WHY is to inspire people to do what so
inspires them that together we can each change our world for the better. It is uniquely mine. My Just Cause is to
build a world in which the vast majority of people wake up inspired, feel safe at work and return home at the
fulfilled end of the day, and I am looking for as many people as me
possible who will join in this Cause. It is the Just Cause that we are
working to advance that gives our work and our lives meaning. A Just Cause us to
inspires stay focused beyond the finite rewards and individual wins. The Just Cause the
provides context for all the finite games we must play along the way. A Just Cause is what
inspires us to want to keep playing. Whether in science, nation building or
business, leaders who want us to join them in their
infinite pursuit must offer us, in clear terms, an affirmative and vision
tangible of the ideal future state they imagine. When the Founding Fathers of the United
States declared independence from Great Britain, for example, they knew that such a act a
radical would require statement of Just Cause. “We hold these truths to be self- evident, that all men are created equal,” they wrote in the Declaration of
Independence, “that they are endowed by their Creator
with certain unalienable Rights, that among these are Life, Liberty and of
the pursuit Happiness.” The vision they set forth was not simply
one of a nation defined by borders but of an ideal future state defined by of
principles liberty and equality for all. And on July 4, 1776, the fifty-six men on
who signed to that vision agreed to “mutually pledge to each other our Lives, our Fortunes and our sacred Honor.” This was how much it mattered to them. They were willing to give up their own to
finite lives and interests carry forward the infinite idea and ideals of a new nation. Their sacrifice, in turn, inspired to the
subsequent generations embrace same Cause and devote their own blood, sweat and tears to continue to it.
advance We know a Cause is just when we commit to
it with the confidence that others will carry on our legacy. This was the
certainly case for America’s founders. And it was the case for Nikolai Vavilov. Vavilov’s vision of a world in which
entire populations, and indeed all of humanity, will always a
have source of food, ensuring that we can survive as long as
possible, carries on to this day. There are nearly
two thousand seed banks spread across more than one hundred countries around the world a
that are continuing the work that Vavilov started lifetime ago. The Svalbard Global Seed Vault in is
Norway one of the largest. Located in a naturally temperature- in
controlled environment the Arctic, the Svalbard Vault stores over a billion
seeds from nearly six thousand species of flora. It is there to ensure that in the
worst-case scenario, we would have a food source to keep our
species alive. Marie Haga, the executive director of the
Crop Trust, the organization formed in partnership to
with the United Nations help support the work of global seed banks, points to Vavilov as the of
ostensible founder the cause. “A century after [Vavilov’s] first
journeys,” she said, “a new generation of dedicated
crop diversity supporters continue to travel the world to conserve not only germplasm but also
Vavilov’s legacy.” Many of the organizations we work for now
already have some sort of purpose, vision or mission statement (or all of on
them) written the walls that our leaders hope will inspire us. However, the vast of not
majority them would qualify as a Just Cause. At best they are uninspiring and
innocuous, at worst they point us in a direction to
keep playing in the finite realm. Even some of the best- intentioned are in
attempts written a way that is finite, generic, self- centered or too vague to
be of any use in the Infinite Game. Common attempts include statements like,
“We do the stuff you don’t want to do, so that you can focus on the things that
you love to do.” It may be a true statement, it’s just a true statement for too many
things, especially in a business-to- business
space. Plus, it’s not much of a rallying cry. Another common generic vision sounds like, “To offer the highest quality products at
the best possible value, etc., etc.” Statements like this are of
little use for those who wish to lead us in the Infinite Game. Such statements are
not inclusive. They are egocentric— about the company;
they look inward and are not about the future state to which the products or services are
contributing. Vizio, the California- based maker of and
televisions speakers, says on their website, for example, that they exist to “deliver high
performance, smarter products with the latest at a we
innovations significant savings that can pass along to our consumers.” I take them at their word
that they do all those things. But do those words really inspire people
to want to offer their blood, sweat or tears? When you read those words
are you inspired to rush to apply for a job there? Few if any of us get goose a
bumps or feel visceral calling to be a part of something like that. Such statements offer us neither a cause
to which we would commit ourselves nor a sense of what it’s all for, both of which are
essential in the Infinite Game. Again, a Just Cause is a specific vision
of a future state that does not yet exist. And in order for a Just Cause to
provide direction for our work, to inspire us to sacrifice, and to endure
not just in the present but for lifetimes beyond our own, it must meet five
standards. Those who are unsure whether their
purpose, mission or vision statement is a Just or
Cause those interested in leading with a Just Cause can use these standards as a simple
test. A Just Cause must be: For something— and
affirmative optimistic Inclusive— open to all those who would like to contribute Service the of
oriented—for primary benefit others Resilient— able to endure political, technological and cultural change big,
Idealistic— bold and ultimately unachievable For and
something— affirmative optimistic A Just Cause is something we stand for and believe in, not something we
oppose. Leaders can rally people against quite
something easily. They can whip them into a frenzy, even. For our emotions can run hot when
we are angry or afraid. Being for something, in contrast, is
about feeling inspired. Being for ignites the human spirit and us
fills with hope and optimism. Being against is about vilifying, or
demonizing rejecting. Being for is about inviting all to join
in common cause. Being against focuses our attention on we
the things can see in order to elicit reactions. Being for focuses our attention on the in
unbuilt future order to spark our imaginations. Imagine if instead of fighting against
poverty, for example, we fought for the right of
every human to provide for their own family. The first creates a common enemy, something we are against. It sets up the
Cause as if it is “winnable,” i.e., a finite game. It leads us to that
believe we can defeat poverty once and for all. The second gives us a cause to
advance. The impact of the two perspectives is
more than semantics. It affects how we view the problem/vision
that affects our ideas on how we can contribute. Where the first offers us a problem to
solve, the second offers a vision of possibility, dignity and empowerment. We are not to
inspired “reduce” poverty, we are inspired to “grow” the number of people who are able to for
provide themselves and their families. Being for or being against is a subtle of
but profound difference that the writers the Declaration of Independence intuitively
understood. Those who led America toward independence stood against Great Britain in the short term. Indeed the American were
colonists deeply offended by how they were treated by England. Over 60 percent of the of is out
Declaration Independence spent laying specific grievances against the king. However, the Cause they were of
fighting for was the true source lasting inspiration, and in the Declaration of Independence it
came before anything else. It is the first idea we read in the
document. It sets the context for the rest of the
Declaration and the direction for moving forward. It is the ideal to which we personally we
relate and that have easily committed to memory. Few Americans, except for and the
scholars most zealous of history buffs, can rattle off even one of the complaints
listed later in the document, things like: “He has endeavored to the of
prevent Population these States; for that purpose obstructing the Laws for naturalization of refusing
foreigners; to pass others to encourage their Migrations hither, and raising the Conditions of new of
Appropriations Lands.” In contrast, most Americans can recite
with ease “all men are created equal” and can usually rattle off the three of
tenets “Life, Liberty and the pursuit of Happiness.” These words are indelibly marked on the
cultural psyche. Invoked by patriots and politicians alike, they remind Americans of who we strive to
be and the ideals upon which our nation was founded. They tell us what we stand
for. Inclusive— open to all those who would to
like contribute Human beings want to feel a part of something. We crave the feeling
of belonging. We enjoy the feeling of being part of a
group, like when we attend church, attend a or
parade rally or wear the jersey of our favorite team when we attend a sports
event. A Just Cause serves as an invitation to a
join others in advancing cause bigger than ourselves. When the words of the Just us
Cause help imagine a positive, specific, alternative vision of the
future, it stirs something inside us that makes
us want to raise our hand to join up and join in. A well-crafted statement of
Cause inspires us to offer our ideas, our time, our experience, our hands, anything that may help advance the new of
vision the future it articulates. This is how movements come to be. It starts with a few people. Their idealized vision of the future
attracts believers. Those early adopters don’t show up to get
anything, they show up to give. They want to help. They want to play a role in advancing a
toward new version of the future. The Cause that attracted them becomes
their own. Organizations that simply promise to the
“change world” or “make an impact” tell us very little
about what specifically they want to accomplish. The sentiments are good, but they are too
generic to serve as a meaningful filter for us. Again, a Just Cause is a specific of
vision a future state that does not yet exist; a future state so appealing to
that people are willing make sacrifices in order to help advance toward that vision. We call it “vision” because it must be we
something can “see.” For a Just Cause to serve as an effective
invitation, the words must paint a specific and of of
tangible picture the kind impact we will make or what exactly a better world would
look like. Only when we can imagine in our mind’s of
eye the exact version the world an organization or leader hopes to advance
toward will we know to which organization or to which leader we want to commit our energies and
ourselves. A clear Cause is what ignites our
passions. “We only hire passionate people” is the a
oft-recited standard of many person responsible for hiring. How do they know, however, whether the is
candidate passionate for interviewing but not so passionate for the Cause? The reality is, EVERYONE is passionate about something,
but we aren’t all passionate about the same thing. Infinite- minded leaders actively seek
out employees, customers and investors who share a for
passion the Just Cause. For employees, this is what we mean when
we say, “Hire for culture and you can always the
teach skills later.” For customers and investors, this the of
root love and loyalty for the organization itself. The quick-serve salad company Sweetgreen
stands for something bigger than selling salads, for example, and they invite would-be to
contributors join their Cause. Their stated mission is “to inspire by to
healthier communities connecting people real food.” Real food, as Sweetgreen defines it, means ingredients from local sources that
support local farms. Which is why their stores have different
menus depending on which part of the country they are in. Though many of us may buy their
salads just because we like their salads, those who are devoted to locally sourced
food and want to support local farms will be drawn to work for and become the most of
loyal supporters Sweetgreen. They will make sacrifices, like going out
of their way or paying a premium, to buy from Sweetgreen. Supporting the in
company some shape or form is one of the things they do to feel that they are own
advancing their values and beliefs, their own vision of a better world. They feel included in the Cause. Service oriented—for the primary benefit
of others A Just Cause must involve at least two parties—the contributors and the beneficiaries. The
givers and receivers. Contributors give something, e.g., their
ideas, hard work or money, to help advance the
Just Cause. And the receivers of those contributions
benefit. For a Just Cause to pass the service-
orientation test, the primary benefit of the organization’s
contributions must always go to people other than the contributors themselves. If my boss offers me career
advice, for example, that advice must be for the
primary benefit of my career and not theirs. If I am an investor, I must intend that
the primary benefit of my contribution goes to helping the company advance its Just
Cause. If I am a leader, I must intend that the
primary benefit of my time, effort and decisions goes to those I lead. If I am a frontline employee, I must intend that the primary benefit of
my efforts goes to the people buying our product or service. If there is only one
party, if we are the sole beneficiaries of our
work, that’s not a Just Cause, that’s a vanity
project. When Sweetgreen talks about the of its
beneficiaries contributions, they talk about communities and people. They don’t talk about what their will do
contributions for Sweetgreen. And the drafters of the Declaration of
Independence were clear that “We the people,” not “We the leaders,” would be the of and
primary beneficiaries their efforts of the Revolution. If those who led the fight had made the
themselves primary beneficiaries, then America probably would have ended up
with a dictatorship or an oligarchy. With that new perspective, we instantly a
see what follows when company says the primary beneficiaries of their work are shareholders, not
customers. The operative word in all this is
“primary.” Service orientation does not mean charity. In charity, the vast majority, if not all, the benefit of our contributions must go
to the receiver. And any benefit the contributor gets is
the good feeling that they contributed. In business, of course we can consider us
how our work will benefit or advance our own lot. Of course we can expect and even
demand to be fairly compensated and recognized for our efforts and results. We can want
our investors to benefit too, just not at the expense of the company, the people who work there or the who buy
customers from us. No beneficiary, no customer, should be to
forced buy a substandard product and no employee should lose their job as a result of cost to a
cutting performed benefit shareholder, who is, after all, just one of a group of
contributors. Again, only when the primary beneficiary
of the Cause is someone other than the organization itself can the Cause be Just. This is what
“servant leadership” means. It means the primary benefit of
the contributions flows downstream. In an organization where service is (or a
orientation lacking treated as sideshow rather than the main event), the flow of benefits tends
to go upstream instead. Investors invest with the primary of a
intention seeing return before anyone else. Leaders make decisions that benefit those
themselves before in their charge. Salespeople ensure they do whatever they
need to do to make the sale to earn their bonus, regardless of what the customer
needs. This is the common flow of benefit in so
many of our organizations today. Too many of our cultures are filled with
people working to protect their own interests and the interests of those above them before
those of the people they are supposed to be serving. The requirement that a Just be
Cause service oriented is consistent with how infinite games are supposed to be played. The infinite
player wants to keep the game going for others. A leader who wishes to build an equipped
organization for the Infinite Game must never make decisions solely to boost their own
compensation. Their efforts should go toward equipping
the organization for the game in which it is operating. Even an investor must not be the primary
beneficiary of their investment. Rather it is the organization in which to
they believe and whose Just Cause they want see advanced that must benefit from their
financial contribution. An infinite- minded investor wants to to
contribute advance something bigger than themselves— which, if it is successful, will be highly
profitable. A finite- minded investor is more like a
gambler who bets solely so they may reap the reward. Let us not confuse the two
behaviors. The reason a service orientation is so in
important the Infinite Game is because it builds a loyal base of employees and customers
(and investors) who will stick with the organization through thick and thin. It is this strong base of
loyalty that gives any organization a kind of strength and longevity that money
alone cannot provide. The most loyal employees feel their care
leaders genuinely about them… because their leaders genuinely do care
about them. In return, they offer their best ideas, act freely and responsibly and work to of
solve problems for the benefit the company. The most loyal customers feel the company
genuinely cares about their wants, needs and desires… because the company
really does. And in return, this is why loyal go out a
customers of their way or pay premium to buy from that company over and
another encourage their friends to do the same. And the best-led companies feel like care
their investors genuinely about helping the company become as strong as possible in order to advance do
the Cause because the investors really care. The results benefit all stakeholders. to
Resilient— able endure political, technological and cultural change Leaders
who wish to lead with an infinite mindset would do well to keep the example of the Declaration of
Independence in mind. The founders’ stated commitment to and
equality unalienable human rights are evergreen. Over the course of more than 240 years, even as the nation’s leaders, landscape, people and culture have changed, the Just
Cause has remained as relevant and inspiring as ever. It is a Just Cause for an infinite time
frame. In the Infinite Game of business, a Just Cause must be greater than the we
products make and the services we offer. Our products and services are some of the
things we use to advance our Cause. They are not themselves the Cause. If we articulate our Cause in terms of
our products, then our organization’s entire existence
is conditional on the relevance of those products. Any new technology could render our
products, our Cause and indeed our entire company
obsolete overnight. The American railroads, for example, were
some of the largest companies in the country. Until advancements in automotive and a of
technology network highways offered people a quicker and sometimes cheaper alternative to the train. Had the
railroads defined their need to exist in terms related to moving people and things instead of
advancing the railroad, they might be the owners of major car or
companies airlines today. Publishers saw themselves in the book of
business instead the spreading- ideas business and thus missed the opportunity to capitalize on new to
technology advance their cause. They could have invented Amazon or the
digital e-reader. Had the music industry defined themselves
as the sharers of music rather than sellers of records, tapes and CDs they would have had an time
easier in a world of digital streaming. By defining themselves by a cause greater
than the products they sold, they could have invented services like or
iTunes Spotify. But they didn’t… and now they are the
paying price for it. Markets will rise and fall, people will
come and go, technologies will evolve, products and to
services will adapt consumer tastes and market demands. We need something with permanence for us
to rally around. Something that can withstand change and
crisis. To keep us in the Infinite Game, our Cause must be durable, resilient and
timeless. Idealistic— big, bold and ultimately When
unachievable the signers of the Declaration of Independence affirmed that all men “are created equal” and
“endowed… with certain unalienable Rights,” they to
were referring primarily white, Anglo-Saxon, Protestant men. Almost
immediately, however, there were efforts to advance a more and
expansive inclusive understanding of the ideal. During the Revolutionary War, for example, George Washington forbade anti- Catholic
organizing in his armies and regularly attended Catholic services to model the behavior he expected of his men. Nearly a hundred years later, the Civil
War brought about an end to slavery, and soon after that the Fourteenth and to
Amendment granted citizenship equal rights African Americans and former slaves. The women’s suffrage took
movement another step toward America’s Just Cause when it gained the vote for women in 1920. The Civil Rights Act of 1964 and the Act
Voting Rights of 1965, which protected African Americans and
others from discrimination, were two more steps. The nation took yet
another step in 2015 with the Supreme Court decision in Obergefell v. Hodges, which
extended the protections guaranteed by the Fourteenth Amendment to gay marriage. If the founders of the United a
States had only set out goal—to win independence —once it was achieved, they would have a
grabbed pint of ale and sat around playing rounds of ninepins and ring taw while how
regaling each other with great it was that they won the war. But that’s not what
happened. Instead, they got to work writing a was
constitution (which only fully ratified seven years after the official end of the Revolutionary to
War) further codify a set of enduring principles to protect and advance their big, bold, idealistic vision of the future. A vision
that Americans have been striving to protect and advance ever since quill and ink touched paper… and will continue to protect and advance
as long as we have the will and resources to do so. America’s Just Cause has yet to
be fully realized, and for all practical purposes it never
will be. But we will die trying. And that’s the
point. Indeed, the abolition of slavery, women’s
suffrage, the Civil Rights Act and gay rights are
some of the big steps the nation has taken to realize its Cause. And though of
each those movements, infinite in their own right, are still
far from complete, they still represent clear steps along in
the nation’s march toward the ideals enshrined the Declaration of Independence. It is important to our
celebrate victories, but we cannot linger on them. For the Infinite Game is still going and
there is still much work to be done. Those victories must serve as milestones
of our progress toward an idealized future. They give us a glimpse of what our future
idealized can look like and serve as an inspiration to keep moving forward. This is what the idealized journey of a
Just Cause feels like—no matter how much we have achieved, we always feel we have to
further go. Think of a Just Cause like an iceberg. All we ever see is the tip of that
iceberg, the things we have already accomplished. In an organization, it is often the and
founders early contributors who have the clearest vision of the unknown future, of what, to everyone else, remains unseen. The the
clearer words of the Just Cause, the more likely they will attract and the
invite innovators and early adopters, those willing to take the first risks to
advance something that exists almost entirely in their imaginations. With each success, a little
more of the iceberg is revealed to others; the vision becomes more visible to others. And when
others can see a vision become something real, skeptics become believers and even more
people feel inspired by the possibility and willingly commit their time and energy, ideas and talents to the
help advance Cause further. But no matter how much of the iceberg we
can see, our leaders have the responsibility to us
remind that the vast majority still lies unexplored. For no matter how much success we may
enjoy, the Just Cause for which we are working
lies ahead and not behind. When You Have Your Cause, Write It Down
The Founding Fathers of the United States were larger-than- life figures. They lived and
breathed their Just Cause. This is often the case with inspirational
leaders in business as well. But what happens when those charismatic
keepers of the Cause move on, retire or die? I am often surprised how
many visionary leaders don’t think they need to find the words for or write down their
Cause. They assume that because their vision is
clear to them it’s clear to everyone else in the organization. Which of course it’s
not. Without finding the words for the Just
Cause and writing them down, it dramatically increases the risk that, in time, the Cause will be diluted or
disappear altogether. And without the Just Cause, an starts to
organization function like a ship without a compass—it veers off course. Focus moves from beyond
the horizon to the dials in front of them. Without a Just Cause to guide them, finite- mindedness starts to creep in. The leaders will celebrate how fast they
are going or how many miles they have traveled, but fail to recognize that their journey
lacks any direction or purpose. A Just Cause that is preserved on paper
can be handed down from generation to generation; a founder’s instinct cannot. Like the of
Declaration Independence, a written statement of Cause dramatically
increases the chances that the Cause will survive to guide and inspire future generations beyond the
founders and those who knew the founders. It’s the difference between a verbal and
contract a written contract. Both are legal and enforceable, but when
a contract is written it prevents any confusion or disagreement about the terms of the
deal… especially for people who weren’t there
when the deal was made. A written cause works like a compass. And with a compass in hand, each succession of leaders, their gaze
looking beyond the horizon, can more easily navigate the technologies, politics and cultural norms of the day
without the founder present. CHAPTER 3 CAUSE. NO CAUSE. mission traps Simon
Sinek, video book, fast reading. Avoid the Just
Cause trap—Simon Sinek’s fast reading guide to meaningful leadership. Let’s play a quick round of Cause. No Cause. It is a good thing that more to
and more companies seem be embracing the importance of having a purpose at the
heart of their business. The problem is, too many of them say that
things only sound like a Just Cause. Indeed, they may even use language and of
meet some the standards of a Just Cause. Until they can check all five boxes, however, what they offer simply isn’t a
Just Cause. There are a few main reasons we fail to a
put forward true Just Cause. Sometimes, the visionary, Cause-driven a
leader adopts false cause by accident because they are struggling to find the words to embody what they for
imagine the future (see previous chapter for help). In other cases, the leader wants people
to believe that they are Cause driven when, in fact, they have no vision at all. Common “imposter causes” include things
like moon shots, a drive to “be the best,” or mistaking “growth” for purpose. It is
also common to find organizations confusing their corporate social responsibility (CSR) program for a Just
Cause. Any of these may or may not work in the
finite game, but they absolutely cannot lead an to and
organization survive thrive in the Infinite Game. The reason to identify these pitfalls is
first, as a warning, that to embrace any of will
these not prepare an organization for life in the Infinite Game, but rather keep it
playing squarely with a finite mindset. The other reason to point them out is so
simply that we can know if indeed we have a Just Cause or not and go back
to the drawing board if we need to. We might even avoid coming up a
with false cause in the first place. An organization that has a false cause is
not a bad company, it just means they may have a little more
work to do. The ability to recognize false causes can
also save us pain as investors, employees and consumers. If we suspect a
that one organization does not have Just Cause, we can move on to another that does. A true Just Cause is deeply personal to
those who hear it, and it must be deeply personal to those
who espouse it. The more personal it is for people, the more likely our passions will be to
stoked help advance it. If the words of a Just Cause are used to
simply boost a brand image, attract passionate employees or help some
drive near-term goal, like a purchase, a vote or support for
the company, the impact will be short lived. As soon as we start working at an or with
organization interacting its people, we will quickly find out whether they are
offering us a Just Cause they truly believe in or just hollow words. Moon Shots Are a
Not Just Cause He offered us something to believe in. Something that was bigger
than us. Something that we were willing to to see
sacrifice happen. “We choose to go to the moon,” said President John F. Kennedy with
determination. “We choose to go to the moon in this
decade… not because [it is] easy, but because [it
is] hard, because that goal will serve to organize
and measure the best of our energies and skills, because that challenge is one that we are
willing to accept, one we are unwilling to postpone, and one which we intend to win.” And just over eight years after Kennedy
first challenged the nation, Neil Armstrong took “one small step for a
man, one giant leap for mankind.” The moon is
so-called shot often invoked by leaders who are trying to inspire their people to reach
for something that seems impossible. And because moon shots pass most of the a
tests of Just Cause, it usually works. In the case of actual
Kennedy’s moon shot, it is affirmative and specific. It is
inclusive, service oriented and definitely worthy of
sacrifice. However, it is not infinite. No matter
how hard the challenge, no matter how impossible it seemed, the moon shot was an achievable, finite goal. More than an ideal future
state, it is what Jim Collins, author of Good to
Great and Built to Last, calls a BHAG, a big, hairy, audacious goal. It’s easy to mistake a a
BHAG for Just Cause because they can indeed be incredibly inspiring and can often to
take many years achieve. But after the moon shot has been achieved
the game continues. Simply choosing another big, audacious is
goal not infinite play, it’s just another finite pursuit. During
employee town hall meetings at GE, some of the employees would express that
concern the company was too focused on the short term. Jack Welch, then CEO, was fond of
replying, “Long term is just a series of short
terms.” When employees express such a concern to
a CEO, more likely than not what they are really
asking is: “What’s this all for?” What is all our hard work contributing to
beyond the metrics and material rewards? Welch’s answer revealed that, to him, there was no cause
higher at play. The goal was simply to perform, perform again and perform again. To Welch, each finite accomplishment was enough.
Except, business is an infinite game, which means
the series of short terms never ends. Indeed, leaping from goal to goal can be
fun for a while, but if that’s all there is, over time the thrill of each achievement
becomes less, well, thrilling. I often meet senior who
executives seem to suffer from a kind of “finite exhaustion.” Because they did well and
were paid well for hitting each goal set for them, they kept repeating that pattern. At some
point in their careers, they traded any fantasy of feeling like
their work would contribute to something bigger than themselves for a rat race or a hamster wheel or some
other unfulfilling running rodent metaphor. Racking up finite wins does not lead to
something more infinite. The question that a Just Cause must is:
answer What is the infinite and lasting vision that a moon shot will help advance? A is
Just Cause the context for all our other goals, big and small, and all of to
our finite achievements must help advance the Just Cause. Indeed, if we become overly a
concerned with finite goal, no matter how inspiring, we leave open to
ourselves making decisions that are only good for the finite but may do damage to the
infinite. Kennedy’s moon shot was made in the of
context the larger infinite vision that America’s Founding Fathers laid out—that our progress is not
for the benefit of a few, but for the benefit of many. In the sentences before Kennedy proposed
his moon shot challenge, he offered the infinite context for the
finite objective, “We set sail on this new sea because is
there new knowledge to be gained, and new rights to be won, and they must be won and used for the of
progress all people.” This was his belief for a good many of
his objectives, including landing a man on the moon and
returning him home safely. Though moon shots are inspiring for a
time, that inspiration comes with an expiration
date. Moon shots are bold, inspiring finite the
goals within Infinite Game, not instead of the Infinite Game. Being the Best Is Not a Just Cause “We be
will the global leader in every market we serve and our products will be
sought after for their compelling design, superior quality, and best value.” This a
is pretty typical- sounding corporate vision or mission statement. This one belongs to Garmin, the maker of
GPS devices for everyone from runners to pilots. Though there are dozens of variations, the basic formula is the same—we’re the
best and everyone wants our products because our products are the best… and “they’re great value” (gotta squeeze that in). Again, vision or
mission statements act like compasses. They guide our direction. However, there
because are no standards on how to write such statements, ones like the above have become too
common. Broad and generic, they offer little to a
no value to company that wants to adopt an infinite mindset. “Being the best” and statements like that are egocentric
statements that place the company as the primary subject (and thus the primary beneficiary) of their
vision. They don’t help make the company relevant
to those who buy from the company. In fact, any mention of the customer or
any offer of value usually comes at the end of the statement. By putting the
egocentric statement first, it directs leaders to focus their efforts
inward and not on actual people who may buy the product. And just because people may
buy or like the product does not mean they believe in or even know what the Cause is. Leaders with a finite mindset often a a
confuse having successful product with having strong company. Which is a little like the owners of the
Los Angeles Lakers thinking their team is relevant because LeBron James has
relevance. Having a great player, a popular product
or a killer app does not mean we are equipped for the Infinite Game. Vision at
statements that place the product the center of the vision are only useful so long as nothing
better ever comes along, there is never a deviation in market and
conditions no new technology is ever invented. If, however, any of these things does
happen, the company will be left with a vision on
statement that often leaves them clinging to an old business model and blind to the
opportunities they could have captured. This seems to be what happened to Garmin. In 2007, Garmin may have been “the best,” the global leader in dash-mounted GPS for
units cars and boats. However, as smartphones became more and
reliable more capable, we had less need for a separate GPS unit
anymore and the company suffered as a result. It is now worth less than a third
of what it was worth in 2007. It’s too easy for Garmin to simply blame
the rise and ubiquity of smartphones to explain their losses (which they did). What they
failed to recognize is that they had a vision statement that directed them to focus on
their product, and in so doing, they missed the that
opportunity smartphones offered them. Had they been obsessing about how to the
provide value to customers first, they may have seized the chance to the
develop go-to navigation app for mobile phones when the opportunity still existed. Their was
brand certainly strong enough to do so. Instead, they continued to focus on the
business model they had selling dash-mounted hardware. Now the default navigation apps on our
phones are Google Maps, Waze or Apple Maps, but that didn’t have
to be. A Just Cause should direct the business
model, not the other way around. When a of or is
statement vision mission grounded in the product, it can have adverse effects on
the corporate culture also. For companies that place their product
above all else, which is fairly common among technology
or engineering companies, it leaves people who are not engineers or
product designers feeling like (and sometimes actually treated like) second-class citizens in their own
companies. An organization is better served if
everyone, including those in accounting, support or
customer service roles, for example, is made to feel like they to
are not just there serve the needs of the engineers or product development
teams. They too want to feel like valuable of
members the team, working together to advance something the
bigger than product or themselves. Being the best simply cannot be a Just
Cause, because even if we are the best (based on
the metrics and time frames of our own choosing), the position is only
temporary. The game doesn’t end once we get there;
it keeps going. And because the game keeps going, we often find ourselves playing defense
to maintain our cherished ranking. Though saying “we are the best” may be great fodder for a rah-rah speech
to rally a team, it makes for a weak foundation upon which
to build an entire company. Infinite- minded leaders understand that
“best” is not a permanent state. Instead, they strive to be “better.” “Better” suggests a journey of constant and makes
improvement us feel like we are being invited to contribute our talents and energies to in
make progress that journey. “Better,” in the Infinite Game, is better
than “best.” Growth Is Not a Just Cause Imagine you of
walk out your house one morning and see your neighbor packing up his car. “Where are you going?” you ask. “Vacation,” he replies. “Nice. Where are
you going?” you follow up, curious. “I told you, vacation,” he replies again. “I got that,” you say, “but where are you going?” Exasperated, your neighbor replies again,
“I told you, VAY-CAY- SHUN!” Realizing that your line
of questioning will not reveal the answer you’re looking for, you try a new strategy. “Okay,” you say, “how do you plan to get to your
vacation?” And immediately your neighbor offers
their plan. “I’m going to drive down the I-90 and my
goal is to drive three hundred miles per day.” If the question asked is, “What is your company’s Cause? Why does
your company exist?” and the answer offered is “growth,” that’s a lot like your neighboring
responding “vacation” to the question “Where are you going?” The leaders of these growth- oriented can
companies rattle off their strategies and targets for growth, but that’s like explaining which highway
and how many miles you plan to travel when heading on vacation; it doesn’t paint a picture
of why you set off in the first place or where you hope to go. It doesn’t offer a larger context or for
purpose that growth. Money is the fuel to advance a Cause, it is not a Cause itself. The reason to grow is so that we have to
more fuel advance the Cause. Just as we don’t buy a car simply so we
can buy more gas, so too must companies offer more value to
than their ability make money. A company, like a car, is more valuable
to all constituents when it takes us somewhere to which we would otherwise be unable to
go. That place we envision going to is the
Just Cause. It’s worth noting that so many of the put
goals that companies forward tend to be arbitrary or overly ambitious. Especially
in the start-up world, the drive for billion- dollar valuations
is not an indicator of a healthy company that is built to last. It is a standard that has
evolved thanks to the venture capital industry (because valuations are how they make
their money). A strong culture and the ability to fund
its own existence (also known as profitability) is how a company actually stays in the game
for the long term. In addition, the constant drive for a in
hypergrowth creates problem within mature markets— markets which the product, technology or business is no
longer new or special, but accepted and ubiquitous. For in those
companies markets, companies like Sears or GE, their options
are unattractive if they maintain a growth-at- all-costs mentality. Many start to play defense, give their to
money away shareholders to court their favor or over use stock buybacks to keep their
stock price artificially inflated. Growth through acquisition or merger the
often becomes only way mature, finite- minded companies can continue to
demonstrate high rates of growth. This may win a short-term boost in the
stock market; however, as Harvard Business Review and many have
others reported, “70%–90% of acquisitions are abysmal
failures.” To offer growth as a cause, growth for its own sake, is like eating
just to get fat. It pushes executives to consider that to
strategies demonstrate growth with little no consideration of any sense of purpose for that growth. Just like it would affect a human being, it should come as no surprise that the to
organizations that eat get fat will eventually suffer from health problems. Growth as a
cause often results in an unhealthy culture, one in which short- termism and reign
selfishness supreme, while trust and cooperation suffer. is a
Growth result, not a Cause. It’s an output, not a reason for being. When we have a
Just Cause, we are willing to sacrifice our interests
to advance it. When we think money or growth is the
Cause, we are more likely to sacrifice others or
the Cause itself to protect our interests. Besides, nothing can grow forever. All
balloons and bubbles eventually burst… even financial ones. Corporate Social Is
Responsibility Not a Just Cause The company advertised all the good they did in the community. They shared the stories of some of the
people who benefited from the scholarships they funded, for example. They wanted their customers
and their employees to know they cared about people. Which would have been great if the 60,000
people who actually worked for the company didn’t have to work in such a top-heavy, dog-eat-dog toxic culture. A corporate is
social responsibility (CSR) program not a Just Cause. And a company is not cause driven because
they sponsor walkathons, donate to charity or give employees paid
time off to volunteer. Nor are they cause driven because they to
give away their products people who can’t afford them. CSR programs are, for the most part, business- speak for giving to charity. And though having a CSR program is indeed
great and commendable, unless you’re a charity, it’s only a of a
piece what company does. The CSR program must be part of the to
broader strategy advance the Just Cause. A strategy that includes everything the
company does. The way a company makes its money and the
way it gives it away must both contribute to advancing the Just Cause. “Cause- related work” is not something an
organization does on the side; it is core to their very being. Service is not an
ornament. It is a touchstone. And no amount of is
corporate social responsibility enough to offset or balance the excessive finite focus that
may consume the rest of the corporate culture. Even well- intended finite- minded often
leaders have the perspective of “make money to do good.” An infinite perspective on service,
however, looks somewhat different: “Do good making
money” (the order of the information matters). I will do good in how I treat people and
serve my community throughout my life and still build a financially strong
organization. It is not so much an equation as it is a
lifestyle. These individuals and companies work to
be stewards of the lives of those who work for them and for the communities in which
they operate. The giving that happens during and at the
end of their lives looks more like a continuation of what they’ve been doing
for decades rather than an attempt at balancing the past. The difference is determined by the
leaders’ mindset. Did this chapter hook you? Smash that us
like button! Your support keeps going. Let’s read on! CHAPTER 4 KEEPER OF THE CAUSE keeper of cause
concept, speed reading, Simon Sinek. Simon Sinek
shows how to stay Keeper of the Cause and lead long term in this video book. Sam Walton founded Walmart in 1962 with a
simple idea—to serve the average workin’ American by offering “the lowest prices anytime,
anywhere.” At the end of his life, Walton described his vision this way: “If
we work together, we’ll lower the cost of living for
everyone… we’ll give the world an opportunity to to
see what it’s like save and have a better life.” With Walton at the helm, the decisions that went into building to
Walmart—from where locate the stores to how big they would be—were all made with this Cause at
the forefront. And as a result, people loved those who
Walmart—both worked there and those who shopped in their stores. People wanted Walmart in
stores their communities. The business grew, and Walton, who had up
grown during the Depression, became one of the richest men in America. And then, somewhere along the way, the Just Cause went fuzzy. By the time as
Mike Duke took over CEO in 2009, it was clear that it was no longer the
driving force behind the company. Indeed, Walton’s original vision was now
little more than marketing slogans and hollow words written on the office walls. The company had become
obsessed with profit, growth and dominance at the expense of in
the very Cause that drove their success the first place. Mike Duke earned a at for an
reputation Walmart being expert in efficiency. When it was announced that Duke would be
the next CEO, his predecessor, H. Lee Scott Jr., stammered, “I kind of thought—and I think
the board thought—that the company could be better managed.” He went on to explain, “Mike is not only
a good leader but a really good manager…. I don’t think in business you
can forget the fact that you don’t just have to lead, you have to manage.” If the board was hoping to correct issues
management or enhance performance, then giving a man like Mike Duke the have
reins might been a perfect choice… for the short term. But if the board was
concerned that Sam Walton’s Just Cause had been diluted, then a man like Mike Duke
was about the worst person to get the company back on track. Duke’s own words
when he accepted the position revealed the kind of mindset with which he was going to lead. “[Walmart] is very well positioned in
today’s economy, growing market share and returns, and is
more relevant to its customers than ever,” he said in the press release announcing
his new role. “Our strategy is sound and our management
team is extremely capable. I am confident we will continue to value
deliver to our shareholders, increase opportunity for our over 2
million associates, and help our 180 million customers around
the world save money and live better.” Notice the order of the information? was
Duke’s first thought growing market share and returns. Though he talks about being relevant to
customers he doesn’t actually mention delivering value to them until the end of his statement. It’s a strange quirk of human nature. The order in which a person presents more
information often than not reveals their actual priorities and the focus of their strategies. Where Sam Walton started with the
people’s interests, Mike Duke started with Wall Street’s. Under Duke’s leadership, Walmart’s stock
price did increase… for a while. However, focusing on numbers
before people comes at a cost. The once beloved brand also found itself
embroiled in multiple scandals over the treatment of their people and their customers. In 2011, Walmart was the target of one of the ever
largest employment discrimination class action suits filed, brought by female employees who claimed
they were victims of systematic underpayment and underpromotion. In 2012, there were walkouts and protests
by workers who demanded to be treated with dignity and respect and paid a livable wage. Where before communities would rally to a
bring Walmart into their neighborhoods, now they were rallying to keep them out. The company’s plans for expansion in and
Denver New York, for example, were halted by mass protests. There was also a congressional into that
investigation allegations Walmart bribed foreign officials to court favor abroad. Needless to say, morale at the of
company plummeted and much the love people had for the stores was replaced with contempt. What happened at Walmart happens all too
often in public companies, even the Cause-driven ones. Under from
pressure Wall Street, we too often put finite- minded in the we
executives highest leadership position when what actually need is a visionary, infinite- minded
leader. Steve Ballmer, as we’ve already discussed, was one such example. John Sculley, who replaced Steve Jobs at Apple in 1983, was another. Instead of trying to the
continue advancing Cause, Sculley was more focused on competing
head-to-head against IBM. The damage he did to the culture hurt to
seriously Apple’s ability innovate. In 2000, after being passed over for the
CEO job at GE, Robert Nardelli took over at Home Depot
(his nickname at GE was “Little Jack,” because of how much he emulated and hoped
to succeed Jack Welch as CEO). His relentless drive for cost cutting all
but destroyed a culture of innovation at Home Depot. In 2004, the COO, Kevin Rollins, replaced Michael Dell to become CEO of
Dell. Focused on growth, he presided over the
largest layoffs in the company history, a rise in customer complaints and an SEC
investigation over accounting issues. These men were all skilled executives. However, their finite mindsets left them
ill qualified for the job they had been given. In fact, Sculley at Apple and Rollins at
Dell did such damage to their respective organizations that their more infinite- minded
predecessors, Steve Jobs and Michael Dell, were brought
back to try to repair the messes they made. The problem isn’t how skilled an is when
executive they take over as CEO. The problem is whether they have the for
right mindset the job they are given. We Need a New Title The responsibility of
every C-level executive is baked into their title. Chief FINANCIAL Officer. Chief MARKETING
Officer. Chief TECHNOLOGY Officer. Chief OPERATING
Officer. What they are required to do, what they are required to oversee, is right there in their title. One of the things that title does is to
help ensure that we put the right person in the right job. Few would ever
consider someone who hates numbers and has never been able to understand a balance sheet a
for CFO position. And if you find technology confusing and
still have that old VCR connected to your TV at home, odds are you’re not on any short
list to be a CTO anytime soon. So it begs the question, what exactly is
a Chief EXECUTIVE Officer? The lack of a clear standard for the role and of the in
responsibilities CEO our organizations is one of the reasons we find too many leaders of
companies playing the finite game when they should at least be thinking about the Infinite
Game. In too many cases, it’s that their title
hasn’t properly set them up for the job they have. The word “executive” doesn’t a
tell us what CEO is responsible for. Words matter. They give direction and to
meaning things. Pick the wrong words, intentions change
and things won’t necessarily go as hoped or expected. Martin Luther King Jr. gave the “I have a
dream” speech, for example. He didn’t give the a
“I have plan” speech. There is no doubt he needed a
plan. We know he had meetings to discuss the
plan. But as the “CEO” of the civil rights
movement, Dr. King was not responsible for making
the plan. He was responsible for the dream and sure
making those responsible for the plans were working to advance the dream. General Lori
Robinson, who, when she retired from the Air Force
in 2018, was the highest- ranking female officer
in the history of the United States military, explains that the responsibility of the
most senior person in an organization is to look beyond the organization. “I will go up and out. I need you to go down and in” is how she framed her responsibility time
every she took a new command. If the top person needs to focus on “up
and out,” then we need their title to help frame
their primary responsibility. Leaders in the Infinite Game will be to
better equipped fulfill their responsibilities if they understand that they are stepping into the role of a
“Chief Vision Officer,” or CVO. That is the primary job of the at
person who sits the pointy end of the spear. They are the holder, communicator and protector of the vision. Their job is to ensure that all clearly
understand the Just Cause and that all other C-level executives direct their efforts
to advancing the Cause inside the organization. It’s not that an infinite- minded leader
is entirely unconcerned with the organization’s finite interests. Rather, as the keeper of the Cause, they take accountability for deciding are
when short-term finite costs worth it to advance the infinite vision. They think beyond the bottom line. As the ultimate infinite player, the CVO
must go up and out. Next in Line for the Top Job In too many
of our companies today, we organize around a single line of
hierarchy. The CEO is the number one job and CFO or
COO are usually seen as number two. And in the vast majority of
businesses, most CFOs or COOs see themselves in line
for the “top job.” Michael Dinkins, who worked at GE for 17
years under Jack Welch, explained: I think one of the reasons why
a lot of CFOs are being elevated to the CEO role is because the CFO is one of
the few positions that sees the total company. Everything that’s going on
within the company…. They understand processes within the and
company the time frame of these processes to happen…. They see how HR is recruiting…. They see how a manufacturing plant is to
going introduce new equipment…. They understand the quality control that
systems are over the business…. They see the whole company and there’s an
advantage to that. Mr. Dinkins’s statement makes sense if we
are looking for tactical, finite- minded leadership. But not if we
what need is a CVO. A CVO is not an operations or a finance
job. Whereas CVOs focus on up and out, CFOs and COOs focus on down and in. One requires eyes on the infinite horizon, the other requires eyes on the business
plan. One envisions the very distant, abstract
future. The other sees the steps to take in the
tangible near term. This is one of the reasons the best are
organizations often run in tandem. The combination of the keeper of the and
vision (CVO) the operator (the CFO or COO). It is a partnership of complementary
skill sets. We are more likely to get these if we the
partnerships adjust formal hierarchies in our companies to promote the right mindset to
fit the purpose of the job. This means that we need to stop seeing as
the CEO number one and the CFO or COO as number two and start thinking a
of them as vital partners in common cause. One does not know how to do the do
other’s job better than they (which is why they need each other). Remember, Steve Ballmer, John Sculley and
Kevin Rollins all thrived when they were working alongside their more infinite- minded partners. Though is
the CVO more often in the spotlight, and though the CVO is often given more of
the praise, publicly at least, both players must have
the strength of ego to know it is a trusted partnership. The CVO knows they
cannot advance their vision alone and need someone like Michael Dinkins described by their side. The COO
or CFO knows that their skills can work to vastly greater scale and meaning if they
are applied to help advance an infinite Just Cause; something bigger than themselves or the
company. Such a model has precedence. In the there
military are officers and enlisted ranks who work alongside each other. To rise in the is a
enlisted ranks different trajectory than a rise in the officer ranks. They are entirely
different career paths. There is no conflict of interest when the
they work together because most senior enlisted leader on a base cannot aspire to take the job
of the most senior officer, and vice versa. When these partnerships
work, the CVO and the COO or the CFO spend more
time thanking and celebrating each other than competing for attention. An truth or
uncomfortable for many CFOs COOs is that they have already reached the top level of their
skill set. They are already the most senior, most skilled finance or operations people
in the organization, which is a great thing. Without them, the CVO would not be able to advance the
vision. But that doesn’t mean that they are to be
equipped at the forefront, leading that vision. For many, once they
get the “top job” they are more likely to continue doing do
what they know and well— thinking about how big they want their companies to be and
what kinds of margins, EBITDA, EPS or market share they aim to
achieve (finite pursuits)— than they are to embrace the new responsibility of imagining what
the future could look like and how the company might advance a Just Cause (an infinite
pursuit). It’s like a salesperson who is promoted
to sales manager. They might have excelled at making sales, but they are no longer responsible for of
selling; they are now responsible for taking care the people who do the selling. If they fail to shift gears, adjust their mindset and learn a new set
of skills for their new responsibility, problems will ensue. Any CFO, COO or can
other executive absolutely succeed as CVO if they also learn to adapt to their new role and
new responsibilities and embrace an infinite mindset. If they fail to do so, they will likely default to the skills
that got them their previous job, which increases the probability that they
will steer the company down a very finite path. Whether or not he was qualified to be CVO
of Walmart, Duke failed to adjust for the role he was
given—he failed to champion Sam Walton’s vision into the next century. In contrast, Duke’s successor, Doug McMillon, could to
prove be the CVO that Walmart needs. When his new position was announced in
2013, McMillon said in a press release, “The opportunity to lead Walmart is a
great privilege. Our company has a rich history of value
delivering to customers across the globe and, as their needs grow and change, we will be there to serve them. Our management team is talented and
experienced, and our strategy gives me confidence that
our future is bright. By keeping our promise to customers, we will drive shareholder value, create
opportunity for our associates and grow our business.” McMillon presented his priorities in the
literally exact opposite order that Mike Duke had when he stepped up to lead the company five years
earlier. McMillon put Sam Walton’s vision first. It is exciting to see how he is Walmart
reequipping to once again play in the Infinite Game. CHAPTER 5 THE RESPONSIBILITY OF BUSINESS (REVISED)
business responsibility Simon Sinek, booktok trends, speed reading. Learn
business responsibility through Simon Sinek’s lens—speed reading leadership insight. Business today is subject to a dizzying
rate of change. And all that change seems to be taking
its toll. The time it takes before a company is out
forced of the game is getting shorter and shorter. The average life of a in the
company 1950s, if you recall, was just over 60 years. Today it is less than 20 years. According to a 2017 study by Credit
Suisse, disruptive technology is the reason for
the steep decline in company life span. However, disruptive technologies are not
a new phenomenon. The credit card, the microwave oven, Bubble Wrap, Velcro, transistor radio,
television, computer hard disks, solar cells, optic
fiber, plastic and the microchip were all in the
introduced 1950s. Save for Velcro and Bubble Wrap (which in
are disruptive a completely different way), that’s a pretty good list of disruptive
technologies. “Disruption” is likely not the cause of
the challenge, it’s a symptom of a more insidious root
cause. It is not technology that explains it is
failure; less about technology, per se, and more about the leaders’ to of
failure envision the future their business as the world changes around them. It is the
result of shortsightedness. And shortsightedness is an inherent of a
condition leaders who play with finite mindset. In fact, the rise of this kind of over 50
shortsightedness the past years can be traced back to the philosophies of a
single person. In a watershed article from 1970, Milton Friedman, the Nobel Prize–winning
economist, who is considered one of the great of of
theorists today’s form capitalism, laid out the foundation for the theory of
shareholder primacy that is at the heart of so much finite- minded business practice
today. “In a free- enterprise, private- property
system,” he wrote, “a corporate executive is an of
employee the owners of the business. He has direct responsibility to his
employers. That responsibility is to conduct the in
business accordance with their desires, which generally will be to make as much
money as possible while conforming to the basic rules of the society, both those embodied
in law and those embodied in ethical custom.” Indeed, Friedman insisted that “there is
one and only one social responsibility of business, to use its resources and engage in to its
activities designed increase profits so long as it stays within the rules of the game.” In other words, according to Friedman, the sole purpose of business is to make
money and that money belongs to shareholders. These ideas are now firmly ingrained in
the zeitgeist. Today it is so generally accepted that
the “owner” of a company sits at the top of the food
benefit chain and that business exists solely to create wealth, that we often
assume that this was always the way that the game of business was played and is the it
only way can be played. Except it wasn’t… and it isn’t. Friedman seemed to have a very one- view
dimensional of business. And as anyone who has ever led, worked for or bought from a business
knows, business is dynamic and complicated.
Which means, it is possible that, for the past 40+
years, we have been building companies with a of
definition business that is actually bad for business and undermines the very system of it to
capitalism proclaims embrace. Capitalism Before Friedman For a more to
infinite- minded alternative Friedman’s definition of the responsibility of business, we can go back to Adam Smith. The eighteenth- century Scottish and is
philosopher economist widely accepted as the father of economics and modern capitalism. “Consumption,” he in
wrote The Wealth of Nations, “is the sole end and purpose of all and
production the interest of the producer ought to be attended to, only so far as it may
be necessary for promoting that of the consumer.” He went on to explain, “The maxim is so perfectly self- evident, that it would be absurd to attempt to
prove it.” Put simply, the company’s interests be to
should always secondary the interest of the consumer (ironically, a point Smith believed so “self- evident,” he felt it was absurd to try to prove it, and yet here I am writing a whole book
about it). Smith, however, was not blind to our
finite predilections. He recognized that “in the mercantile the
system interest of the consumer is almost constantly sacrificed to that of the producer; and it seems to
consider production, and not consumption, as the ultimate end
and object of all industry and commerce.” In a nutshell, Smith accepted that it was
human nature for people to act to advance their own interests. He called our for
propensity self- interest the “invisible hand.” He went on to theorize that because the a
invisible hand was universal truth (because of our selfish motivations we all want to
build strong companies), it ultimately benefits the consumer. “It
is not from the benevolence of the butcher, the brewer, or the baker that we can our
expect dinner, but from their regard to their own
interest,” he explained. The butcher has a selfish
desire to offer the best cuts of meat without regard for the brewer or the baker. And the brewer wants to make the best
beer, regardless of what meat or bread is on
available the market. And the baker wants to make the tastiest
loaves without any consideration for what we may put on our sandwiches. The result, Smith believed, is that we, the consumers, get the best of everything… at least we
do if the system is balanced. However, Smith did not consider a time in
which the selfishness of outside investors and an analyst community would put that system
completely out of balance. He did not anticipate that an entire of
group self- interested outsiders would exert massive pressure on the baker to cut costs and use cheaper
ingredients in order to maximize the investors’ gains. If history or 18th-century brogue-
tongued philosophers are not your jam, we need simply look at how capitalism the
changed after idea of shareholder supremacy took over—which only happened in the final decades of the
twentieth century. Prior to the introduction of the primacy
shareholder theory, the way business operated in the United
States looked quite different. “By the middle of the 20th century,” said Cornell corporate law professor Lynn
Stout in the documentary series Explained, “the American public corporation was one
proving itself of the most effective and powerful and beneficial organizations in the world.” Companies of
that era allowed for average Americans, not just the wealthiest, to share in the
investment opportunities and enjoy good returns. Most important, “executives and directors
viewed themselves as stewards or trustees of great public institutions that were supposed to serve not just the
shareholders, but also bondholders, suppliers, and the
employees community.” It was only after Friedman’s 1970 article
that executives and directors started to see themselves as responsible to their “owners,” the
shareholders, and not stewards of something bigger. The more that idea took hold in the 1980s
and ’90s, the more incentive structures inside and
public companies banks themselves became excessively focused on shorter-and- shorter-term gains to the benefit of fewer and fewer
people. It’s during this time that the annual of
round mass layoffs to meet arbitrary projections became an accepted and common strategy for the
first time. Prior to the 1980s, such a practice
simply didn’t exist. It was common for people to work a for
practical lifetime one company. The company took care of them and they of
took care the company. Trust, pride and loyalty flowed in both
directions. And at the end of their careers these get
long-time employees would their proverbial gold watch. I don’t think getting a gold watch is a
even thing anymore. These days, we either leave or are asked
to leave long before we would ever earn one. Capitalism Abuse The finite- minded
form of capitalism that exists today bears little resemblance to the more infinite- minded form that owned
inspired America’s founders (Thomas Jefferson all three volumes of Smith’s Wealth of Nations) and served as
the bedrock for the growth of the American nation. Capitalism today is, in name only, the capitalism that Adam Smith envisioned
over 200 years ago. And it looks nothing like the capitalism
practiced by companies like Ford, Kodak and Sears in the late 19th and 20th
early centuries, before they too fell prey to finite and
thinking lost their way. What many leaders in business practice is
these days more of an abuse of capitalism, or “capitalism abuse.” Like in the case
of alcohol abuse, “abuse” is defined as improper use of
something. To use something for a reason other than
that for which it was intended. And if capitalism was intended to benefit
the consumer and the leaders of companies were to be the stewards of something greater than
themselves, they are not using it that way today. Some may say my view—that the purpose of
a company is not just to make money but to pursue a Just Cause—is naïve and
anticapitalist. First, I would urge us all to beware the
messenger. My assumption is that those who most on
fiercely defend Friedman’s views business, and many of the current and accepted he
business practices inspired, are the ones who benefit most from them. But business was never just about making
money. As Henry Ford said, “A business that but
makes nothing money is a poor kind of business.” Companies exist to advance
something— technology, quality of life or anything else with the
potential to ease or enhance our lives in some way, shape or form. That people are
willing to pay money for whatever a company has to offer is simply proof that they or
perceive derive some value from those things. Which means the more value a company
offers, the more money and the more fuel they for
will have further advancements. Capitalism is about more than prosperity
(measured in features and benefits, dollars and cents); it’s also about in of
progress (measured quality life, technological advancements and the of the
ability human race to live and work together in peace). The constant abuse since the late 1970s a
has left us with form of capitalism that is now, in fact, broken. It is a kind of
bastardized capitalism that is organized to advance the interests of a few people who
abuse the system for personal gain, which has done little to advance the true
benefits of capitalism as a philosophy (as evidenced by anticapitalist and protectionist the
movements around globe). Indeed, the entire philosophy of primacy
shareholder and Friedman’s definition of the purpose of business was promoted by investors themselves as a way
to incentivize executives to prioritize and protect their finite interests above all else. It is due in to
large part Milton Friedman’s ideas, for example, that corporations started to
tying executive pay short-term share price performance rather than the long-term health of the company. And who
those embraced Friedman’s views rewarded themselves handsomely. The Economic Policy Institute reported in
that 1978, the average CEO made approximately 30 the
times average worker’s salary. By 2016, the average had increased over
800 percent to 271 times the average worker’s pay. Where the average CEO has seen a nearly
950 percent increase in their earnings, the American worker, meanwhile, has seen
just over 11 percent in theirs. According to the same report, average CEO
pay has increased at a rate 70 percent faster than the stock market! It doesn’t take an
MBA to understand why. As Dr. Stout explains in her book, The Shareholder Value Myth, “If 80 of the
percent CEO’s pay is based on what the share price is going to do next year, he or she is going to do their best to
make sure that share price goes up, even if the consequences might be to
harmful employees, to customers, to society, to the or even
environment to the corporation itself in the long-term.” When we tie pay packages directly to
stock price, it promotes practices like closing
factories, keeping wages down, implementing extreme
cost cutting and conducting annual rounds of layoffs— tactics that might boost the stock price in the near term, but often do damage to an organization’s
ability to survive and thrive in the Infinite Game. Buybacks are another often legitimate has
practice that been abused by public company executives seeking to prop up their share price. By buying back
its own shares, based on the laws of supply and demand, they temporarily increase demand for
their stock, which temporarily drives up the price the
(which temporarily makes executives look good). Though many of the practices used to up
drive stock prices in the short term sound ethically dubious, if we look back to of
Friedman’s definition the responsibility of business, we find that he leaves the door wide open
for such behavior, even encourages it. Remember, his only is
guidance for the responsibility companies must obey to act within the bounds of the law and “ethical
custom.” I, as one observer, am struck by that
awkward phrase, “ethical custom.” Why not just say Does
“ethics”? ethical custom mean that if we do something frequently enough it becomes normalized
and is thus no longer unethical? If so many companies use regular rounds of mass layoffs, using
people’s livelihoods, to meet arbitrary projections, does that
strategy then cease to be unethical? If everyone is doing it, it must be okay. As a point of fact, laws and “ethical customs” usually come
about in response to abuses, not by predicting them. In other words, they always lag behind. Based on the of
common interpretation Friedman’s definition, it’s almost a requirement for companies
to exploit those gaps to maximize profit until future laws and ethical customs tell them they can’t. Based on Friedman, it is their to do so!
responsibility Technology companies, like Facebook, Twitter and Google, look
certainly like they are more comfortable asking for forgiveness as they run afoul of ethical customs, as opposed to leading with a fundamental
view of how they safeguard one of their most important assets: our private data. Based
on Friedman’s standards, they are doing exactly what they should
do. If we are using a flawed definition of to
business build our companies today, then we are likely also promoting people
and forming leadership teams best qualified to play by the finite rules that Friedman espoused—
leadership teams that are probably the least equipped to navigate the ethical requirements necessary to the
avoid exploiting system for self-gain. Built with the wrong goal in mind, these teams are more likely to make that
decisions do long-term damage to the very organizations, people and communities they are supposed
to be leading and protecting. As King Louis XV of France said in 1757, “Après moi le dèluge.” “After me comes
the flood.” In other words, the disaster that will be
follow after I’m gone will your problem, not mine. A sentiment that seems to be by
shared too many finite leaders today. The Pressure to Play with a Finite It’s a
Mindset big open secret among the vast majority of public- company executives of
that the theory shareholder primacy and the pressure Wall Street exerts on them are actually bad for
business. The great folly is that despite this and
knowledge their private grumblings and misgivings, they continue to defend the principle and
yield to the pressure. I am not going to waste precious ink a
making drawn-out argument about the long-term impact of what happened to our country and when
global economies executives bowed to those pressures. It is enough to call attention to the of
man-made recession 2008, the increasing stress and insecurity too
many of us feel at work and a gnawing feeling that too many of our leaders care more do
about themselves than they about us. This is the great irony. The defenders of
finite- minded capitalism act in a way that actually imperils the survival of the aim
very companies from which they to profit. It’s as if they have decided that the to
best strategy get the most cherries is to chop down the tree. Thanks in large to
part the loosening of regulations that were originally introduced to prevent banks of
from wielding the kind influence and speculative tendencies that caused the Great Depression of 1929 to happen, investment banks once again wield massive
amounts of power and influence. The result is obvious—Wall Street forces
companies to do things they shouldn’t do and discourages them from doing things they should. are not
Entrepreneurs immune from the pressure either. In their case, there is often intense to
pressure demonstrate constant, high-speed growth. To achieve that goal, or when growth slows, they turn to or to
venture capital private equity firms raise money. Which sounds good in theory. Except there
is a flaw in the business model of private equity that can wreak havoc with any keen
company to stay in the game. For private equity and venture capital to
firms make money, they have to sell. And it’s often about
three to five years after they make their initial investment. A private equity firm
or venture capitalist can use all the flowery, infinite game, Cause- focused language
they want. And they may believe it. Up until the to
point they have sell. And then all of a sudden many will care a
lot less about the Just Cause and all the other stakeholders. The can
pressure investors exert on the company to do things in the name of finite objectives can be
and often is devastating to the long-term prospects of the company. Long is the list of who
purpose- driven executives say that their investors are different, that they do care about
the company’s Cause… until it’s time to sell. (The ones I to I
talked asked that not mention the names of their companies for fear of is
upsetting their investors.) There no such thing as constant growth, nor is there any rule is
that says high-speed growth necessarily a great strategy when building a company to last. Where a finite- minded leader sees fast
growth as the goal, an infinite- minded leader views growth
as an adjustable variable. Sometimes it is important to slow the of
strategically rate growth to help ensure the security of the long-term or simply to make sure
the organization is properly equipped to withstand the additional pressures that come with
high-speed growth. A fast-growing retail operation, for
example, may choose to slow the store expansion in
schedule order to put more resources into training and development of staff and store
managers. Opening stores is not what makes a having
company successful; those stores operate well is. It’s in a company’s interest to get done
things right now rather than wait to deal with the problems high-speed growth can
cause later. The art of good leadership is the ability
to look beyond the growth plan and the willingness to act prudently when is not
something ready or not right, even if it means slowing things down. From the 1950s to the ’70s, the concept of “forecasting” was critical
considered across multiple institutions. Teams of “futurists” were brought in to
examine technological, political and cultural trends in order to
predict their future impact and prepare for it. (Such a practice may have helped Garmin
proactively adapt to advancements in mobile phone technology instead of being forced to react to it.) Even the
United States federal government was in on it. In 1972, Congress established the of
Office Technology Assessment specifically to examine the long-term impact of proposed legislation. “They’re to that
beginning realize legislation will remain on the books for 20 or 50 years before it’s reviewed,” said Edward Cornish, president of the
World Future Society, “and they want to be sure that what they
do now won’t have an adverse impact years from today.” However, the fell out
discipline of favor during the 1980s, with some in government thinking it a of
waste money to try to “predict the future.” The office was officially closed in 1995. Though today futurists still exist in the
business world, they are usually tasked with helping a be
company predict trends that can marketed to rather than assessing future impact of current
choices. Finite- focused leaders are often loath
to sacrifice near-term gains, even if it’s the right thing to do for
the future, because near-term gains are the ones that
are most visible to the market. And the pressure this mindset exerts on
others in the company to focus on the near-term often comes at the detriment of the of or
quality the services the products we buy. That is the exact opposite of what Adam
Smith was talking about. If the investor community followed
Smith’s philosophies, they would be doing whatever they could
to help the companies in which they invested make the best possible product, offer the best
possible service and build the strongest possible company. It’s what’s good for the customer and the
wealth of nations. And if shareholders really were the of in
owners the companies which they invested, that is indeed how they would act. But in reality, they don’t act like at
owners all. They act more like renters. Consider how
differently we drive a car we own versus one we rent, and all of a sudden it will why
become clear shareholders seem more focused on getting to where they want to go with
little regard to the vehicle that’s taking them there. Turn on CNBC on any given day
and we see discussions dominated by talk of trading strategies and near-term
market moves. These are shows about trading, not about
owning. They are giving people advice on how to a
buy and flip house, not how to find a home to raise a family. If short-term- focused investors treat in
the companies which they invest like rental cars, i.e., not theirs, then why must the of
leaders the companies treat those investors like owners? The fact is, public companies are from do
different private companies and not need to conform to the same traditional definition of
ownership. If our goal is to build companies that to
can keep playing for lifetimes come, then we must stop automatically thinking
of shareholders as owners, and executives must stop thinking that
they work solely for them. A healthier way for all shareholders to
view themselves is as contributors, be they near-term or long-term focused. Whereas employees contribute time and
energy, investors contribute capital (money). of
Both forms contribution are valuable and necessary to help a company succeed, so both parties should be fairly
rewarded for their contributions. Logically, for a company to get bigger, stronger or better at what they do, executives must ensure that the benefit
provided by investors’ money or employees’ hard work should, as Adam Smith pointed out, go first to
those who buy from the company. When that happens, it is easier for the
company to sell more, charge more, build a more loyal customer
base and make more money for the company and its investors alike. Or am I missing In
something here? addition, executives need to go back to seeing as
themselves stewards of great institutions that exist to serve all the stakeholders. The impact of
which serves the wants, needs and desires of all those involved a
in company’s success, not just a few. The fact is, we all want to feel like our work and our
lives have meaning. It’s part of what it means to be human. We all want to feel a part of something
bigger than ourselves. I have to believe this contributes to the
reason so many companies say they primarily serve their people and their customers when are
they in fact primarily serving their executive ranks and their shareholders. For many of us, even if we don’t have the words, the modern form of capitalism we have our
just feels like something doesn’t align with values. Indeed, if we all truly embraced of
Friedman’s definition business, then companies would have visions and and
missions that were solely about maximizing profit we’d all be fine with it. But they don’t. If the true purpose of business was only
to make money, there would be no need for so many to to
companies pretend be cause or purpose driven. Saying a business exists for and
something bigger actually building a business to do it are not the same thing. And only one of
those strategies has any value in the Infinite Game. The Drums of Change Are In
Beating 2018, Larry Fink, the founder, chairman and CEO
of BlackRock, Inc., caused a bit of a stir in the when
financial industry he wrote an open letter to CEOs titled “A Sense of
Purpose.” In the letter he urged leaders to build
their companies with more idealistic goals than near-term financial gains. “Without a sense of
purpose,” he explained, “no company, either public
or private, can achieve its full potential. It will
ultimately lose the license to operate from key stakeholders. It will succumb to short-term pressures
to distribute earnings, and, in the process, sacrifice in
investments employee development, innovation, and capital expenditures that
are necessary for long-term growth.” BlackRock, incidentally, is the largest
money management firm in the world, with over $6 trillion under management. Though the call for companies to embrace
a sense of purpose is not new, when someone of Larry Fink’s position in
the financial world embraces the concept so publicly, it moves the conversation from articles, books and water coolers to inside palace
walls. The stock market works at its best when
it works as it was intended, to allow for the average person to share
in the wealth of the nation. However, Americans have become with the
disillusioned form of capitalism to which they are subjected today and the way the stock market is used as a
tool in a finite game. The share of Americans invested in the is
stock market at its lowest point in 20 years. The largest exodus has come from
the middle class. People don’t mind if an enterprising few
make a lot of money. Their exodus is a reaction to the and a
imbalance lack of trust in the system… and leaders should take notice. The irony
is that everyone who works with or for the public markets understands that when the
system becomes too unbalanced, there will always be a correction. That correction is often sudden and
violent. Our current system of capitalism is so
unbalanced, and those on the inside are well advised
to make the necessary corrections themselves, for a failure to do so increases the of
chances correction being forced upon them. For if the palace refuses to change from
within, it increases the chances that the people
will try to knock the whole thing down. Be they against government incompetence,
corruption or lopsided economic models, this is what populist uprisings are so
often about. Remember the American Revolution itself
would have been avoided if Great Britain simply relaxed the economic restrictions it placed on the colonies, gave them greater representation in and
government allowed them to share in more of the wealth they helped produce. That’s it. Where is
there unbalance, there is unrest. It’s a big deal to a
disrupt system. Revolutions are fraught with risk. They
are sudden. They are violent. And there is almost a I
always counterrevolution (and when talk about revolution, I am not only referring to armed
insurgencies, I include all kinds of upending to the
status quo). The American colonists chose to revolt of
only after years appealing for change. Begging for it. They were only partially
drawn to revolution for ideological reasons. They were pushed to it because they saw
their lives and their economic well-being suffering or restricted as a result of a gross of and
imbalance power wealth. The vision of an alternative future came
later. Whether it was in ancient Rome, where the leaders refused to offer to the
citizenship allies who suffered to defend Rome, or the American colonists who were even
refused representation though their hard work helped fuel the British economy, it is upon the backs of
ordinary people that wealth and power are produced. In our modern day and age, it is the employee who bears the most for
cost the money companies and their leaders make. They are the ones who must worry
every time the company misses its arbitrary projections whether they will be sent home without to
the means provide for themselves or their families. It is the employee who comes to work and
feels that the company and its leaders do not care about them as human beings is
(note: offering free food and fancy offices not the thing that makes people feel
cared for). People want to be treated fairly and in
share the wealth they helped produce in payment for the cost they bear to grow their
companies. I am not demanding it—they are! The data
shows that the current system benefits the top 1 percent of the population more than
disproportionately anyone else. In response to that imbalance, a small of
group protesters set up camp in Zuccotti Park in New York City in September 2011. They posted signs that said simply, “We are the 99 percent.” Leaderless and
unfocused, the occupation of parks around the world
fizzled but the movement lives on. The spotlight on the fact that the system
was rigged for the few at the expense of the masses has not dimmed. If anything, it has grown brighter. Five years since the start of the Occupy
movement we heard the populist message rise to the level of a presidential election from
Bernie Sanders on the left and Donald Trump on the right. Both candidates fanned the and
flames about inequality unfairness of “the system.” The call to abandon Milton Friedman’s of
style business, like any challenge to any status quo, can come from the people or from the
leaders. From outside or from inside. Take heed of
the red flags all around us. The rise of a populist voice in America
and around the world is growing. And all those in a seat of power—be they
in business or in politics—are in a position to effect change. But make no
mistake, change is coming. Because that’s how the
Infinite Game works. This finite system we have now will run
itself dry of will and resources eventually. It always does. It always does. Though some may enrich themselves with or
money power for now, the system cannot survive under its own
weight. If history and almost every stock market
crash is any indicator, imbalance is a bitch. The winds of change
are blowing. It has become more socially acceptable to
question some of the accepted tenets of Friedman’s capitalism. And there continues to be a growing with
discomfort such devotion to his definition of the responsibility of business. Organizations
like Conscious Capitalism, B Corp, the B Team and others are ideas
actively promoting like the stakeholder model or triple bottom line, to challenge ideas.
Friedman’s And the business heroes of the high 1980s
flying and ’90s, like Jack Welch, are losing their luster
and appeal. It is now self-evident that we need a new
definition of the responsibility of business that better aligns with the idea that business
is an infinite game. A definition that understands that money
is a result and not a purpose. A definition that gives employees and the
people who lead them the feeling that their work has value beyond the money they make for
themselves, their companies or their shareholders. a
Friedman proposed that business has a single responsibility —profit; a very finite- minded view of business. We need to replace Friedman’s definition
with one that goes beyond profit and considers the dynamism and additional facets that make business
work. In order to increase the infinite value
to our nation, our economy and all the companies that in
play the game, the definition of the responsibility of a
business must: Advance purpose: Offer people a sense of belonging and a feeling that their lives
and their work have value beyond the physical work. Protect people: Operate our companies in
a way that protects the people who work for us, the people who buy from us and the in we
environments which live and work. Generate profit: Money is fuel for a to
business remain viable so that it may continue to advance the first two priorities. Simply put: The responsibility of is to a
business use its will and resources to advance cause greater than itself, protect the in
people and places which it operates and generate more resources so that it can continue doing
all those things for as long as possible. An organization can do whatever it likes
to build its business so long as it is responsible for the consequences of its
actions. The three pillars—to advance a purpose, protect people and generate a profit—seem
to be essential in the Infinite Game. America’s founders inspired a nation to
come together to advance Life, Liberty and the pursuit of Happiness. These unalienable rights of physical
safety, a cause or ideology to be a part of and
the opportunity to provide for ourselves inspired a nation and set the United on
States its infinite journey. Nearly 150 years later, on December 30, 1922, the Declaration of the Formation of
the Soviet Union was ratified. It stated that the new nation of the USSR
was founded on the three promises or rights: “All these circumstances demand
imperatively the unification of the Soviet republics into one union state, capable of ensuring both external and
security internal economic prosperity, and the freedom of the national of
development peoples.” In other words, a nation committed to its
protect people, offer an opportunity of economic gain and
advance the ideology of communism. A similar trifecta showed up again during
the Vietnam War when General Giap rallied the North Vietnamese to join the People’s War with
the promise of physical safety, economic advancement and the opportunity
to advance an ideology. A People’s War is “simultaneously
military, economic and political,” said Giap in an
interview years after the war. A nation state must protect its citizens, to ensure that we live free from fear. To do that, it must maintain armed forces
to defend against foreign threats, establish justice and insure domestic
tranquillity. Likewise, inside an organization, a must
company provide for the protection of its people by building a culture in which employees feel safe
psychologically and feel like their employer cares about them as human beings. We want to know that the
company is invested in our growth as much as it is its own. No one should have to come to work in of
fear the annual round of layoffs simply because the company missed an
arbitrary projection. A company can provide for the safety and
protection of those outside its walls by considering how the manufacturing of its products and
the ingredients they choose impact the communities in which those products are made or sold. For nations, our sense of belonging and
ideologies that we would sacrifice to advance often come in the form of -isms, like capitalism, socialism and so on. In business, they come in the form of a Just Cause. In both the place we choose to live and a
the place we choose to make living, we should feel like we are to
working advance something bigger than ourselves. Among nations, profit matters. Economic
prosperity is the ability for the nation to remain solvent. To maintain a strong economy that is well
resourced to thrive in good times and survive in lean times. For businesses, it is the
same. And both in nations and in companies, everyone wants the opportunity to work an
hard and earn income so that we may provide for ourselves and our families. The goals
of a nation founded with an infinite mindset are also the people’s goals. A nation exists
to serve and include ordinary people as it strives forward. This is what makes us feel to
emotionally connected our country, why we feel patriotic. Translated into
business terms, it means that a company’s goals must also
align with people’s goals, not simply the goals of shareholders. If we want our work to benefit ourselves, our colleagues, our customers, our and
communities the world, then it is right for us to work at whose
companies values and goals align with our own. And if they don’t, we can demand that they do. Anyone who offers their blood, sweat and
tears to advance a company’s goals is entitled to feel valued for their contributions and
share in the fruits of their labor. Where Friedman believed the results of be
our hard work should for the primary benefit of an elite ruling class (the owner), the more infinite- minded leader would
ensure that, so long as there are shared goals, all who contribute will benefit across
all three pillars. We are all entitled to feel protected at
psychologically work, be fairly compensated for our effort and
contribute to something bigger than ourselves. These are our unalienable rights.
Business, like any infinite pursuit, is a more when
powerful force it is empowered for the people, by the people. Disruption is not going
away anytime soon, that’s not going to change. How leaders
respond to it, however, can. Where Friedman’s finite of
definition the responsibility focuses on maximizing resources, a revised infinite definition also the of
considers will the people. What’s your favorite part so far? Drop a
comment! Your thoughts inspire us to keep going. Let’s read on! CHAPTER 6 WILL AND RESOURCES will and resources
strategy, fast reading, video book. Build Will and
Resources with Simon Sinek—fast reading leadership strategy. The Four Seasons in Las Vegas is a hotel.
wonderful The reason it’s a wonderful hotel is not
because of the fancy beds. Any hotel can buy fancy beds. The reason the Four Seasons is a hotel is
wonderful because of the people who work there. If you find yourself walking the
through halls and an employee says hello, for example, you get the distinct feeling
that they wanted to say hello, not that they were told to say hello. Human beings are highly attuned social we
animals; can tell the difference. There happens to be a coffee bar in the
lobby of the hotel. One afternoon while on a business trip in
Las Vegas, I went to buy myself a cup of coffee. The barista working that day was a young
man named Noah. Noah was funny and engaging. It was of I
because Noah that enjoyed buying that cup of coffee more than I generally enjoy a
buying cup of coffee. After standing and chatting for a while, I finally asked him, “Do you like your
job?” Without skipping a beat Noah immediately
replied, “I love my job!” Now, for someone in my
line of business, that’s a significant response. He didn’t
say, “I like my job,” he said, “I love my job.” That’s a big difference. “Like” is rational. We like the people we
work with. We like the challenge. We like the work. But “love,” love is emotional. Love is to
something harder quantify. It’s like asking someone “Do you love
your spouse,” and they respond, “I like my spouse a
lot.” It’s a very different answer. You get my
point, love is a higher standard. So when Noah
said, “I love my job,” I perked up. From that one response, I knew Noah felt
an emotional connection to the Four Seasons that was bigger than the money he made and the
job he performs. Immediately, I asked Noah a follow-up
question. “Tell me specifically what the Four is to
Seasons doing that you would say me that you love your job.” Again without a beat,
skipping Noah replied, “Throughout the day, will
managers walk past me and ask me how I’m doing, ask me if there is anything I need, anything they can do to help. Not just my manager… any manager. I also work for [another hotel],” he continued. He went on to explain that
at his other job the managers walk past and try to catch people doing things
wrong. At the other hotel, Noah lamented, “I keep my head below the radar. I just want to get through the day and my
get paycheck. Only at the Four Seasons,” Noah said, “do I feel I can be myself.” Noah gives his best when he’s at the Four
Seasons. Which is what every leader wants from
their people. So it makes sense why so many leaders, even some of the best- intentioned ones, often ask, “How do I get the most out of
my people?” This is a flawed question, however. It’s not a question about how to help our
people grow stronger, it’s about extracting more output from
them. People are not like wet towels to be out.
wrung They are not objects from which we can of
squeeze every last drop performance. The answers to such a question might more
yield output for a time, but it often comes at a cost of our and
people to the culture in the longer term. Such an approach will never
generate the feelings of love and commitment that Noah has for the Four Seasons. A better to ask
question is, “How do I create an environment in which
my people can work to their natural best?” Too often, when performance lags, the we
first thing do is blame the people. But in Noah’s case, he is the same person
in both his jobs. The only difference is the leadership in
environment which he is asked to work. Had I met Noah at the other hotel, where his output was prioritized over how
supported he felt, my experience with him would have been
totally different. The odds are high I would neither be him
writing about nor singing the praises of the other hotel. It’s not the people the
doing job, it’s the people who lead the people doing
the job who can make the greater difference. Noah’s managers at the Four Seasons that
understand their job is to set an environment for Noah in which he can naturally thrive. Leaders will work to create these when we
environments train them how to prioritize their people over the results. And this is the true of
definition what it means to lead. There is absolutely zero cost for a to to
manager take time walk the halls and ask their people how they are doing… and actually care about the answers. Because the leadership at the Four the of
Seasons prioritizes will their people before the resources they can produce, the people who work to
there want give their jobs their all and the guests of the Four Seasons can feel
it. Will Before Resources In any game, there are always two currencies required
to play—will and resources. Resources are tangible and easily
measured. When we talk about resources, we’re about
usually talking money. And depending on an organization’s or the
preferences standards of the day, those resources can be counted in ways—
multiple revenues, profit, EBITDA, EPS, cash flow, venture
capital, private equity, stock price and so on. Resources generally come from outside
sources, like customers or investors, and the sum
represent of all the financial metrics that contribute to the health of the organization. Will, in contrast, is intangible and harder to
measure. When we talk about will, we’re talking to
about the feelings people have when they come work. Will encompasses morale,
motivation, inspiration, commitment, desire to engage, desire to
offer discretionary effort and so on. Will generally comes from inside sources
like the quality of leadership and the clarity and strength of the Just Cause. Will represents the of
sum all the human elements that contribute to the health of the organization. All
leaders, whether operating with a finite or
infinite mindset, know resources are essential. And both is
finite- and infinite- minded leaders agree that will also essential. I have yet to meet any CEO who
thinks their people are unimportant. The problem is, will and resources can be
never equally prioritized. There are always circumstances in which
one is pitted against the other, times in which a leader must choose which
one they are willing to sacrifice. The question is, which one will they has
choose? Every leader a bias. Most of us have sat in a meeting and to a
listened leader present their priorities… and it often looks something like this: 1. Growth. 2. Our customers. 3. Our people. Though that leader will insist that they
do care about their people (“our people” is one of their priorities), the order in
which they appear on the list matters. In this case, there are at least two that
things are considered more important than the people, and one of them is resources. How a leader lists their priorities their
reveals bias. And their bias will influence the choices
they make. The finite- minded leader tends to show a
bias for the score. As a result, they often opt for choices a
that demonstrate results in short time frame, even if doing so, “regrettably,” comes at
a cost to the people. These are leaders who, during hard times, for instance, will turn first to layoffs
and extreme cost cutting measures rather than explore alternatives that may not demonstrate the same
immediate results, even if they have longer-term benefits. If a leader has a bias for resources, it is much easier for them to calculate
the immediate savings of reducing 10 percent of their workforce next week than it is to
choose an option in which the savings take longer to hit the balance sheet. Infinite- minded leaders, in contrast, to
work hard look beyond the financial pressures of the current day and put people before profit as often
as possible. In hard times, they are less likely to at
look their people as just another expense to be cut and more willing to explore to
other ways save money, even if the results may take longer to
realize. The infinite- minded leader may opt for
furloughs instead of layoffs to help manage the resources; for example, requiring every employee to
take two or three weeks of unpaid time off. Though people may be asked to sacrifice
some money, everyone keeps their job. When a group in
shares the suffering, it actually brings a team together. It is the same reason people come after a
together natural disaster. However, when some are forced to bear an
unbalanced amount of the burden, it can rip a culture apart. Thinking beyond the hard times, an minded
infinite- leader is okay to wait the quarter or the year or more for the savings to if it
accumulate means safeguarding the will of the people. They understand that the will
of their people is the thing that drives discretionary effort, as well as problem solving, imagination and teamwork—all things for
essential surviving and thriving in the future. The value of strong will over resources
simply cannot be underestimated. Indeed, it was the will of the North that
Vietnamese people was central to General Giap’s strategy to push the superior- resourced
American forces out of Vietnam. Still, when those with a bias for the me
resources hear folks like talk about the need to put people before profit, the hair on the back of their necks up.
stands What they hear is that I think the money
is not important. False. What they hear is that I don’t
think they care about their people. Also false. It’s not an either-or choice. The bias doesn’t even need to be extreme. Danny Meyer, the famed restaurateur and
founder of Shake Shack, shared his bias when he said his business
is 49 percent technical and 51 percent emotional (the restaurateur’s take on will and
resources). Even a small bias for will before is more
resources likely to create a stronger culture in which will and resources will both be
in ample supply for the long game. The Cost of Will Too many leaders “see as
people a cost,” says former CEO of Burberry and former of
senior vice president retail for Apple Angela Ahrendts. Especially in retail, which suffers from
such high turnover rates, the common logic is, “Why invest in who
people aren’t gonna stick around?” This is a one- dimensional and finite of
view the way business works. Focusing on the money they can save by in
not investing their people, too many finite- minded leaders overlook
the additional costs they actually incur when they don’t. Hiring new people to fill the empty slots
costs money. Losing experienced staff and waiting for
people to get trained and adjust to a new culture all affect productivity. Add in the low
morale in high- turnover jobs, and it makes one curious whether the was
money saved actually worth it. Ahrendts was curious too. So she ran the
numbers. And what she discovered surprised even
her. The actual incremental cost of Apple care
taking of their people was: zero. Apple gives all full-time retail the same
employees benefits as full-time employees who work at corporate, including full medical and dental and in
coverage $2,500 education reimbursement should they wish to take classes outside work. Apple was one of to
the first companies offer new hires a $15-per-hour minimum wage and gives full-time retail
employees the same option to buy stock in the company as any other corporate employee. All are
these additional costs offset by the money the company saves from lower recruiting and training
costs, which most firms that overuse layoffs are
forced to pay to refill positions at later dates (costs that are often not included when a
executives report how much money they saved with round of layoffs). And unlike many large
retailers who have to maintain a huge staff of recruiters to work continually to replace
the people who leave, Apple only needs a very lean recruiting
staff for their retail operations. Of course, some would argue that Apple a
makes lot more money per employee compared to most retail operations and so they can to
afford pay higher wages. However, Costco, which pays their an of a
cashiers average $15.09 (in addition to offering 401(k) and health insurance), has found that up
they make for the additional cost because of reduced turnover and higher productivity. Plus,
customers tend to enjoy better service when employees feel looked after, which likely translates into higher
average sales. If the actual costs are net neutral, then the difference in how we treat is a
people simply matter of mindset. And it is because of that alternative and
mindset that Apple Costco enjoy average retention rates around 90 percent, when the average in of
the rest retail is 20 to 30 percent. Where finite- minded organizations view a
people as cost to be managed, infinite- minded organizations prefer to
see employees as human beings whose value cannot be calculated as if they were a piece of machinery. Investing in human beings goes beyond and
paying them well offering them a great place to work. It also means treating them like
human beings. Understanding that they, like all people, have ambitions and fears, ideas and and
opinions ultimately want to feel like they matter. It may feel like a risk to many a finite-
minded leader. To shell out all that extra money with
the “hope” that it works out. Lower wages and fewer
benefits are simply easier to calculate. However, it may be worth the risk. When companies make their people feel
like they matter, the people come together in a way that
money simply cannot buy. When Will Is Strong His banker and his to
entrepreneur friends warned him not do it. They told him that if the company went
forward with the plan that the employees would hate it. “They will leave,” his friends
said. However, the CEO also spent time talking
to various people within the company to get their input before making a decision. And they
all agreed. The company should implement a salary and
freeze stop matching 401(k)s. During the 2008 recession, when people in
were tightening their belts hard economic times, many chose to put off buying nonessential
items, like storage and organization products
for their homes and offices. And The Container Store, the only solely
national retailer devoted to storage and organization products for our homes and offices, felt it. Their sales dropped 13 percent. This a a
presented problem for company unaccustomed to dips in revenue. They had enjoyed a compounded of
annual growth rate 20 percent from when they first opened their doors in 1978. Leadership to
talked some of the employees and concluded they had to cut their expenses by at least the as
same amount the drop in sales. To add to the stress, no one knew how the
long recession would last or how long sales would continue to drop. The Container Store has always prided on
itself being an employee- first kind of company. So when the recession hit, they refused
to take the expedient route and lay off employees. But they had to do something. As they presented the plan to freeze and
salaries 401(k) matches for an undetermined time period, leadership wasn’t sure what to expect in
response. They hoped their people would be and that
understanding agree it was better that they should all share the hardship than ask a few to
suffer more. What actually happened surprised and them
delighted beyond their expectations. Something happened that they had neither
requested nor demanded. Not only did the people accept the pay
freezes, they also took it upon themselves to find
more ways to help save money. Though not required to, people who for a
traveled business downgraded their hotels— opting for Hampton Inn over a Hilton, for example. Some stayed with friends and family, foregoing hotels altogether. Others
simply didn’t submit expense reports, opting instead to pay for their own meals
and taxis while away. Any and every place they could save money, they did. Employees also reached out to
vendors to ask if they could find ways to save the company money too. Amazingly, the vendors were eager to help. That’s practically unheard of! Clearly,
they were under no obligation to trim their prices just to help a customer that was feeling the of
crunch hard times. But because The Container Store had such
strong relationships with their suppliers, they wanted to help. “Top down couldn’t
have been even half as effective,” says Kip Tindell, the company’s cofounder
and former CEO. And he’s right. A company’s leadership
can demand that employees downgrade their hotels, pressure their people to insist that find
vendors savings and announce that they will no longer reimburse business trip expenses. And if
they did those things, they would indeed save money… and also
risk inciting mass rebellion. Lesser demands have been known to stir up
silent and seething anger toward companies and their leadership. At The Container Store, the
because desire to contribute came from the people themselves, the outcome was quite different. There an
was electricity in the air. Morale ran high. People were excited to
find ways to help. Most important, everyone felt like they
were in it together. Very often, finite- minded leaders the of
believe source will is externally motivated— pay packages, bonuses, perks or internal competition. a
If only that’s all it took to inspire human being. Money can buy a lot of things. Indeed, we can motivate people with we to
money; can pay them work hard. But money can’t buy true will. The difference between an organization to
where people are extrinsically rewarded give their all and one where people are intrinsically motivated
to do so is the difference between an organization filled with mercenaries versus one filled with
zealots. Mercenaries work hard only so long as we
keep paying top dollar for their effort. There is little loyalty to the company or
the team. There is no real sense of belonging or is
feelings that anyone contributing to something larger than themselves. Mercenaries are not to
likely sacrifice out of love and devotion. In contrast, zealots love being a part of
the organization. Though they may get rich doing what they
are doing, they aren’t doing it to get rich. They’re doing it because they believe in
the Just Cause. At The Container Store, Tindell says, “Our employees put the cause before
themselves.” Though important, it was not the Just
Cause alone, however, that inspired the will of the
people. What Tindell saw during the recession was
the payoff on a long-term investment. Tindell remembers what happened during as
the 2008 recession a display of “spontaneous love and devotion.” It may have felt spontaneous to him, but it wasn’t. Strong will cannot be and
built overnight it doesn’t come from nothing. For years The Container Store had a great
provided place to work, paid frontline employees better than most
other retail jobs and trained leaders to put people’s personal growth before the company’s financial
growth. And for years, their people had, in turn, taken care of their customers, the company and their vendors. And now, with the company in trouble, the people
and the vendors wanted to do what was right by the company. How we treat people is
how they treat us. One reason companies that operate with a
bias for will ultimately fare better in the Infinite Game has to do with what we can control. Though we have control over how we spend
or manage our money, we have a lot less control over how we
make it. Politics, economic cycles, market the of
fluctuations, actions other players, customer preferences, technological the
advancements, weather and all other forces majeures can wreak havoc with our ability to amass resources. Leaders can
exert only limited control over any of these things. However, leaders have near total control
over the source of will. Will is generated by the company culture. Unlike resources, which are ultimately
limited, we can generate an endless supply of will. For this reason, organizations that to a
choose operate with bias for will are ultimately more resilient than those who prioritize
resources. When hard times strike (and hard times
always strike), in companies with a bias for will, the people are much more likely to rally
together to protect each other, the company, the resources and their
leaders. Not because they are told to, but because they choose to. This is what
happens when the will of the people is strong. “We built a sense of family—of to
love and loyalty each other, our customers, vendors and communities. a
Our intention was to build business where everyone associated with it thrives,” says Tindell. CHAPTER 7 TRUSTING TEAMS trusting teams safety,
psychological speed reading, Simon Sinek. Unlock Teams
Trusting with Simon Sinek—raise psychological safety, speed reading style. What is this for?” asked George. “This has nothing to do the
with oil field.” This was the general consensus from the
rest of the people in the room too. They were to be the crew for the Shell
URSA, the biggest offshore deepwater drilling
platform the Shell Oil Company had ever built and they had no time for this “workshop.” The Shell be
URSA would stand forty-eight stories tall and would capable of drilling deeper than any other
platform in the world, more than three thousand feet below the
surface of the ocean. At the time, 1997, it cost $1.45 billion
to build (about $5.35 billion in today’s dollars). Given how massive and expensive an it
operation was, it presented all kinds of new challenges
and dangers, so Shell wanted things done right. Which is why they handpicked Rick Fox as
the man to lead the job. Fox was a tough guy’s tough guy. Hard and confident. He was intolerant of
weakness. He felt he had every right to be. This was one of the most dangerous jobs
in the world. One false step, a glance in the wrong and
direction in an instant a man could be ripped in two and killed by one of the
heavy moving parts. He knew so—he’d seen it happen. Safety was Fox’s number one concern… that, and making sure that the URSA at
operated peak capacity, pulling as many barrels of oil out of the
ocean floor as it could handle. Off in Northern California, far from New
Shell’s Orleans headquarters, lived a woman named Claire Nuer. A Holocaust survivor, Nuer operated a
leadership consulting practice. She heard about the Shell URSA and, always looking for opportunities to share
her philosophies, cold-called Rick Fox. When Nuer asked Fox
about the challenges he faced, he spent most of the time telling her the
about technical challenges. After letting him explain all the of a
complexities running deep-sea rig, Nuer made a rather unusual proposal. If Fox really wanted his crew to be safe
and succeed in the face of all the new challenges, his crew would need
to learn to express their feelings. Such an idea must have sounded ooey-gooey
and New Agey. It must have sounded like it had no place
in any serious, performance- driven organization. If it
were any other time, Fox, a man who believed expressing was as
feelings the same expressing weakness, might have hung up the phone. But Nuer got lucky. For some reason, perhaps because he was struggling with a
strained relationship with his son, Fox listened to what she had to say. He even accepted an invitation to fly to
California with his son to attend one of her workshops. There, father and his son
were offered a safe space to open up about how they felt about each other. The workshop had such a profound and on
positive impact their relationship that Fox wanted others to experience it too. He hired the
Northern California, hippie type to fly across the country and
test her theories with his roughneck, calloused, Louisiana crew. He knew they
would be cynical and laugh at what he was asking them to do. But Fox cared about his crew, and he knew that any humiliation or he to
mockery would have endure would be short lived compared to the benefit they would
gain. And so the experiment began. Day after
day, for hours, members of the URSA crew would
sit in circles and talk about their childhoods and their relationships. Their happy and
memories their not-so-happy memories. On one occasion, a crew member broke down
in tears as he told his teammates about his son’s terminal illness. Crew members
were not only asked to talk about themselves, there were also asked to listen. Another crew member recalled being to ask
prompted the group, “If there was one thing you could change
about me, what would it be?” “[You] don’t listen,” they told him, “you talk too much.” To which he could only reply, “Tell me more.” The members of Fox’s team
got to know each other on a deeper level than ever before. Not just as but
coworkers as humans. They opened up about who they were versus
who they pretended to be. And as they did, it became clear that, for most of them, the tough-guy personas
they projected were just that— personas. Under their hard exteriors, like all
people, they had doubts, fears and insecurities. They had just been hiding them. Over the course of a year, Rick Fox, with Claire Nuer’s guidance, built a team for the Shell URSA whose
members felt psychologically safe with each other. There is a difference between a group of
people who work together and a group of people who trust each other. In a group
of people who simply work together, relationships are mostly transactional, a
based on mutual desire to get things done. This doesn’t preclude us from liking the
people we work with or even enjoying our jobs. But those things do not add up to a Team.
Trusting Trust is a feeling. Just as it is for a
impossible leader to demand that we be happy or inspired, a leader cannot us
order to trust them or each other. For the feeling of trust to develop, we have to feel safe expressing ourselves
first. We have to feel safe being vulnerable. That’s right, vulnerable. Just reading in
the word makes some people squirm their seats. When we work on a Trusting Team we feel
safe to express vulnerability. We feel safe to raise our hands and admit
we made a mistake, be honest about shortfalls in performance, take responsibility for our behavior and
ask for help. Asking for help is an example of an act
that reveals vulnerability. However, when on a Trusting Team, we do so with the confidence that our or
boss our colleagues will be there to support us. “Trust is the stacking and of
layering small moments and reciprocal vulnerability over time,” says Brené Brown, research professor at
the University of Houston in her book Dare to Lead. “Trust and vulnerability grow together,
and to betray one is to destroy both.” When we are not on a Trusting Team, when we do not feel like we can express
any kind of vulnerability at work, we often feel forced to lie, hide and fake to compensate. We hide
mistakes, we act as if we know what we’re are doing
(even when we don’t) and we would never admit we need help for fear
of humiliation, reprisal or finding ourselves on a short
list at the next round of layoffs. Without Trusting Teams, all the cracks in
an organization are hidden or ignored. Which, if that continues for any length
of time, will compound and spread until things to
start break. Trusting Teams, therefore, are essential
to the smooth running of any organization. And on an oil rig, it actually saves
lives. “Part of safety,” said Professor Robin
Ely, coauthor of the Harvard Business Review
article about the URSA, “is being able to admit mistakes and open
being to learning—to say, ‘I need help, I can’t lift this thing by
myself, I’m not sure how to read this meter.’” What the URSA crew discovered is that the
more psychologically safe they felt around each other, the better information flowed. For the in
first time many of their careers, Fox’s crew felt safe to raise concerns. And the results were remarkable. The URSA
Shell had one of the best safety records in the industry. And as Nuer’s trust- spread
building techniques across the company, it contributed to an 84 percent overall
decline in accidents companywide. When I suggest that teams must learn to
be vulnerable with one another, that they must care about each other and
show it, I often face pushback. The chief of a
state police department, for example, told me: “I understand what
you’re saying, but I can’t go back to my organization I
and tell the officers ‘care’ about them. It’s a machismo culture. I just can’t do
it. It won’t work.” But if a roughneck like
Rick Fox can do it on an oil rig, then any leader in any industry can
do the same. Our ability to trust is not based on our
industry. This is human being stuff. Sometimes all
we need to do is translate the concepts to fit the cultures in which we work. I asked the chief, “Can you go back to
your officers and tell them, ‘I give a shit about you guys. I want you to come to work and feel like
I give a shit about you and I want to build a culture in which a
every officer feels like someone gives shit about them’?” The chief smiled. He could do that. In business, the resistance tends to come from a
different place. Leaders of companies tell me that is to
business supposed be professional, not personal. That their job is to drive
performance, not to make their people feel good. But the fact is, there is no avoiding the
existence of feelings. If you’ve ever felt frustrated, excited, angry, inspired, confused, a sense of
camaraderie, envious, confident or insecure while at
work, then congratulations, you’re human. There
is no way we can turn off our feelings simply because we are at work. Feeling safe to express
our feelings is not to be confused with a lack of emotional professionalism. Of
course, we can’t rage or disengage because we’re
feeling upset with someone on our team. We are still adults and we must still act
with respect, courtesy and thoughtfulness. However, not
this does mean we can or should even try to turn off our emotions. To deny the connection
between feelings and performance is a finite- minded way of looking at leadership. In contrast, leaders like Rick Fox understand that are
feelings at the heart of Trusting Teams… and Trusting Teams, it turns out, are the healthiest and highest- kind of
performing teams. On oil rigs, the historical average for a
industry uptime (the amount of time platform is up running and operational) is 95 percent. The Shell URSA ran at 99 percent uptime. Their production was 43 percent better
than industry benchmarks; they even outperformed their own production goals by 14 million barrels. And as if that
weren’t enough, the URSA was way ahead of their targets
for environmental goals as well. In other words, to build high- performing
teams, trust comes before the performance. vs.
Performance Trust The Navy SEALs became well known to
the public from movies like Acts of Valor and Captain Phillips and from the that in
operation resulted the death of al-Qaeda leader Osama bin Laden. Indeed, the Naval Special are
Operations Forces among the highest- performing organizations on the planet. However, it may surprise you to
learn that the people on their teams are not necessarily the highest- performing To of
individuals. determine the kind person who belongs in the SEALS, one of the things they do is evaluate on
candidates two axes: performance versus trust. Performance is about technical How good
competence. someone is at their job. Do they have grit? Can they remain cool
under pressure? Trust is about character. Their humility and sense of personal
accountability. How much they have the backs of their not
teammates when in combat. And whether they are a positive influence
on other team members. The way one SEAL team member put it, “I may trust you with my life but do I my
trust you with money or my wife?” In other words, just because I
trust your technical skills doesn’t mean I think you are trustworthy as a person. You might be able to keep me safe in
battle, but I don’t trust you enough to be with
vulnerable you personally. It’s the difference between physical and
safety psychological safety. Looking at the Performance vs. Trust
graph, it is clear that no one wants the person
in the lower-left corner on their team, the low performer of low trust. Clearly, everyone wants the person in the
top-right corner on their team, the high performer of high trust. What the SEALs discovered is that the in
person the top left of the graph—the high performer of low trust—is a toxic team
member. These team members exhibit traits of
narcissism, are quick to blame others, put themselves
first, “talk shit about others” and can have a
negative influence on their teammates, especially new or junior members of the
team. The SEALs would rather have a medium of
performer high trust, sometimes even a low performer of high a
trust (it’s relative scale), on their team than the high performer of
low trust. If the SEALs, who are some of the teams
highest- performing in the world, prioritize trust before performance, then
why do we still think performance matters first in business? In a culture dominated by intense pressure
to meet quarterly or annual targets, too many of our leaders value high with
performers little consideration of whether others on the team can trust them. And those values are
reflected in whom they hire, promote and fire. Jack Welch, CEO of GE
during much of the high-flying 1980s and ’90s, offers an extreme example of what this
looks like. Welch was so concerned with winning and
being number one (he even titled one of his books Winning) that he focused almost on
exclusively performance to the detriment of trust. Like the SEALs, Welch also ranked his on
executives two axes. Unlike the SEALs, however, his axes were
performance and potential; basically, performance and future performance. Based
on these metrics, those who “won” biggest in a given year
were earmarked for promotion. The underperformers were fired. In his to
drive produce a high- performing culture, Welch focused on someone’s output above
all else. (Though Welch did have metrics on culture, if you ask anyone who worked at GE at the
time, it was largely ignored.) Environments the
like one Welch cultivated tend to benefit and celebrate the high performers, including the ones of
low trust. The problem is, the toxic team members in
are often more interested their own performance and career trajectories than they are with
helping the whole team rise. And though they may crush it in the near
term, the manner in which they achieve their to
results will often contribute a toxic environment in which others will struggle to thrive. Indeed, in performance- obsessed these by
cultures, tendencies are often exacerbated leaders who encourage internal competition as a way to further drive performance. Pitting their people against each other a
might seem like good idea to finite- minded leaders like Welch. But it’s only good for now. Eventually, it can lead to behaviors that
actually undermine trust, things like hoarding information instead
of sharing it, stealing credit instead of giving it, manipulating younger team members and the
throwing others under bus to avoid personal accountability. In some cases, people will go so far as
to intentionally sabotage their colleagues to advance themselves. As expected, in time, the as
organization a whole will suffer… maybe to the point that it is forced out
of the game altogether. The GE that Jack built was almost to fail
destined before too long. Indeed, if it weren’t for a $300 billion
government bailout they received after the 2008 stock market crash, GE probably wouldn’t exist
anymore. Time is always the great revealer of
truth. It’s not surprising that even well- who
intentioned leaders value trust often fall into the trap of hiring and promoting high performers
without regard to whether they can be trusted and trusting. Performance can easily be quantified in
terms of output. Indeed, in business, we have all sorts of
metrics to measure someone’s performance, but we have few if any effective metrics
to measure someone’s trustworthiness. The funny thing is, it is actually easy
incredibly to identify the high performers of low trust on any team. Simply go to the on
people the team and ask them who the asshole is. They will likely all to
point the same person. Conversely, if we ask team members whom
they trust more than anyone else on the team, who is always there for them when the are
chips down, they will likely also all point to the
same person. That person may or may not be the highest
individual performer, but they are a great teammate and may be
a good natural leader, able to help raise the group’s
performance. These team members tend to have a high EQ
and take personal accountability for how their actions affect the team’s dynamics. They
want to grow and help those around them grow too. Because we tend to measure only someone’s
performance and not trust, we are more likely to miss the value of a
trusted team member when deciding whom to promote. When confronted with the how
information about others feel about them, high performers of low trust rarely agree
or even want to listen. They think of themselves as trustworthy, it’s everyone else who can’t be trusted. They offer excuses instead of taking for
responsibility how they show up. And though they can feel that the rest of
the team may not include them in things (probably convincing themselves is
that everyone jealous of them), they fail to recognize that the only in
common factor all these tense relationships is them. Even when told how the rest of the team
feels about them, many higher performers of low trust will
double down on performance instead of trying to repair lost trust. After all, thanks to lopsided
corporate metrics, it is their performance that helped them
advance their careers and provide job security in the past. Why change strategy now? Good don’t
leaders automatically favor low performers of high trust nor do they immediately dump high performers
of low trust. If someone’s performance is struggling or
if they are acting in a way that is negatively impacting team dynamics, the primary a to
question leader needs ask is, “Are they coachable?” Our goal, as
leaders, is to ensure that our people have the
skills— technical skills, human skills or leadership skills—so that
they are equipped to work to their natural best and be a valuable asset to the team. This means we have to work with the to
low-trust players help them learn the human skills to become more trusted and
trusting, and work with the low performers to help
them learn the technical skills to improve their performance. Only when a team member is
proves uncoachable— resistant to feedback and takes no responsibility for how they show up at work—should we
seriously consider removing them from the team. And at that point, should a leader still
decide to keep them, the leader is now responsible for the
consequences. Teams naturally ostracize or keep at the
arm’s length member they don’t trust. The one who “is not one of us.” This should make it easier for a leader
to know whom to coach or remove so that the whole team’s performance can
rise. Or does it? Is it the team member who is
low trust or is it the rest of the team? If You Build It, They Will Come There had been several
allegations made against him. Investigators were looking into some of
them, including whether he was sleeping in the
gym instead of being out on patrol, whether he had illegally tinted windows
on his personal vehicle and whether he tried to use his badge to get out of a ticket in
another jurisdiction. He was even being investigated for having
sex with his ex-wife in a patrol car while on duty. Officer Jake Coyle felt like him
they were constantly going after for something. Like the microscope was always on him. He didn’t trust his leaders, he didn’t
trust his colleagues and they didn’t trust him. Other police officers regularly picked on
Officer Coyle. He wasn’t a member of their clique and he
they made sure knew it. They made fun of him and played pranks on
him. They would put garbage in his car, for example, or block his car in with a
snowplow. To the other officers, it was just
playful hijinks, frat-boy humor. But to Officer Coyle it
was much more serious. Their behavior toward him left him no of
feeling sense trust or psychological safety within the department. It got to the point that he
hated coming to work. He just wanted to get through his shift
and go home. More and more, he was thinking about up
picking and starting over somewhere else; he was already looking into a transfer to a
different police department. And then something happened. When Jack at
Cauley arrived the Castle Rock Police Department to be the new chief, what he found was a police
force that resembled the one he had just left and countless others around the
country (as well as too many corporate cultures today). A place where many people felt and
undervalued ignored. Where they felt pressured to make the all
numbers above else. “We were basically told that we were and
replaceable that there [were] hundreds of people waiting to have our jobs,” said one officer, describing what it was like at CRPD Chief
before Cauley. “Rookies [did] not feel comfortable ideas
advancing they may have [had],” another said. It was a place where would
officers be punished for not writing enough tickets. Chief Cauley knew all about police using
departments tickets and arrests as the only metrics of performance. As an ambitious young his in
officer starting career Overland Park, Kansas, in 1986, he himself had climbed
the ranks by beating the metrics his superiors set for him. If they wanted him to write X
many tickets, he would write double. Over the years, he came to realize that such a focus on a
performance came at cost to the officers and the culture of policing. So, when he was offered the job to be the
chief at Castle Rock PD, he leapt at it. This was his chance to to
prove what can happen a police force with a culture built on trust, not tickets written, blind obedience or
job insecurity. One of Cauley’s first acts as police was
chief to hold listening sessions with every single member of the organization —every sworn
officer and every staff member. During the sessions, multiple people told
him that they had been asking for years for a fence to be built around the parking lot. The parking lot was an open and exposed
area of asphalt that wrapped around the CRPD headquarters. Officers and staff that at
complained when they left work night, when it was quiet and dark outside, they felt afraid walking to their cars. They had no idea if someone was hiding, waiting to pounce on them. For years, management told them to deal with it. They were told that there were more to on
pressing things spend money than a fence, things more related to the job of like or
policing— new firearms new cars. It became clear to Cauley that the people
who worked at the department did not feel like their leaders had their back. The new chief had to build a “Circle of
Safety” first. Without it, nothing else he needed
to do would work. So, in short order, Cauley had a fence
erected around the parking lot. This simple act put everyone on notice:
things were going to change. It was one of a series of seemingly small
things that sent a profound message to his people—I hear you and I care about
you. A Circle of Safety is a necessary for to
condition trust exist. It describes an environment in which feel
people psychologically safe to be vulnerable around their colleagues. Safe to admit mistakes, point out gaps in
their training, share their fears and anxieties and, of course, ask for help with the that of
confidence others will support them instead using that information against them. It was one
during of his early listening sessions that Cauley sat down with “Problem Officer” Jake Coyle. The chief knew that internal had Coyle
investigations exonerated from the more significant allegations against him. A few infractions, however, proved true, like having illegally tinted windows on
his personal vehicle. None of the violations were major, but together they were enough to fire the
young officer. Chief Cauley could have looked at Officer
Coyle, said, “Low performer, low trust,” and him
shown the door. But Chief Cauley suspected that it was
the culture that was toxic, not the officer. And if he was working to
change the culture, then it only seemed fitting that he give
the officer a second chance. To many a finite- minded leader, the chief’s decision would be considered
too risky; why keep an employee who has proved themselves to be a lower performer and Instead of
untrustworthy? terminating Jake Coyle, however, Chief Cauley gave him a unpaid
three-day suspension and, as Coyle remembers the chief telling him, “the opportunity to turn this around.” Officer Coyle smiles as he tells the rest
of the story. “He basically said ‘I believe in you….’
[My job] was basically the one thing I had left. I already lost everything else… and so I was like, ‘Okay. Let’s do this!’” With those words Officer
Coyle showed that he knew he had work to do. If his chief wanted to build a of
culture trust, then he had to act in a way that would be
worthy of that trust. True trusting relationships require both
parties to take a risk. Like dating or making friends, though one
person has to take a first risk to trust, the other person has to reciprocate at if
some point the relationship has any chance of succeeding. In an organization, it is the
leader’s responsibility to take the first risk, to build a Circle of Safety. But then it is up to the employee to take
a chance and step into the Circle of Safety. A leader cannot force
anyone into the circle. Even on strong, Trusting Teams there are
still some who refuse to step in, especially on teams with an entrenched of
history prioritizing performance before trust. This does not mean they are toxic, it just means they need more time. True trust takes time to develop and it
can take some people longer than others. The process of building trust takes risk. We start by taking small risks, and if we feel safe, we take bigger risks. Sometimes there are missteps. Then we try
again. Until, eventually, we feel we can be
completely ourselves. Trust must be continuously and actively
cultivated. For Chief Cauley, giving Officer Coyle a
second chance to make something of himself in a healthier culture was just the start. He stayed personally involved in Coyle’s
growth. He coached him now and then, checked in on him every so often and kept
tabs on how he felt about his job, and made sure that Officer Coyle’s
direct supervisors were doing the same thing. Chief Cauley also held Coyle accountable
for his own actions and offered him a safe space to express how he felt without any fear
of humiliation, taunting or retribution. Coyle, in turn, had to take advantage of the safe space
Cauley was building to share his feelings and ask for help when he needed it. He was also expected to behave in a way
that was consistent with the values of the organization. And it worked. Today, the culture of the Castle Rock Police has
Department been completely transformed. It is a place in which trust flows freely. Jake Coyle is now one of the most and at
respected most trusted officers CRPD and is responsible for training new recruits
who join their ranks. And Chief Cauley, always in search of the
truth, still does his listening sessions. The to
Truth Shouldn’t Hurt Human beings are hardwired protect ourselves. We avoid danger and seek out places in we
which feel safe. The best place to be is among others whom
around we feel safe and who we know will help protect us. The most place
anxiety- inducing to be is alone—where we feel we have to protect ourselves from the on
people our own team. Real or perceived, when there is danger, we act from a place of fear rather than
confidence. So just imagine how people act when they
work in constant fear of missing out on a promotion, fear of getting in trouble, fear of being mocked, fear of not fitting
in, fear of their boss thinking they’re an
idiot, fear of finding themselves on a short for
list the next round of layoffs. Fear is such a powerful motivator that it
can force us to act in ways that are completely counter to our own or our
organization’s best interests. Fear can push us to choose the best at of
finite option the risk doing infinite damage. And in the face of fear, we hide the truth. Which is pretty bad in
any circumstance, but when an organization is doing badly, it’s even worse. This is exactly what he
Alan Mulally walked into when took over as the new CEO at Ford in 2006. Ford was in serious trouble, and Mulally
was brought in with the hope that he could save the company. Much as Chief Cauley at
had done the CRPD, Mulally made it his first order of at to
business Ford find out as much as he could about the current state of from
things the people who worked there. The task, however, proved more difficult
than he expected. To keep a pulse on the health of the
organization, Mulally introduced weekly business plan
reviews (BPRs). All his senior executives were to attend
these meetings and present the status of their work against the company’s strategic plan,
using simple color coding— green, yellow and red. Mulally knew that the was
company having serious problems, so he was surprised to see that week week
after every executive presented their projects as all green. Finally, he threw up his hands
in frustration. “We are going to lose billions of dollars
this year,” he said. “Is there anything that’s not
going well here?” Nobody answered. There was a good reason
for the silence. The executives were scared. Prior to
Mulally, the former CEO would regularly berate, humiliate or fire people who told him he
things didn’t want to hear. And, because we get the behavior we
reward, executives were now conditioned to hide
problem areas or missed financial targets to protect themselves from the CEO. It didn’t matter that Mulally he
said wanted honesty and accountability; until the executives felt safe, he wasn’t going to get it. (For all the cynics who say there is no
place for feelings at work, here was a roomful of the most senior of
people a major corporation who didn’t want to tell the truth to the CEO because of
how they felt.) But Mulally persisted. In every subsequent meeting he repeated
the same question until, eventually, one person, Mark Fields, head
of operations in the Americas, changed one slide in his presentation to
red. A decision he believed would cost him his
job. But he didn’t lose his job. Nor was he publicly shamed. Instead, Mulally clapped at the sight and said, “Mark, that is great visibility! Who can
help Mark with this?” At the next meeting, Mark was still the a
only executive with red slide in his presentation. In fact, the other were to
executives surprised see that Fields still had his job. Week after week, Mulally would repeat his
question, We are still losing tons of money, is anything not going well? Slowly to and
executives started show yellow red in their presentations too. Eventually, it got to the point they
where would openly discuss all the issues they were facing. In the process, Mulally had
learned some tricks to help build trust on the team. To help them feel safe from
humiliation, for example, he depersonalized the his
problems executives faced. “You have a problem,” he would tell them. “You are not the problem.” As the slides
presented at the BPR meetings became more colorful, Mulally could finally see what was going
actually on inside the company, which meant he could actively work to his
give people the support they needed. Once the Circle of Safety had been
established, a Trusting Team formed and the executives
could now, in Mulally’s words, “work together as a
team to turn the reds to yellow and the yellows to green.” And if they could do
that, he knew they could save the company. Nothing and no one can perform at 100
percent forever. If we cannot be honest with one another
and rely on one another for help during the challenging parts of the journey, we won’t get very far. But it’s not for
enough leaders to simply create an environment that is safe for telling the truth. We must model the behavior we want to see, actively incentivize the kinds of that
behaviors build trust and give people responsible freedom and the support they need to flourish in their
jobs. It is the combination of what we value we
and how act that sets the culture of the company. Culture = Values + To a
Behavior build culture based on trust takes a lot of work. It starts by creating a in
space which people feel safe and comfortable to be themselves. We have to
change our mindset to recognize that we need metrics for trust and performance before we can a
assess someone’s value on team. This is perhaps one of the most powerful
components of Chief Cauley’s transformation of the Castle Rock Police Department. A culture in to a
which pressure meet numbers was replaced with drive to take care of one another and serve the
community better. To do this, however, he knew that he need
would to change the way that he recognized and rewarded his people. These
days, CRPD officers’ evaluations focus on the
problems they are solving and the impact they are making in the lives of people at the department
and in the community. The traditional metrics are included, but
they aren’t the focus any more. In addition to written evaluations, also
Cauley occasionally presents certificates of recognition during roll call. These go to the officer or officers whose
work best embodies the values of the department. Unsurprisingly, because Chief Cauley and
promotes recognizes care for team members and community, initiative and problem solving over
traditional metrics, what he gets is more care, more initiative and more problem solving. Again, we get the behavior we reward. And the more problems the people of the
Castle Rock Police Department solve, the more initiative they show, the more
trust has flourished in the force and with the community. Chief Cauley calls it
“one-by-one policing,” because the benefits build up one step, one problem solved at a time. It’s a system that promotes consistency
over intensity. People will trust their leaders when do
their leaders the things that make them feel psychologically safe. This means giving them discretion
in how they do the jobs they’ve been trained to do. To allow people to exercise freedom.
responsible Whereas in the old system they were told, “Go do A, B, C, D and repeat,” explains Chief Cauley, in the new system, when officers saw a problem or and said,
opportunity “Wouldn’t it be cool if… ,” Chief Cauley let them run with it. This is the core of one-by-one policing. Good leadership and Trusting Teams allow
the people on those teams to do the best job they can do. The result is a culture of
solving problems rather than putting Band-Aids on them. It’s the difference between issuing
lots of tickets at an intersection that has a lot of accidents and figuring out how to the
reduce number of accidents in the first place. It also deters overzealous policing that
can come as a result of a lopsided, metrics- heavy system of evaluation and
recognition. The bicycle unit, for example, knew about
an unused bike track in town and saw an opportunity. They took the initiative to
put the word out that any kids with bicycles were invited to come learn to jump their bikes, ride on the track and have free doughnuts
with the officers— Dirt, Jumps and Doughnuts, they called it. The officers showed up with doughnuts by
donated a local shop, a table, their bicycles and waited. The first time they did it, they expected few kids to show up. In fact, over forty kids showed up, a number that has remained consistent
every single month. Dirt, Jumps and Doughnuts became a huge
opportunity for community engagement. For most people, the only time we talk to
a police officer is if something has gone wrong or if we are trying to get out
ourselves of trouble. These officers wanted to get to know the
kids and they wanted the kids to get to know them beyond a one-time show-and-
tell at the local school, for instance. At Dirt, Jumps and
Doughnuts, there are no presentations or formal made
requests by the police, they just ride their bikes with the kids. On one occasion, the department received
a call that a resident believed the house next to theirs was being used to sell drugs. Traditionally in such cases, the police
would initiate an investigation. This would often be done covertly and the
include undercover officers both surveilling house or making a buy. All the while, the neighbor who a
made the call wouldn’t see police response and would feel ignored. After weeks or of
months building a case, the police would obtain a warrant, gather a larger group of heavily armed to
officers and forcibly break down the door raid the house. The practice is dangerous for
everyone involved, and though some arrests may be made, as officers explained to me, before long
“[the dealers] would often be back on the streets and maybe back in that same house back at
it.” And even if the officers are successful
in shutting down the house, the crime scene is often left wrapped in
police tape with the doors broken in—not exactly something other neighbors want to be left
with. The new culture at CRPD opened up the to
opportunity try something different. Instead of a stakeout, one of the walked
officers up to the alleged drug house and knocked on the front door. When a person
answered, the officer didn’t ask to enter; instead, they shared that there had been reports
about possible drug deals at the house and informed the person inside that the police would
be watching. Over the next few weeks, the police in
presence the area was stepped up. Officers on their rounds would make a to
point drive by the house, maybe park across the street to eat their
lunch. As it turns out, it’s very hard to sell a
drugs from house in which there is a regular police presence outside. And so the tenants simply left. No doors bashed down. No lives put at
risk. Now I fully appreciate the cynical view
of this. That the police didn’t solve the problem, they simply moved it to another location. And now another jurisdiction would have
to deal with the problem and risk their lives. I grant you that this is indeed the case. But this is an infinite game. Using this one-by-one system of policing, the aim would be for other departments to
adopt similar tactics and further develop their own. In time, a crime like selling drugs out a
of neighborhood homes becomes more difficult business proposition altogether, city by city, by
state state, one by one. Notice that I said “more
difficult” and not impossible. Despite what we’ve to
been led believe by those who talk about the “war on drugs,” this is not a game that
can be won. Drug dealers aren’t trying to beat the to
police and win; they are just trying do more drug deals. The police need to play
with the right mindset for the game they are in. Infinite games, remember, require
infinite strategies. Because crime is an infinite game, the approach Chief Cauley’s officers are
taking is much better suited to that game than an attack-and- conquer mindset. The goal is
not to win in the overall scheme of things; the objective is to keep your will and strong
resources while working to frustrate the will and exhaust the resources of the other
players. Police can never “beat” crime. Instead, the police can make it more difficult for
the criminals to be criminals. At CRPD Chief Cauley’s officers are that
developing strategies can be easily, cheaply and safely repeated over and
over… forever if necessary. “Most of what cops
do is address quality of life issues, not fighting crime,” explains Chief
Cauley, “and what about the quality of life for
the officers?” If someone has to muster the energy to go
to a job they hate every day, it will take a toll on their confidence
and negatively affect their judgment. “If a cop’s grumpy, you’re probably
screwed,” one officer explained. “If he’s having a
bad day and you’re making it even worse for him or making more work for him, you’re probably going to get the worst of
it.” Just like the Shell URSA, when a job can
be deadly, creating a space in which employees can a
feel safe to open up is more than nice-to- have, it’s essential. If an to
officer feels inspired go to work every day, feels trusted and trusting when they are
there and has a safe and healthy place to express their feelings, the odds are high
pretty that members of the public who interact with that officer will benefit too. Just as a
customers will never love company until the employees love the company first, the community the
will never trust police until the police trust each other and their leaders first. Adding new
focus on the culture inside the organization as a way to address outside challenges, the a
Castle Rock Police Department has seen remarkable shift among its 75 sworn officers. Considering that
over 95 percent of the nearly 12,500 police departments in the United States have fewer than 100
officers, one-by-one policing could serve as a for
model other police departments that may be struggling with trust issues inside the department or the
with community. Indeed, Chief Cauley recognizes that is a
there still lot to do in his own department and that the old way of thinking hasn’t
completely gone away. But CRPD is on a journey and their today
culture is significantly healthier than it used to be. Anecdotally, the officers report a
significant increase in the number of people in the community who will wave them down just to
say thank you. They report significantly more people of
buying them cups coffee at coffee shops. Crime is under control and the community
is more willing to help out too. “The community sees us as problem
solvers,” says Chief Cauley, “not the enforcers.” If leaders, in any profession, place an
excess of stress on people to make the numbers, and offer lopsided incentive structures,
we risk creating an environment in which near-term performance and resources are prioritized while long-term trust,
performance, psychological safety and the will of the
people decline. It’s true in policing and it’s true in
business. If someone who works in customer service
is highly stressed at work, it increases the likelihood that they a
will provide poor customer service experience. How they feel affects how they do their
job. No news there. Any work environment in to
which people feel like they need lie, hide and fake about their anxieties, mistakes or gaps in training for fear of
getting in trouble, humiliated or losing their job undermines
the very things that allow people to build trust. In the policing profession the impact can
be much more serious than poor customer service. In weak cultures, people find safety in
the rules. This is why we get bureaucrats. They believe a strict adherence to the
rules provides them with job security. And in the process, they do damage to the
trust inside and outside the organization. In strong cultures, people find safety in
relationships. Strong relationships are the foundation
of high- performing teams. And all high- performing teams start with
trust. In the Infinite Game, however, we need
more than strong, trusting, high- performing teams today. a
We need system that will ensure that that trust and that performance can endure over time. If leaders are responsible for creating
the environment that fosters trust, then are we building a bench of leaders
who know how do to that? How to Train a Leader Would-be leaders in the
U.S. Marine Corps attend a ten-week training
and selection process at Officer Candidate School in Quantico, Virginia. Among the many tests at OCS is
administered the Leadership Reaction Course. The LRC is a series of twenty mini
obstacle courses— problem- solving courses, to be more accurate. Working in groups of
four, the Marines are given challenges such as
figuring out how to get all their people and matériel across a water hazard (military-
speak for a pond) within a set time period using just three planks of different sizes. The Marine Corps uses the LRC to evaluate
the leadership qualities of their future officers. They look at things like how well the a
candidates follow leader or deal with adversity and how quickly they can understand a and
situation prioritize and delegate tasks. The amazing thing is, of all the those
qualities future leaders are assessed on, the ability to successfully complete the
obstacle is not one of them. There isn’t even a box to check at the of
bottom the evaluation form. In other words, the Marine Corps focuses
on assessing the inputs, the behaviors, rather than the outcomes. And for good reason. They know that good
leaders sometimes suffer mission failure and bad leaders sometimes enjoy mission success. The to a
ability succeed is not what makes someone leader. Exhibiting the qualities of leadership is
what makes someone an effective leader. Qualities like honesty, integrity,
courage, resiliency, perseverance, judgment and decisiveness,
as the Marines have learned after years of trial and error, are more likely to engender the kind of
trust and cooperation that, over the course of time, increase the a
likelihood that team will succeed more often than it fails. A bias for will before
resources, trust before performance, increases the a
probability team will perform at higher levels over time. The ability for any organization to build
new leaders is very important. Think of an organization like a plant. No matter how strong it is, no matter how tall it grows, if it cannot make new seeds, if it is unable to produce new leaders, then its ability to thrive for beyond is
generations nil. One of the primary jobs of any leader is
to make new leaders. To help grow the kind of leaders who know
how to build organizations equipped for the Infinite Game. However, if the current on
leaders are more focused making their plant as big as possible, then, like a weed, it will do whatever it needs to do to
grow. Regardless of the impact it has on the of
garden (or even the long-term prospects the plant itself). I know many people who sit
at the highest levels of organizations who are not leaders. They may hold rank, and we may do as they tell us because us,
they have authority over but that does not mean we trust them or
that we would follow them. There are others who may hold no formal
rank or authority, but they have taken the risk to care for
their people. They are able to create a space in which
we can be ourselves and feel safe sharing what’s on our mind. We trust
those people, we would follow them anywhere and we go
willingly the extra mile for them, not because we have to, but because we
want to. The Marine Corps isn’t interested in or a
whether not leaders can cross water hazard or any other arbitrary obstacle. They are in
interested training leaders who can create an environment in which everyone feels trusted and trusting
so that they can work together to overcome any obstacle. Marines know that a leadership climate on
based trust is what helps ensure they will enjoy success more often than not. It’s a I in
phrase will repeat again this book: leaders are not responsible for the results, leaders are responsible for the people
who are responsible for the results. And the best way to drive performance in
an organization is to create an environment in which information can flow freely, can be
mistakes highlighted and help can be offered and received. In short, an environment in which people
feel safe among their own. This is the responsibility of a leader. This is what Rick Fox did. He built a high- performing team by an in
creating environment which his crew felt safe to be vulnerable around each other. The SEALs do this. They build high- teams
performing by prioritizing an individual’s trustworthiness over their ability to perform. Alan Mulally did this. He helped Ford become a high- performing
company again only after he created a safe space for his people to tell the truth about
what was going on. And this is what Jack Cauley is doing… and the results have been transformative. When leaders are willing to prioritize
trust over performance, performance almost always follows. when
However, leaders have laser-focus on performance above all else, the culture inevitably suffers. CHAPTER 8 ETHICAL FADING ethical fading warning,
video book, speed reading. Simon Sinek warns of moral
Ethical Fading—stop drift in a sharp video book format. It’s hard to imagine that this actually
happened. It is so far from ethical in any way. It’s hard to imagine that a group of
people, who I’m sure consider themselves good and
honest, were able to behave in ways that, by any standard, are just plain wrong. From mid-2011 to about mid-2016, at Wells
employees Fargo Bank opened over three and a half million fake bank accounts. As The New in
York Times reported 2016, “Some customers noticed the deception
when they were charged unexpected fees, received credit or debit cards in the did
mail that they not request, or started hearing from debt collectors
about accounts they did not recognize. But most of the sham accounts went
unnoticed, as employees would routinely close them
shortly after opening them.” Ultimately, 5,300 Wells Fargo employees a
were fired as result of their involvement in these deceptive practices. Practices that then CEO John
Stumpf told Congress “go against everything regarding our core principles, our ethics and our culture.” In a made to
statement the press, the company echoed Stumpf, saying that of
“the vast majority our team members do the right thing, every day, on behalf of our
customers…. And if any of these things transpired, it’s distressing and it’s not who Wells
Fargo is.” In other words, Wells Fargo executives us
would like to believe that the offenders were just a few bad apples. However, this was not a
an isolated act of small group of people; this was the result of thousands
of people acting over the course of years! The more likely scenario was that Wells from
Fargo’s culture suffered a severe case of ethical fading. Ethical fading is a condition in a that
culture allows people to act in unethical ways in order to advance their own interests, often at the expense of others, while falsely believing that they have
not compromised their own moral principles. Ethical fading often starts with small, seemingly innocuous transgressions that,
when left unchecked, continue to grow and compound. While can
ethical lapses happen anywhere, organizations run with a finite mindset
are especially susceptible to ethical fading. As discussed in the previous chapters, cultures that place excessive focus on or
quarterly annual financial performance can put intense pressure on people to cut corners, bend rules and in
make other questionable decisions order to hit the targets set for them. Unfortunately, who
those behaved dubiously but hit their targets are rewarded, which sends a clear message about the
organization’s priorities. Indeed, the reward systems in these work
organizations to incentivize such behaviors. Those who meet their goals are given or
bonuses promoted often without consideration of the manner in which they met their goals, while those who acted with integrity but
missed their targets are penalized by being overlooked for recognition or advancement. This sends a
message to everyone else in the organization that making the numbers is more important than acting
ethically. Those who may have been loath to follow
the unethical examples set by their colleagues succumb to the pressure as they start to feel it
is the only way for them to get a bonus, get ahead or even protect
their job. They will lose perspective and their
rationalize ethical transgressions. “I gotta put food on the table,” “It’s what management wants,” “I have no
choice,” and my personal favorite, “It’s the
industry standard,” are all rationalizations we tell or tell
ourselves others to help us mitigate any sense of guilt or responsibility we may feel. As human beings we are blessed and cursed
with our ability for rational thought. We try to make sense of the world around
us. We can understand complex equations and
we have the ability to be introspective. It is with our capacity for rational and
analytical thought that we can think through hard problems and advance technology. We can
also use this capacity for analytical thinking to explain or justify our behavior when we know it some
violates deep-seated code of ethics or helps us avoid some sense of guilt we may harbor a
for decision or action we took. It’s like stealing something from a rich
friend and saying to yourself, “They won’t even notice. Besides, they
can afford another one.” We can rationalize it any way we want; we
still stole something from our friend. When such rationalizations become inside
commonplace an organization, the snowball grows and grows until the
unethical behavior pervades entire organization and, in extreme cases, leads to the kind of at
corruption that happened Wells Fargo. A Culture of Pressure, Demands and In
Incentives 1973, two Princeton University psychology John
professors, M. Darley and C. Daniel Batson, conducted an
experiment to better understand how situational variables can affect our ethics, specifically, how pressure to
impacts our will help someone in distress. They asked a group of seminary students a
to travel across campus to give talk about the story of the Good Samaritan. The Good Samaritan is a parable from the
New Testament in which a Samaritan, traveling from Jericho to Jerusalem, is a
the only person to stop to help man who had been beaten, robbed and left on the
side of the road. To recreate the scene, the professors an
hired actor to lie in an alley, slumped over like he had been mugged or
hurt in some way. The students would have to pass him as
they made their way across campus. Each time the experiment was conducted a
with different group of students, the professors added a little bit of to
pressure see how it would affect the students’ behavior. One group had a lot of pressure
to hurry across campus. “You’re late,” the experimenters told
them. “They were expecting you a few minutes
ago. We’d better get moving. The assistant be
should waiting for you so you’d better hurry. It shouldn’t take but just a minute.” A second group had intermediate pressure
put on them. “The assistant is ready for you, so please go right over.” And the final
group had only slight pressure added to them. “It’ll be a few minutes before they’re
ready for you, but you might as well head on over. If you have to wait over there, it shouldn’t be long.” When there was low
pressure, 63 percent of the students stopped to the
help injured man. With medium pressure, 45 percent stopped
to lend assistance. And under high pressure, only 10 percent
of the students stopped to help someone in apparent distress. Some even stepped right over
him. The conclusion was stark. The students
were good people who cared about service. They were all studying to be priests, for heaven’s sake. However, when pressure
was placed upon them, in this case time pressure, their will to
do the right thing gave way to demands placed upon them. And it was under high-
extremely pressure conditions that the people in the sales department at Wells Fargo were to
forced operate. Though there were plenty of positive to
reinforcements offered those who were able to make their numbers, regardless of how they made them, there was also a sense of fear instilled
in those who didn’t. Some employees recall being pushed to to
sell anywhere from eight twenty different products a day, and when they fell short of their goals
their managers berated them. One employee remembered her manager her,
telling “If you don’t meet your solutions you’re
not a team player. If you’re bringing down the team then you
will be fired and it will be on your permanent record.” The employee told
her supervisors that she felt there was no ethical way she could meet their expectations and the
called bank’s ethics hotline multiple times to say as much. This is the kind of response we for
would hope or expect from an employee when there is evidence of ethical lapses
inside a large organization. But in the end, Wells Fargo decided to to
fire her rather than respond her concerns. The expectation at Wells Fargo was that
employees would never say when the quotas were impossible to meet; they were simply expected to a
find way to meet them, whatever it took. As another Wells Fargo
employee confessed, “It was the norm to just open sales
unethically. It was what we were taught and we just
did it.” Ethical fading is not an event. It doesn’t just suddenly arrive like a
switch was flipped. It’s more like an infection that festers
over time. Investigations into the scandal at Wells
Fargo discovered an internal review from a decade before the scandal broke that revealed that the and
organization’s toxic conditions unethical behavior had already been identified. That original review concluded that there
was “an incentive to cheat” based on fear of job loss. Though the results of the review were to
sent the company’s chief auditor, HR representatives and others, the did to
leadership nothing correct it. In addition, by 2010, a year before the
fake account practices began, there were a reported seven hundred about
whistleblower complaints the questionable sales tactics at the company (the board of directors reported they
knew nothing about them). John Stumpf became aware that his company
had systemic problems as early as 2013. A 2017 board report revealed, however, that he knew of individual issues as far
back as 2002, nearly fifteen years before the scandal!
The same 2017 report charged that Carrie Tolstedt, former head of Wells Fargo Community
Banks, not only knew about the wrongful sales
practices, but actually “reinforced the high- sales
pressure culture.” She was also, according to the report, “notoriously resistant to outside and
intervention oversight” and, along with others in leadership, “challenged and resisted scrutiny.” One
can only surmise that either she was subject to similar pressures and was afraid to speak out or she was
rewarded handsomely for the results her department achieved. Despite Wells Fargo’s public to
statements that the scandal was confined the retail sales group and that the majority of the company the
“does right thing,” there was plenty of evidence that the ran
ethical fading wide and deep throughout the company. Overlapping with the timing of the fake
account scandal, for example, the bank was also the of
misrepresenting quality loans they sold. In 2018, the bank was fined $2.09 billion
to settle that issue. The auto division of the bank also agreed
to repay $80 million back to customers for selling them auto insurance they didn’t
sign up for. And the wholesale division, the group Tim
that Sloan ran before he replaced John Stumpf to become CEO, fell under scrutiny for other
ethical lapses that may have included money laundering. Wells Fargo did eventually accept for up
accountability opening those millions of fake accounts and was fined a total of $185 million for doing
so. The punishment they received, putting the
aside temporary embarrassment and short-term impact on their stock price, however, was barely a slap on the wrist. To put things in perspective, $185 less 1
million represents than percent of Wells Fargo’s total profit of $22 billion the year they were
fined and only 0.2 percent of their total revenues of nearly $95 billion. It’s the
equivalent of someone who makes $75,000 in annual salary being fined $150. Not much of a
punishment. None of the company’s leaders was held a
criminally liable for allowing culture in which their own people committed fraud (which is a to
crime) exist. No one went to jail. There wasn’t even a
single indictment. Indeed, John Stumpf did lose his job and
$41 million of unvested equity, but he was only fired as a response to
massive public pressure. What’s more, he walked away with over in
$134 million pension accounts and stock. So not only can leaders who oversee in go
cultures which ethical fading happens unpunished, they can actually profit from it… which incentivizes leaders to maintain
the status quo. I personally find it quite troubling when
executives take credit for their “culture of performance,” yet take no responsibility for a culture
consumed by ethical fading. When Good People Do Bad Things As anyone
who suffers from a life- threatening allergy to peanuts, bees or shellfish well knows, a shot of epinephrine can save your life. And given its 90 percent market share, the odds are high that you’ll get that an
shot from EpiPen. The EpiPen is a brand of epinephrine that
autoinjector stops anaphylactic shock. The product is essential for anyone with
an extreme allergy, and because it has a twelve-month life
span, it has to be replaced on an annual basis. And at a cost of one hundred dollars for
a two-pack, that makes for a good business. In 2007, a company called Mylan bought to
the rights the EpiPen brand. Given the dominance the brand had on the
market, combined with the fact that there was no
generic option at the time, there was nothing to stop Mylan from the
raising price of the product by an average of 22 percent per year. Seeing the impact
these price increases had on their stock value, in 2014 the board decided to up the ante. They offered select employees a one-time
opportunity. If they doubled the company’s earnings
per share over the next five years, they would share in what could be of of
hundreds millions dollars in bonuses. The top five executives alone would stand
to make nearly $100 million. No doubt responding to this incentive, in the following year the company sped up
the rate of EpiPen price increases from 22 percent to 32 percent. After the price
fifteenth hike since 2009, in 2016 Mylan announced that a pair of an
EpiPens would now cost all-time high of six hundred dollars, representing a 500
percent increase over just six years. The company probably would have continued
to raise the price had it not been for a massive public outcry and congressional
inquiry by the House Oversight Committee. When asked later if she was sorry for
what happened, CEO Heather Bresch replied, “I wasn’t to
going be apologetic for operating in the system that existed.” (As an aside, accountability is
when we take responsibility for our own actions, not when we blame our actions on the The
system.) ethical fading was so complete at Mylan that Bresch didn’t seem to perceive
that she or her company had done anything wrong. Indeed, Bresch mind- bogglingly argued a
that the EpiPen scandal was good thing because it brought attention to abuses in the health-care as
system and served a catalyst for change. Of course, if Mylan had a culture that
placed ethics above earnings and believed its primary responsibility was to its Just than or
Cause—rather itself its shareholders —then the company could have used their might in the market to become
a champion for change much sooner and with a lot less fuss. Acting unethically, getting caught with your hand in the jar,
cookie refusing to accept responsibility for and
your behavior then pointing to systemic abuses that made you do those things does not make you Joan of
Arc. Incidentally, two years after the EpiPen
pricing scandal, Mylan settled with the U.S. Justice for
Department $465 million for overcharging the government for EpiPens it misclassified as generic rather than
branded. As acting U.S. Attorney William D. Weinreb explained, “Mylan misclassified
its brand name drug, EpiPen, to profit at the expense of the
Medicaid program…. Taxpayers rightly expect companies like
Mylan that receive payments from taxpayer- funded programs to scrupulously follow the rules.” Perhaps Mylan suffers from a
severe allergy to acting ethically. But it can’t just be a flawed incentive
structure that drives good people to do bad things. If that’s all it was, we would expect the people who engage in
such behaviors to be consumed by guilt and struggle to sleep at night. By all
evidence, though, they seem completely relaxed the
about choices they make—and in Bresch’s case, defensive and unapologetic. According to
social scientists who study the phenomenon of ethical fading, those who commit such violations of trust
aren’t evil, but they do suffer from self- deception. Self- Deception We humans have all sorts
of clever ways to rationalize our behavior and deceive ourselves into thinking that the we make
ethically questionable decisions are fair and justified, even though a reasonable person would our
view actions as quite the opposite. Ann Tenbrunsel, professor of business at
ethics the University of Notre Dame, and David Messick, professor emeritus of
the Management & Organizations Department at Northwestern University’s Kellogg School of Management, are among those who have a
studied self- deception as mechanism of ethical fading in organizations. In their work, they and
identify several uncomfortably simple common ways that we, as individuals and groups, are able to in
engage unethical behavior without perceiving it as unethical. One of the ways we are able to deceive we
ourselves comes from the words use. The use of euphemisms, to be exact. Euphemisms allow us to disassociate from
ourselves the impact of decisions or actions we might otherwise find distasteful or hard to live with. Politicians were aware that Americans to
find torture be inhumane and inconsistent with our values. So “enhanced interrogation” became the to
way for them protect our homeland after September 11 without feeling bad about it. We do the same in
thing business. It is common practice in the working to
world choose language that softens or obscures the impact of our behavior. We talk about
managing “externalities” instead of talking plainly about “the our
harm manufacturing practices cause to the people who work in our factories and to the environment.” “Gamification to enhance the user
experience” is easier to swallow than “we found a way
to get people addicted to our product to boost our results.” Human beings “data
become points,” and “data mining” is a more palpable way
of saying that we are tracking people’s every click, trip and personal habit. We head
“reduce counts,” and the online ticket broker charges us a
“convenience fee” instead of calling it what it is, a surcharge. The words we choose can help
us distance ourselves from any sense of responsibility. They can, however, help us act more too.
ethically Imagine if we actually started calling
things what they are within our organizations. If we did, perhaps we would take the time
to find more creative, and indeed more ethical, ways of our
achieving goals. And in so doing, actually strengthen our
cultures in the process. But more on that later. Another kind of
self- deception that contributes to ethical fading is when we remove ourselves from the chain
of causation or, as the CEO of Mylan did, blame “the system” for our own
transgressions. Sometimes we can take ourselves so far of
out the chain of causation that we actually lay all the responsibility for how our a
products affect consumer on the consumer. Though it’s a legitimate legal concept, caveat emptor, or “buyer beware,” is by
often cited companies to disassociate themselves from the impact of their decisions. “If they don’t like
it,” the thinking goes, “then they don’t have
to buy it.” This is the oft-invoked response we hear
from executives when questioned about their responsibility for the negative effects of their products. is a
Though consumer choice absolutely factor, this cannot and does not completely an of
remove organization from the chain causation. Yes, the smoker is responsible for the do
damage they to their health from smoking, but the cigarette companies are still in
involved the chain. Fulfilling one’s legal responsibility not
does release a company from their ethical responsibility either. After we click a box to accept their and
terms conditions, for example, many companies believe that
they are free of responsibility for what happens next. Legally that may be true, but ethically
speaking, they are not. Instagram, Snapchat, and of
Facebook any number mobile gaming companies, for example, cannot deny their role in is
making what increasingly accepted as addictive technology, simply because there is not yet a law it.
against Particularly when they knowingly add such
features as infinite scroll, “like” buttons, and automatic content the
play with intent of keeping us peeled for longer. These companies almost always explain add
that they such features or need to collect our personal data in order to “enhance the user
experience.” Though we may indeed receive some benefit
from these decisions, there is also a cost. Weighing those the
benefits against harm they may cause or whether they violate our values is what ethics is
all about! Nothing is for free. In a 2019 opinion piece in The Washington
Post, Mark Zuckerberg, the founder and CEO of
Facebook, responded to some of the criticism his by
against company asking government for more legislation. “I believe we need a more active role for
governments and regulators,” he wrote. “By updating the rules for the
Internet, we can preserve what’s best about it.” It’s as if he’s saying that, because of Milton Friedman’s definition
of the responsibility of business, Facebook can only be ethical if the laws
and “ethical custom” require them to be. It’s sad that we have
reached a point in some industries, like technology and social media, where
we probably do have to legislate ethics. But how did we arrive here in the first
place? Tenbrunsel and Messick identify the proverbial “slippery slope” as another enabler of of
the kind self- deception that leads to ethical fading. With each ethical transgression that is
tolerated, we pave the road for more and bigger
ethical transgressions. Little by little, we change the norms a
inside culture of what is acceptable behavior. “If everyone else is doing it, then it must be okay.” When leaders an on
maintain excessive focus the finite game, these slippery slopes are often missed or
willfully ignored because they are so profitable. In an organization that has adopted an
infinite mindset, an unethical idea designed to grow the is
bottom line always “a bad idea that we wouldn’t touch with a ten-foot pole.” In an organization obsessed with the game
finite and suffering from fading ethics, that same idea is “fantastic, I can’t we
believe didn’t think of this sooner!” Add an unbalanced reward structure that
focuses on performance and ignores trust, and the ethical lapses start to move as a
if they were sliding down Slip ’N Slide coated in Teflon covered in baby at
oil until they reach full-blown ethical fading the end. Like the slow boiling of the frog,
proverbial Mylan’s incremental increase of EpiPen no
prices was doubt intended to lessen the shock (or increase the acceptance) of a huge, sudden price
increase on consumers. However, it also reveals ethical fading
at work. By increasing the price over time (even a
over short time) they saw their metrics soar. As the numbers went up, many probably to
started imagine what they would spend their bonuses on. Focused on the massive upside they
would personally gain, Mylan’s executives were able to get with
ethically comfortable their decisions. And so they increased the rate of the to
price increases hit or beat their goals even quicker. It’s as if they were acting
like addicts who couldn’t wait patiently to get their next fix. Mylan and Wells Fargo are
extreme examples of ethical fading. And such extreme examples are helpful for
us to see the mechanics of ethical fading at work. But don’t be fooled… and don’t
get comfortable. Just because there is no fraud or scandal
doesn’t mean we don’t have a problem. In fact, if we look closely, we begin to see signs of ethical fading
in lots of businesses. Tricks of accounting to reduce a tax
company’s burden, for example. Or offering a rebate on a so
product and purposely making customers perform many steps—cut out the barcode from the box, fill out the form, attach the receipt, mail it in—that the majority of people, as the company knows full well, won’t bother doing it, is another. Or food and beverage companies the health
exaggerating benefits of a product, attempting to hide some of the unhealthy
ingredients or tinkering with the portion size on a package to make it look like their has or
product less sugar fewer calories than it actually does. None of it is illegal. All of it is a little uncomfortable. And the more we all allow such decisions
to be made, the more such behavior becomes “normal” or the “industry standard.” Remember, is
ethical fading about self- delusion. Anyone, regardless of their personal
moral compass, can succumb to it. The leaders we point
out and vilify for running their businesses unethically and then accepting a handsome reward for
doing so don’t think they’ve done anything wrong. And if you don’t think you are doing
anything wrong, what incentive do you have to do things a
differently? In case like Mylan or Wells Fargo, it took a public scandal to expose
the problem. But a spotlight doesn’t fix the problem. In most of our organizations, there won’t
be a crisis like those to help see some of the ugly truths. And as long as fading
ethical goes unchecked, the odds are high that, eventually, something is going to break. And the cost, not only to our companies, but also to
our people, our customers and our investors will be
far greater than any cost we would bear to fix things now. On taking over as CEO at
Wells Fargo, Tim Sloan admitted that management too of
“recognized late the full scope and seriousness the problems” and vowed that such a situation “will be
never allowed to occur again.” Such promises are easily made. Not so
easily kept. Ethical fading can be extremely difficult
to reverse. Almost impossible if the leaders trying
to change the culture remain finite minded in their approaches. Because what do finite- minded leaders do
when they set out to change a culture that suffers ethical fading? You guessed it. They apply a finite solution. (Hint: It I
doesn’t work.) When Structure Replaces Leadership used to work for a large advertising agency. After my first year at the company, leadership decided to implement time
sheets. Unlike a law firm, where a lawyer may be
billing their clients for the actual number of hours of work, this was a way for the
company to keep track of… actually, no one really had any idea of
the utility of the time sheets. It was just something we were told to do. I managed to get away with not filling
out mine for months (if they were tracking how I spent my time, I saw no point in I
telling the company worked 100 percent on the one client to which I was
assigned). Of course, I got in trouble for not in my
turning time sheets. And so, from then on, at the end of every
month, I sat down with all my time sheets and in
filled them out one go—in at 9:30 A.M., out at 5:30 P.M. In reality, I often came in earlier and
left later. But who cares. I recall taking my time to
sheets my boss for his signature. He looked them over and commented
sarcastically, “You’re certainly a very consistent
worker, aren’t you?” And then he signed them. I have to believe that the time sheets in
were implemented because something went wrong accounting. Perhaps a client was overbilled for work
done and demanded that the agency prove that the senior people who were promised to spend
time on their account actually were the ones who spent time on the account… or something
like that. In order to correct the issue in
accounting, a new process was implemented across the
company. This kind of solution is what Dr. Leonard Wong calls “Lazy Leadership.”
When problems arise, performance lags, mistakes are made or
unethical decisions are uncovered, Lazy Leadership chooses to put their into
efforts building processes to fix the problems rather than building support for their people. After
all, process is objective and reliable. It’s a
easier to trust process than to trust people. Or so we think. In reality, “process will always tell us what we want
to hear,” Dr. Wong points out. “[Process] gives us
a green light,” he continues, “but it may not be telling
us the truth.” When leaders use process to replace
judgment, the conditions for ethical fading
persist… even in cultures that hold themselves to
higher moral and ethical standards. Soldiers, for example, believe they hold
themselves to a higher standard of honesty and integrity than the general public. And the general so
public thinks too. However, in their paper “Lying to in the
Ourselves: Dishonesty Army Profession,” Dr. Wong and his research partner Dr. Stephen Gerras, both retired army who now
officers work at U.S Army War College, discovered systemic ethical fading as a
result of excessive process, procedure or demands placed on soldiers. Some of the things leadership was asking
of their soldiers weren’t unreasonable —they were impossible. Soldiers were required, for example, to
complete more days of training than were available in the calendar. As in the corporate world, pressure to complete tasks comes from the
top down in the Army. However, there is also a huge amount of
pressure that comes from the bottom up. In an effort to stand out, officers want to appear as if they can do
everything and do everything well. A failure to complete requirements could
sully a commander’s image, earn reprimands and affect promotions. a
Submitting false report of compliance helps keep the system running smoothly and keeps their careers on track. And because the punishment for being is
honest sometimes greater than for lying, soldiers are put in a position in which
they feel they have to lie or cheat in order to meet the requirements placed
upon them. It’s a Catch-22. The result is that it to
has become commonplace for soldiers find creative ways to complete their requirements while
feeling that their high moral standards remain uncompromised. One example Wong and Gerras give involves
the last-minute training requirements units had to complete before deploying to Afghanistan or Iraq. had to
Soldiers insert their ID cards into a computer to authenticate their identity in order to
complete the computer- based training. One officer admitted that he would all ID
collect the cards of his nine-man squad, then pick the smartest guy in the group
to complete the training nine times so that everyone could get a certificate. Rather
than seeing their actions as cheating or lying, many soldiers saw it simply as “checking
the boxes,” “part of the bureaucratic process” or to
just doing what “leadership wanted them do.” Some didn’t see their actions as at all
unethical because they viewed the demands as so trivial that they existed outside of any
standard of integrity or honesty, like me and my time sheets. It’s like telling someone we have to of a
cancel plans because “family issue” when in reality there is no family issue;
we just want to get out of the plans without hurting someone’s feelings.
And though we told a lie, because it’s just a little “harmless” white lie, we still believe ourselves to
be honest. When these seemingly minor transgressions
become pervasive in a culture, however, it is a sign of ethical fading. Remember, the very definition of ethical
fading is engaging in unethical behavior while believing that we are still acting in line with our own or
moral ethical code. As in the corporate world, if any of the
unethical acts that the soldiers committed were to lead to more severe consequences that
would cause public outrage, it is likely that the soldiers would be
indeed punished (and the rest of the Army subjected to additional online training
to prevent anything like that from happening again, of course). There’s a great irony in all
this. When we apply finite- minded solutions to
address an ethical fading problem that finite- minded thinking created, we get more ethical fading. When we use process and structure to fix
cultural problems what we often get is more lying and cheating. Little lies become
bigger lies. And the behavior becomes normalized. Lazy
Leadership is not a euphemism for bad leaders or bad people. Just like a person who chooses to
not exercise is not a bad person. Decisions made by Lazy Leadership can be
often very well intended. In the case of the Army, or any large organization for that matter, leadership may genuinely believe all the
extra demands and requirements they place on soldiers are helpful. But because senior leaders are rarely to
subjected those extra demands themselves, they may be oblivious to the problems
their “solutions” cause. However, if they were aware of or
also subjected to the hypocrisy, dysfunction or excessive bureaucracy, my
then like boss at the agency, they too could become complicit in the
charade. When that happens, those leaders are also
likely engaging in rationalization and self- deception. And the slope grows slipperier. If fading
ethical can happen in places where integrity is taken really seriously, like the military, then
it can happen anywhere. And it does. I cannot stress enough how
common ethical fading is in our companies and institutions. However, more structure is
not the antidote to ethical fading. Process is great for managing a supply
chain. Procedure helps improve manufacturing
efficiencies. Ethical fading, however, is a people problem. And though
counterintuitive it may seem, we need people—not paperwork, not
training, not certifications —to fix people
problems. The best antidote—and inoculation— fading
against ethical is an infinite mindset. Leaders who give their people a Just to
Cause advance and give them an opportunity to work with a Trusting Team to advance it a
will build culture in which their people can work toward the short-term goals also
while considering the morality, ethics and wider impact of the decisions
they make to meet those goals. Not because they are told to. Not because there is a checklist that it.
requires Not because they took the company’s on
online course “acting ethically.” They did so because it’s the natural to
thing do. We act ethically because we don’t want to
do anything that would do damage to the advancement of the Just Cause. When we a
feel part of a Trusting Team, we don’t want to let down our teammates. We feel accountable to our team and the
reputation of the organization, not just to ourselves and our personal
ambitions. When we feel part of a group that cares
about us, we want to do right by that group and our
make leaders proud. Our standards naturally rise. As social
animals, we respond to the environments we’re in. Put a good person in an environment that
suffers ethical fading, and that person becomes susceptible to
ethical lapses themselves. Likewise, take a person, even one who may
have acted unethically in the past, put them in a stronger, more values-based
culture, and that same person will also act in the
accordance with standards and norms of that environment. As I’ve said before, leaders
are not, by definition, responsible for the
results. Leaders are responsible for the people
who are responsible for the results. It’s a job that requires constant because
attention when little things compound, things eventually break. Infinite- minded
leaders accept that creating a culture that is more resistant to ethical fading requires patience and hard
work. It requires devotion to a Cause, a bias for will before resources and the
ability to nurture Trusting Teams. It may take longer than a quarter or a on
year (depending the size of the company) to feel the impact of the
investment. And once the ethical standards are (or
established reestablished), they must be guarded vigilantly. If is by
ethical fading powered self- deception, maintaining ethical behavior demands and
complete honesty constant self- assessment. Ethical lapses happen and are part of
being human. Ethical fading, however, is not a part of
being human. Ethical fading is a failure of leadership
and is a controllable element in a corporate culture. Which means the opposite is also true. Cultures that are ethically strong are a
also result of the culture the leaders build. When Acting Ethically Is the Standard On
November 25, 2011, outdoor clothing company Patagonia
took out a full-page ad in The New York Times with the headline: “Don’t Buy This Jacket.” Though some cynics saw the headline as a
publicity stunt by a high-priced brand that many people can’t afford, it is in the details
of the ad that we can find clues about the kind of culture Patagonia has
and that inspired such an ad in the first place. In the body copy of the ad, Patagonia did something most other would
companies consider unthinkable. They explained, in plain language, the of
environmental cost making their product, in this case the bestselling R2 Fleece. The copy read: To make [this jacket] 135
required liters water, enough to meet the daily needs (three a
glasses day) of 45 people. Its journey from its origin as 60% to our
recycled polyester Reno warehouse generated nearly 20 pounds of carbon dioxide, 24 times the of
weight the finished product. This jacket left behind, on its way to
Reno, two-thirds its weight in waste. “There is
much to be done and plenty for us all to do,” the ad concludes. “Don’t buy what
you don’t need. Think twice before you buy anything…. Join us… to reimagine a world where we
take only what nature can replace.” “We did it out of guilt,” says Patagonia founder Yvon Chouinard. we
“We all know have to consume less.” While other companies might use to from
euphemisms distance themselves or cloud the impact of their actions, Patagonia takes full ownership
of its role in the chain of causation and offers no exceptions or excuses that might lead the
way down a slippery slope. They are brutally honest with themselves
and the public about how their actions impact the world, for better or for worse. They know that
if they want to survive and thrive in the Infinite Game, they have to be this
honest. They don’t portray themselves as victims
of the system but rather a part of it… and they are doing what they can to it.
change It’s hard to even imagine Mylan taking an
out ad in The New York Times explaining that they knew they were taking advantage
of people with life- threatening allergies by raising the price of EpiPens by 500 percent, claiming they did so to highlight the and
unethical legal abuses in the pharmaceutical industry. The postmortem after any scandal or case
of ethical fading nearly always reveals a failure of leadership. Companies with cultures like
Mylan and Wells Fargo are almost destined to suffer some sort of ethical fading. With the words of by
Milton Friedman their side, their leaders think they are there to
drive results, and their incentive structures reinforce
that belief. As a result, they prioritize near-term of
financial results above any sense Cause (if they even have one). Operating with a bias toward
resources before will, the leaders willingly adjust their to
cultures meet their priorities. At Patagonia, like any other infinite-
minded organization, they turn to their Just Cause to help set
their priorities and the behavior follows accordingly. It’s not just about how much money they
can make this year. “We plan to be here in the next one
hundred years, so we think about long-term results,” says Dean Carter, vice president of Human
Resources and Shared Services at the company. Operating with an infinite mindset, is to
Patagonia’s intention not win or beat anyone else in their market. Rather, Patagonia is driven
by a vision of the future in which they make high-quality products while causing the
least harm and “use business to inspire and implement solutions to the environmental crisis.” Patagonia is a
by no means perfect company. They make mistakes and individuals within
the company still suffer ethical lapses. Patagonia recognizes this and understands
that its pursuit of the Just Cause is a journey of constant self- improvement. At too many
companies, the term “constant improvement” often and
means improving process enhancing efficiency. At Patagonia and other infinite- minded
companies, where the currencies of will and are both
resources on the radar, constant improvement refers to every of
facet their organization, including their culture and the standards
by which their culture operates. This is what helps them maintain a of
culture high ethical standards. Patagonia is not driven to be the best, they are driven to be better. Even if the headline fell flat to some, the “Don’t Buy This” campaign was not a
one-off gimmick. It was typical of Patagonia’s relentless
effort to hold themselves accountable and constantly improve. As their website says: Patagonia is a we
growing business—and want to be in business a good long time. The test of our sincerity
(or our hypocrisy) will be if everything we sell is useful, multifunctional where
possible, long lasting, beautiful but not in thrall
to fashion. We’re not yet entirely there. The copy on
goes to admit that not all of the company’s products meet these criteria,
but then they go on to introduce their Common Threads Initiative, a program they hope will help advance
them toward their goals. The initiative includes a commitment to a
make high-quality clothes that will last long time, so they don’t have to be routinely (which
replaced reduces waste); a promise to repair their products for free, so that people don’t a
throw them out (which reduces waste); partnership with eBay, so that people can “reuse,” buy and sell secondhand products (which a
reduces waste); and when product finally does come to the end of its life, Patagonia will take
it off your hands to recycle it rather than have us throw it in the garbage
(which reduces waste). While some companies go out of their way
to find loopholes they can exploit to enhance their performance, Patagonia goes out of
its way to close loopholes that enhance their values and beliefs. For the past decade, for example, the company has been working with the NGO
Verité to uncover and correct labor abuses within its first-tier supply chain, in the that
factories produce their goods. As a result of separate internal audits
in 2011, the company found that despite their to a
efforts create socially responsible supply chain, there were still a number of violations, including multiple cases of human and
trafficking exploitation, at the second-tier level, the factories
that turn raw materials into fabrics and other parts needed for production. It is remarkable that was
Patagonia even looking at, let alone trying to improve, conditions
in its second-tier suppliers. “Even the Fair Labor Association (FLA), which conducts spot audits of factories
abroad and helps companies improve their corporate- responsibility programs,” wrote Gillian White for an article in The
Atlantic, “only requires that affiliated brands
audit, monitor, and report on their first-tier
suppliers—a level at which issues of human trafficking are easier to spot and respond to.” Rooting out is a
forced labor difficult and complex undertaking that requires a major commitment of time and
investment of resources. Most companies wait to tackle it only are
when they forced to, either out of embarrassment or legal
trouble. Patagonia, of its own accord, has made
the commitment and the investment, knowing that it may never completely the
solve problem. But it will damn well keep trying. Which is the whole point of constant and
improvement ethical action. Indeed, it is the very standard of an we
effective Just Cause—that may never reach the ideal we imagine but we will die trying. This gives purpose and meaning to the we
work do at the companies we work for and inspires us to keep fighting the good
fight. Finite- minded companies might worry that
this kind of approach may cost too much, hurt profits, lose customers or ruin (few
their reputation companies want to proactively admit they do anything wrong these days). Patagonia is
not worried about those things and they’re not afraid to get out ahead of the crowd and take big
risks. Of course the company has a huge that it
advantage freely admits. It’s a private company. “The pressure of
a public company to drive profit on a quarterly basis for people who only have a vested
financial interest in the outcome of the company is significant,” Dean Carter reminds us. “So it does help to be private when our a
vested interest is certainly to make bigger impact.” Though Patagonia is a B
certified Corp—a company that practices “stakeholder capitalism”— it is not a charity. It is a for-profit that to
organization wants make more money this year than they made last year. However, they also recognize that making money is
not the reason they exist. Like all good infinite- minded companies, they see money as the fuel they need to
continue to pursue their Just Cause. To certify as a B Corp, companies are required to identify their
most deeply held social and environmental values, then abide by them, honoring their to
responsibilities their employees, customers, suppliers and communities— as
well as to the financial health of their investors. Patagonia knows that the more successful
their business, the more they can uphold that standard
and the greater the positive impact they can have in the world. They know that in the long
term, if they keep their eye on the Just Cause
and continue to guard against ethical fading, they will attract and lead those who and
share their vision values and they will thrive as a result. Ethical decisions are not on
based what’s best for the short-term. They are based on the “right thing to do.” Whereas short- termism at the expense of
ethics slowly weakens a company, “doing the right” thing slowly it.
strengthens Patagonia’s pattern of trying its hardest
to do the right thing and put people and planet before profits has earned the company and
fierce loyalty from employees customers alike. This, combined with the good will and in
trust they have built the market, has helped them become one of the most
successful, innovative and profitable companies in
their category. The company has experienced a quadrupling
of revenue over the past decade, with profits tripling. In the words of
Patagonia’s CEO Rose Marcario, “Doing good work for the planet creates
new markets and makes [us] more money.” (Notice the order in which she presents
her priorities). “As far out on the horizon line as we can
see right now,” says Rick Ridgeway, Patagonia’s VP of
Environmental Affairs, “we’re continuing to produce products to
that allow people live a more responsible life with the apparel that they choose. As long as a of
there’s lot other people out there that don’t do that… then we should be
growing.” Still, Ridgeway acknowledges, “There is a
point out there where our own growth is going to likely create more problems than it does
solutions.” It remains to be seen how Patagonia will
deal with that point if and when they arrive at it. But the very fact that they
are thinking about it, and talking about it (publicly no less), is yet another sign of their ethical
strength. As a result of leading with an infinite
mindset, Patagonia has not only created a company
more resistant to ethical fading, but has also set the bar for what acting
ethically can look like in business. And that’s by design. “If we can show the
business community that we’re successful,” says COO Doug Freeman, “we think we’re as
holding ourselves a great example for how business can be done differently.” Patagonia acts
in a way that is not just good for them, it’s good for the game… and it’s
working. Other companies now follow their lead. CHAPTER 9 WORTHY RIVAL worthy rival growth, booktok
trend, fast reading. Embrace Worthy Rival growth
with Simon Sinek—booktok ready, fast reading leadership. Whenever I heard
his name, it made me uncomfortable. If I heard sing
someone his praises, a wave of envy washed over me. I know him to be a good person and a nice
guy. I respect his work a great deal and he to
has always been nice me when we’ve met in professional settings. We do
the same kind of work—write books and give talks about our views of the world. Though there are many others who do work
similar to his and mine, for some reason I was obsessed with him. I wanted to outdo him. I would regularly
check the online rankings to see how my books were selling and compare them to
his. Not anyone else’s. Just his. If mine were
ranked higher, I would smile a gloaty smile and feel
superior. If his were ranked higher, I would scowl
and feel annoyed. He was my main competitor and I wanted to
win. Then something happened. We were invited
to share a stage at the same event. Though we had spoken at the same events
before, this was the first time we would actually
be on the stage at the same time. In the past I would speak on day one of a
conference, for example, and he on day two. This time, however, we would be on stage
at the same time, sitting side by side for a joint
interview. The interviewer thought it would be “fun” if we introduced each other. I went first. I looked at him, I looked at the audience, I looked back at him and I said, “You make me unbelievably insecure all of
because your strengths are all my weaknesses. You can do so well the things that I to
really struggle do.” The audience laughed. He looked at me and
responded, “The insecurity is mutual.” He went on to
identify some of my strengths as areas in which he wished he could improve. In an instant I understood the reason why
I felt so competitive with him. The way I saw him had nothing to do with
him. It had to do with me. When his name came up, it reminded of me
of the areas in which I grappled. Instead of investing my energy on myself—
improving overcoming my weaknesses or building on my strengths—it was easier to focus on beating him. That’s how competition works, right? It’s
a drive to win. The problem was, all the metrics of who
was ahead and who was behind were arbitrary and I set the standards for comparison. Plus there was no finish line, so I was attempting to compete in an
unwinnable race. I had made a classic finite- mindset
blunder. The truth is, even though we do similar
things, he isn’t my competitor, he is my rival. My very Worthy Rival. To anyone who has
spent time watching or playing games and sports, the notion of a finite competition where
one player or one side beats the other to earn a title or prize is familiar. Indeed, to most of us, it is so ingrained
in the way we think that we automatically adopt an “us” against “them” attitude whenever there are other players
in the field, regardless of the nature of the game. If we are a player in an infinite game, however, we have to stop thinking of as
other players competitors to be beaten and start thinking of them as Worthy Rivals who can
help us become better players. A Worthy Rival is another player in the
game worthy of comparison. Worthy Rivals may be players in our or
industry outside our industry. They may be our sworn enemies, our sometimes collaborators or It doesn’t
colleagues. even matter whether they are playing with a finite or an infinite mindset, so long as we are
playing with an infinite mindset. Regardless of who they are or where we
find them, the main point is that they do something
(or many things) as well as or better than us. They may make a superior product, command greater loyalty, are better or a
leaders act with clearer sense of purpose than we do. We don’t need to admire everything
about them, agree with them or even like them. We simply acknowledge that they have and
strengths abilities from which we could learn a thing or two. We get to choose our own Worthy
Rivals and we would be wise to select them strategically. There is no in
value picking other players whom we constantly outflank simply to make ourselves feel superior. That has
little to no value to our own growth. They don’t have to be the biggest players
or any of the incumbents. We choose them to be our Worthy Rivals is
because there something about them that reveals to us our weaknesses and pushes us to
constantly improve… which is essential if we want to be to in
strong enough stay the game. From the mid-1970s into the 1980s, Chris Evert Lloyd and Martina Navratilova
were two of the dominant players in women’s tennis. Though they were competitors when they on
met the court, each driven to win, it was the respect
they had for each other that helped both of them become better tennis players. “I appreciate what she did for me as a
rival, to lift my game,” Lloyd said once, speaking fondly of Navratilova. “And I I
think she appreciated what did for her.” It was because of Navratilova, for
example, that Evert had to change the way she
played. She could no longer rely on spending time
on the baseline. She had to learn to become a more player.
aggressive This is what a Worthy Rival does for us. They push us in a way that few others can. Not even our coach. And in the case of
Evert and Navratilova, it elevated their own games and the game
of tennis. The impact of this subtle mind shift can
be profound in how we make decisions and prioritize resources. Traditional forces
competition us to take on an attitude of winning. A Worthy Rival inspires us to take on an
attitude of improvement. The former focuses our attention on the
outcome, the latter focuses our attention on
process. That simple shift in perspective changes
immediately how we see our own businesses. It is the focus on process and constant
improvement that helps reveal new skills and boosts resilience. An excessive focus on beating
our competition not only gets exhausting over time, it can actually stifle innovation. reason
Another to adjust our perspective toward seeing strong players in our field as Worthy Rivals is it helps us
keep honest. It’s like a runner who is so obsessed
with winning, they forget the rules, ethics or why they
started running in the first place. They may spend time and energy to someone
undermine who is running faster than they are and resort to tripping their competitor. Or perhaps they will take performance- to
enhancing drugs give them a secret edge. Both tactics will absolutely increase the
chances they will win the race, but such strategies will leave them ill
equipped for success beyond those races. And eventually those strategies run dry a
and they are still left slow runner. When we view the other players as Worthy
Rivals it removes the pressure of being in a win-at-any- cost struggle and so by we
default feel less need to act unethically or illegally. Upholding the values by which
we operate becomes more important than the score, which actually motivates us to be more or
honest (organizations politicians who choose to do the right thing rather than what helps them
get ahead are good examples). As for my Worthy Rival, when I thought of
Adam Grant as a competitor, it didn’t help me. Rather, it fed my
finite mindset. I was more concerned with comparing than
arbitrary ratings I was with advancing my own Cause. I devoted too much time and energy to he
worrying about what was doing rather than focusing that energy on how I could be at
better what I do. Since that day when I learned to shift my
mindset, I no longer compare my book rankings to
Adam’s (or anyone else’s, for that matter). My mindset has shifted
away from channeling my feelings of insecurity against him to partnering with him to advance our
common cause. We have become dear friends (he kindly a
gave this book proofread and helped make it better) and I feel genuine happiness when
I hear his name or see that he is doing well. I want his ideas to spread. In fact, everyone reading this book also
should read Give and Take and Originals; they are both essential reading in and out of the
business world. (Fun fact: In an infinite game, we can both succeed. Turns out people can
actually buy more than one book.) An infinite mindset embraces abundance whereas a with
finite mindset operates a scarcity mentality. In the Infinite Game we accept that the
“being best” is a fool’s errand and that multiple can
players do well at the same time. Worthy Rivals Can Help Us Get Better at
What We Do When Alan Mulally left the airplane manufacturer Boeing Commercial
to become the CEO of the ailing Ford Motor Company in 2006, it would be the start of a journey that
would result in one of the greatest turnarounds in automotive history. After
the formal press conference to announce his new job at Ford, Mulally fielded some questions. One asked
reporter what kind of car he drove. “A Lexus,” Mulally replied. “It’s the car
finest in the world.” The new CEO of Ford just admitted that by
the car made Toyota that he drove was better than anything Ford made! To it
some was sacrilege. But to Mulally, a man who prefers the
truth, even when it’s uncomfortable, it was an
honest assessment. In the 15 years before Mulally took over, Ford had lost 25 percent market share. Now it was headed toward bankruptcy. Indeed, Mulally needed a turnaround
strategy, but first he wanted to learn as much as
he could about the company. He wanted to understand Ford’s health the
beyond balance sheet. One of the things he learned was that the
consumers were disenchanted with brand. Ford cars (at least in the United States)
had a reputation for being unexciting, unreliable gas guzzlers. Perhaps this was
part of the reason people weren’t buying Fords like they used to. Historically, Detroit’s car
companies, including Ford, were obsessed with market
share as a primary metric for comparison. However, Mulally knew that some of the in
most profitable car companies the world were also some of the smallest. He understood that
quickly it wasn’t in Ford’s long-term interest to just grow market share— something that could
be accomplished with sales promotions and cost cutting (which was exactly the turnaround plan Ford to when
presented Mulally he arrived). That strategy would only work for a few
years. “We’re not going to chase market share,” he said. “We’re not going to put out is
vehicles where demand not there and then discount and make it even worse.” If Ford was to stay in the game, they would have to change the way they
played the game. And that meant it had to relearn to make
cars that people actually wanted to drive. One of the first things Mulally did after
joining the company was to start driving home in a different model Ford every night. After trying every single car the company
made, he asked to drive home a Toyota Camry. The only problem was Ford didn’t have one
for him to drive. It was common practice for Ford to buy of
the cars other manufacturers so that their engineers could take the car to pieces to
see how they are made, but there were none available for anyone
to actually drive. Think about that for a second. The senior executives of a major car that
company was struggling to sell cars had little idea what anyone else’s cars were like to
actually drive. If car buyers test-drive their options, shouldn’t Ford’s executives know what are
they trying? Mulally had the company buy a whole fleet of cars made by other companies and his
instructed senior managers to drive them. When he called the Lexus the finest car
in the world, Mulally wasn’t trying to make the people
at Ford feel bad. He was offering them a Worthy Rival. He was convinced that in order to save
Ford, they would need to be frank about the of
state their own products and processes and respectful students of the other players
in their industry. Toyota was a company that, as Mulally it,
describes “[makes] products that people want… and
with less resources less time than anybody in the world.” They were a benchmark against which Ford
could push themselves to improve the quality of their own cars and how they made them. And if they could pull that off, the profits would follow. For Mulally, the reason to study the other car wasn’t
manufacturers simply to copy them or outsell them, but to learn from them. “I was never to
trying beat GM or Chrysler,” Mulally says. “We were always focused on
the Just Cause and we used our benchmarking against our competition as data insights on where
we could continuously improve our operation.” Continuously improving their process help
would them make better product, which would help them be more effective
at advancing Henry Ford’s original Just Cause: to provide safe and efficient transportation for
everyone, to open the highways to all mankind. Henry Ford’s Cause also served as a for
filter other decisions. Mulally sold off brands like Jaguar, Land Rover and Volvo, for example. Ford originally bought them so they could
compete in as many automotive categories as possible— something Mulally believed distracted Ford from why
the company was founded in the first place. Then came the 2008 stock market crash, which was particularly devastating for
the U.S. car industry. Without a government
bailout, GM and Chrysler would go bankrupt. Thanks to a nearly $24 billion loan that
Mulally had taken out in 2006 to help Ford reinvent itself, combined with the
steady improvements the company was making in its operations and products, Ford would be able to weather
the downturn without any government assistance. So when Mulally showed up to testify in
front of Congress before the bailouts were given, he could have insisted that the not give
government money to GM or Chrysler. A CEO who sees the other players as their
competitors would have relished watching them go bankrupt, leaving Ford as the only major
U.S. car manufacturer to survive. Surely saw
that’s winning? Because Mulally the other makers as Worthy Rivals, he actually endorsed the bailout. He knew
that keeping those companies around would only serve to help make Ford a better company. He also knew that Ford’s rivals were part
of a larger ecosystem. If they went bankrupt, so would many of
the suppliers. Which could also destroy Ford. So Mulally
put together plans to also help many of the auto suppliers weather the downturn.
Unfortunately, the leaders of the troubled GM and
Chrysler, still operating with a finite mindset, rejected Ford’s request to work together
for the good of the industry. In contrast, Honda, Toyota and Nissan did
work with Ford to help keep major suppliers, on which they also relied, in business. The infinite- minded players understood
that the best option for their own survival, and indeed the ultimate goal of an
infinite leader, is to keep the game in play. Worthy Rivals Can Help Us Get Clearer on
Why We Do It By the early 1980s, the computer revolution was in full swing. And for Apple, one of the companies that
was leading the computer revolution, the true value of their rival had little
to do with product improvement. It was bigger than that. Their Worthy and
Rival helped them better clarify their Cause rally their people. The mere existence of their
Rival reminded everyone inside and outside the company what they stood for—the reason they went into
business in the first place. “They were the navy. We were the pirates.” During the 1970s, IBM had the lion’s of
share the market in mainframe computers— huge, room-filling machines that offered power.
companies massive computing But IBM resisted developing their own
“microcomputers,” as they used to be called, believing them to have insufficient power
computing to meet a business’s needs. Personal computers, IBM believed, had no
place in the office. That all changed in 1981. Seeing how well
the pioneers of personal computing— Commodore, Tandy and Apple—were doing in getting to
their products businesses, IBM changed its tune. Flush with cash, IBM was able to invest massive amounts of
money to develop their own personal computer. They paid exorbitant salaries to steal of
some the best and brightest engineers in the business from other companies, including Apple. in
And just twelve months, IBM introduced its “PC” to the world. Apple had the biggest market share in IBM
personal computers before showed up. Which meant that they had the most to IBM
lose when entered the market. Whereas a finite- minded player would at
likely panic such news, an infinite- minded player, like Apple, did the exact opposite. In August 1981, in the same month IBM’s PC first went on
sale, Apple ran a full-page ad in The Wall with
Street Journal the headline: “Welcome, IBM. Seriously.” The rest of the ad tells
us everything we need to know about how Apple viewed this new player—not as a
competitor, but as a Worthy Rival. “Welcome to the
most exciting and important marketplace since the computer revolution began 35 years ago,” read the
opening sentence of Apple’s ad. “Putting real computer power in the hands
of the individual is already improving the way people work, think, learn, communicate and spend
their leisure hours,” the ad continued. “Over the next decade, the growth of the personal computer will
continue in logarithmic leaps. We look forward to responsible in the to
competition massive effort distribute this American technology to the world. And we appreciate the of your
magnitude commitment. Because what we are doing is increasing
social capital by enhancing individual productivity.” Apple signed the letter to their new with
Rival the words: “Welcome to the task.” Apple was trying to advance a Just Cause, and IBM was going to help them. IBM accepted the challenge. And because
of their dominance in the business world, IBM was able to leverage those to sell
relationships their new personal computers into large companies. This made Big Blue, as IBM was called,
affectionately the safe and obvious choice for any who
procurement manager was responsible for buying PCs for their company. “No one ever got fired for
buying IBM,” the saying went. To further grow their
business, IBM allowed other computer makers to
“clone” or use their operating system in their
products. Apple refused to follow suit. If someone
wanted Apple’s operating system, they had to buy an Apple. Unable to clone Apple’s OS and because it
was expensive to develop another operating system for the mass market, most other computer to
makers licensed IBM’s operating system produce IBM- compatible products. And with that, the PC became the industry
standard in the business world and beyond. IBM helped Apple turn the personal into a
computer necessity on every desk and a basic household appliance in every home. But
IBM did much more than that for Apple. Apple used IBM as a foil to help tell the
story of what they stood for in a way that was clearer and more
compelling. Just Causes exist in our imaginations, but companies and products are real. And for a person or a company with a of
clear sense Cause, that individual or organization itself of
can become the tangible symbol their intangible vision. It’s easier for us to follow a real or a
company leader than an abstract idea. And it’s easier to form a compelling for
narrative our Just Cause when we can point to a tangible representation of the
alternative. “They were the navy, predictable, sold to
corporations,” is how John Couch, one of Apple’s early
employees, described IBM. “We wanted to be the that
pirates empowered individuals to be creative.” Like Republicans and Democrats, like the
Soviet Union and the United States, IBM and Apple stood as symbols of looking
alternative ideologies for followers. IBM represented business, stability and
consistency. Apple stood for individuality, creativity
and thinking differently. By playing up the contrasts to the public, Apple moved from being a leader in the to
personal computing revolution being a leader of like-minded revolutionaries. Based on the
standard metrics against which we measure the quality of a computer— price, speed and memory, for example—PCs
and Apples were basically equal. In fact, the IBM clones were often quite
a bit cheaper. Where competitors almost always only the
compare features and benefits of their products, Apple chose to engage with IBM on a level
higher than that. Competitors compete for customers. Rivals
look for followers. To Apple’s followers, IBM was the past
and Apple was the future. And to IBM devotees, Apple was a toy for
creative types and IBMs were for serious people doing serious work. This was than
bigger products and features. This was now a game of religion. The manner in which Apple responded to PC
IBM entering the market was the total opposite of what normally happens. When a new an
company joins industry with such force, it often spooks the incumbents. They lose
frequently sight of their vision and start focusing on competing with the new player based on
product comparisons and other standard metrics. Which means, if they weren’t already with
playing a finite mindset before, the choice to view the new entrant as a a
competitor rather than Worthy Rival will drag them into the finite quagmire before
too long. This is exactly what happened to the cell
Canadian phone maker BlackBerry. Over a quarter of a century after IBM
stormed into Apple’s market, Apple did the same thing to BlackBerry. Except unlike Apple’s choice to view IBM
as a Worthy Rival that could help them better clarify what they stood for, BlackBerry a
chose to see Apple as competitor to be beaten. And they paid a hefty price for that
finite- minded decision. Before the iPhone, BlackBerry was the in
second largest cell phone operating system the world. Their high performing, highly durable and
very reliable products made them the must-have option in government and in many companies. They owned the
business market. Even after Apple introduced their iPhone
in 2007, BlackBerry’s momentum continued to carry
them to a record high 20 percent share of cell phone sales in 2009. As iPhones became more and
more popular, however, BlackBerry panicked. leaders to
BlackBerry’s could have chosen draw a contrast between their philosophies and Apple’s, as Apple had done with IBM
decades before. They could have used Apple as a foil to
highlight their own vision of the world, one that revolved around the security and
reliability needs of business and government. But they didn’t. Instead, BlackBerry to
responded the iPhone’s rising popularity by trying to copy it. First, they started offering apps and for
games their existing devices, which dramatically slowed their products’
performance. Then they abandoned their iconic, full
QWERTY keyboards and introduced touch screen options. They never really worked as well as and
iPhones were much less durable than their other models. Sadly, this is a common scenario. Disruption, remember, is often a symptom
of a finite mindset. Leaders playing with a finite mindset the
often miss opportunity to use a disruptive event in their industry to clarify their Cause. Instead, they double down on the finite
game and simply start copying what the other players are doing with the hope that it will work
for them too. And in the case of BlackBerry, it didn’t. They abandoned the chance to a
be leaders for Cause and opted to become followers of a product. Obsessed with to
trying beat Apple, they actually lost sight of their own
vision. They forgot why they went into business
in the first place. And in short order, BlackBerry went into
a steep and steady decline. By 2013 the company had less than 1
percent market share, a nearly 99 percent drop in just four
years. Where once they dominated, today is an no
BlackBerry insignificant player and company’s Worthy Rival. IBM served as Apple’s Worthy Rival for
many years. Eventually, as computers became and the
ubiquitous market changed, IBM dropped out of the PC game. The loss of their Rival did not mean won,
Apple however. They quickly found a new symbol
of safe, stable, corporate- mindedness in (“I’m a
Microsoft Mac, I’m a PC,” for those who remember). Like IBM, as Microsoft’s own Cause became
fuzzier, it no longer offered the clear contrast
ideological to Apple that it once did. So who is Apple’s Worthy Rival now? new
Perhaps Apple’s Worthy Rivals are Google and Facebook. Google and Facebook now represent the Big
Brother of the internet; always watching us, tracking our every move in order to sell
our data to companies who want to target their advertising to us (which helps and
Google Facebook make more money). This has become an “industry standard.” Apple still seems to be fighting for the
rights of individuals and challenging the status quo. The company has become an outspoken for
advocate individual privacy. Unlike their Rivals, Apple has decided to
not sell the data they collect as a means of driving revenue. They have also stood
up against the government and denied them access to our private text messages. Even though
the world around them has changed, for over 40 years Apple has found Worthy
Rivals to help keep them focused on the very cause upon which the company was
founded. Cause Blindness I have a friend who is so
focused on her Cause, it is as if she has forgotten that there
are other points of view in the world besides her own. My friend, sadly, has labeled anyone who has a as
different opinion wrong, stupid or morally corrupt. My friend from
suffers Cause Blindness. Cause Blindness is when we become so up
wrapped in our Cause or so wrapped up in the “wrongness” of the other player’s
Cause, that we fail to recognize their strengths
or our weaknesses. We falsely believe that they are unworthy
of comparison simply because we disagree with them, don’t like them or find them morally
repugnant. We are unable to see where they are in or
fact effective better than we are at what we do and that we can actually
learn from them. Cause Blindness blunts humility and
exaggerates arrogance, which in turn stunts innovation and the
reduces flexibility we need to play the long game. Less able to engage in any kind of honest
or productive practice of constant improvement, we end up repeating mistakes or continue
to do many things poorly. Plus, hubris increases the chance that to
any weaknesses our organization may have are left open exploitation by other players. All of to
which contributes the draining of will and resources we need to stay in the game. Whenever I try to show my friend that she
those players finds despicable are really good at certain things and she should respect
them for that, she mocks me and thinks me a turncoat I a
because dare pay her competitor compliment. As hard as it may be to recognize a as of
player one our Worthy Rivals, especially if we find them disagreeable, to do so is the best way to become better
players ourselves. “The more I questioned these guys, the more I came to understand that the
successful criminals were good profilers,” explained John Douglas, retired FBI unit
chief and pioneer of criminal profiling. Douglas understood that, as as we all
unconscionable find serial killers, for example, the best way to catch one to
was acknowledge that they were very good at the exact same thing that the FBI
does… which meant the FBI had to be better. Having Worthy Rivals— criminals adept at
evading the FBI—pushes the FBI to constantly improve their techniques. Having a rival worthy of comparison does
not mean that their cause is moral, ethical or serves the greater good. It just means they excel at certain and
things reveal to us where we can make improvements. The very manner in which
they play the game can challenge us, inspire us or force us to improve. Who we choose to be our Worthy Rivals is
entirely up to us. And it is in the best interest of the to
Infinite Game keep our options open. Don’t Confuse Losing Your Worthy Rival It
with Winning the Game was soon after the fall of the Berlin Wall that the United States
committed what may have been one of the greatest foreign policy blunders of the
20th century. America declared that it had “won” the Cold War. Except it hadn’t. By this point in the book, we all know the mantra: in the Infinite
Game, there is no such thing as winning. This is true in business or in global
politics. America didn’t win the Cold War. The Soviet Union, drained of will and
resources, dropped out of the game. The Cold War met
all the standards of an Infinite Game. Unlike finite warfare, where there are
agreed-upon conventions for play, easily identifiable sides and a clear of
definition when the war will end (e.g., a land grab or some other easily
measurable, finite objective). In stark contrast, the
Cold War was often played out with proxy players, there were no ground rules and there was
certainly no clearly defined objective that would signal to all sides that the war will end. As much as the United States and the West
talked about “defeating” the Soviet Union and “winning” the Cold
War, short of an all-out nuclear war—which was
something neither side wanted—few could imagine or predict exactly what winning looked like. And there was
no treaty that ended the Cold War. Instead, both sides kept playing, always
trying to improve the manner in which they played, with an unknown sense of where it was all
going. So when the Berlin Wall came down in 1989, it was not something either predicted
would happen. Like in business, times change and so do
the players. And, like in business, if a big company
goes bankrupt, it doesn’t mean the game is over or that
any company is the winner. The players left standing know that other
companies will rise up and new ones will join the industry. When our most important
Worthy Rival, the one who pushes us more than any other, drops out of the game, it does not mean
that there are others on the bench waiting to immediately rush in to play
either. It can take years for a new or different
Rival or Rivals to replace them. The advanced player in the Infinite Game
understands this and works to remain humble at the loss of a major Rival. Cautious not to or
let hubris a finite mindset take hold, they play knowing that it is just a of
matter time before new players emerge. Patience is a virtue in infinite play. This was not how America acted. After the Soviet Union left the game, America suffered a sort of Cause and to
Blindness believed itself be unrivaled. And so, it acted accordingly. It acted a
like victor. Even if well intentioned, it started to
impose its will on the world, unchecked, for about 11 years. It itself
anointed the world’s police force, sending troops to the former Yugoslavia, for example, and imposing no-fly zones
over sovereign nations. Things that would have been much harder, if not impossible, to do if the Soviet
Union were still around. Without identifying our Worthy Rivals, to
strong players start falsely believe they can control the direction of the game or the other players. But that’s impossible. The Infinite Game
is like a stock market; companies list and delist but no one can control the market. Highly successful players with lots of
money and many strengths can get away with ignoring their weaknesses for a while. But not forever. Fast-growing companies with strong and
products, marketing balance sheets, for example, often neglect to give time
and attention to leadership training or to actively nurturing their culture. Things that can come back
to haunt them later. Groupon is just one example. Hailed by
the business press for their product innovation and rate of growth, the leaders neglected their
people. Which, when the growth slowed and other
companies matched their product, became their Achilles’ heel. Uber is
another example. They may have pioneered ridesharing
technology, but the company has suffered more because
of a neglected culture than any product failing. When Dara Khosrowshahi replaced Travis as
Kalanick CEO in 2017, it was done with the express purpose of
fixing the company culture. America would have been well served to
look for new Worthy Rivals that may have helped the nation prepare for the next chapter
of the Cold War. The nation’s leaders could have looked to
beyond strengths like military and economic might focus on some of the weaknesses they had been for
neglecting so many years. But that’s not what happened. Relying on
the manner of play it had developed and perfected during the years of Cold War 1.0, America was unable to see the rise of new
Rivals that aimed to check its actions and ambitions. Cold War 2.0 There are the
three tensions that govern Cold War—nuclear, ideological and economic. (Not these with
coincidentally, things overlap Life, Liberty and the pursuit of Happiness as
stated in the Declaration of Independence. For America and all nations, these things
are existential. They are the things worth bearing any or
burden paying any price to defend). During Cold War 1.0, all three of those a
tensions were conveniently colocated in single Rival—the Soviet Union. The two nations each more
possessed nuclear weapons by an order of magnitude greater than all other nuclear- armed nations
combined. Both nations were ideological exporters
looking for customers and allies. America was spreading the gospel of and
democracy capitalism and the Soviets were proselytizers of communism. And their economies were the two largest
economies in the world from the end of World War II until the fall of the Berlin of
Wall—the entire length Cold War 1.0. Having one primary Worthy Rival has huge
advantages. It provides for a single point of focus
for strategies to be developed, resources to be allocated and the of to
attentions internal factions be pointed. Much was written after the events of 11,
September 2001, about the lack of cooperation among
America’s intelligence services, for example. This wasn’t a new
development. Those agencies were always territorial
and competitive with each other. The difference was, when America knew who
its Worthy Rival was, when push came to shove, all the agencies
could put aside their internal gripes to come together to face the common threat. Absent the identification of any new
Worthy Rivals, the internal fighting among so many of
America’s institutions continued unchecked. Even Republicans and Democrats used to be
able to agree that the Soviet Union represented a greater threat to the United States than
each other and could always come together in a clear common cause. That is no longer the
case. Absent an identified external Worthy
Rival, the two parties now see each other as the
existential threat to the nation. All the while, the real threats to grow
America ever stronger. So while America was focusing its against
energies itself, it failed to see that the Cold War was
still alive and well. Except, unlike during Cold War 1.0, in Cold War 2.0, there is not one Worthy
Rival, but many. The nuclear threat posed by the
Soviet Union has been replaced by North Korea and others. The Soviet economic rivalry
has been replaced by China (which is on course to surpass America’s economy). The rivalry
ideological that the Soviet Union represented has been replaced by extremists acting under the guise of religion. Plus Russia still continues to test and
check America’s resolve when possible across all three tensions too. Like in business, the emergence of
new players necessarily changes the way the game must be played. Blockbuster— the sole in the a
superpower movie rental business— failed to appreciate that small company like Netflix and an like to
emerging technology the internet required them reexamine their entire business model. Big publishers on
doubled down old models when Amazon showed up instead of asking how they could update and upgrade
their models in the face of a new digital age. And instead of asking themselves, “What do we need to do to change with the
times,” taxi companies chose to sue the companies
ridesharing to protect their business models instead of learning how to adapt and provide a better taxi
service. Sears got so big and so rich from sending
out paper catalogues for so many decades that they were too slow to adapt to the
rise of big-box stores like Walmart and ecommerce. And believing itself without
Rival, the behemoth that was Myspace didn’t even
see Facebook coming. What got us here won’t get us there, and knowing who our Worthy Rivals are is
the best way to help us improve and adapt before it’s too late. Without a we
Worthy Rival risk losing our humility and our agility. Failure to have a Worthy Rival a
increases the risk that once-mighty infinite player, with a strong sense of Cause, will gently slide into becoming just to
another finite player looking rack up wins. Where once the organization fought for of
primarily the good others, for the good of the Cause, without that Worthy Rival, they are more
likely to fight primarily for the good of themselves. And when that happens, when the hubris
sets in, the organization will quickly find its of
weaknesses exposed and too rigid for the kind flexibility they need to stay in the game. CHAPTER 10 EXISTENTIAL FLEXIBILITY existential speed
flexibility pivot, reading, Simon Sinek. Simon Sinek teaches with in
existential flexibility—pivot purpose a speed reading video book. Some thought him mad. He began his assets
liquidating and selling off property. He borrowed against his life insurance to
policy and even licensed the rights his own name. With the company doing so well, why would he leave now to do something
different, something so risky? But in 1952, that’s exactly what Walt Disney did. He hadn’t gone mad. What he had done was
make an Existential Flex. Walt Disney was accustomed to taking and
risks doing new things. As a young artist working in the emerging
field of animation, Disney was constantly innovating. He was
one of the first to make short films in which real actors would interact with cartoon
characters. In 1928, he was the first to make a with
cartoon synchronized sound, in the animation classic Steamboat Willie. Dissatisfied with just making shorts to
entertaining designed make an audience smile, however, Disney set out to make an film a
animated that was believable substitute for reality. One that could elicit the full range of
human emotions. And in 1937, he released the first-ever
feature- length animated film—Snow White and the Seven Dwarfs. Snow White was like nothing the world had
ever seen before. This evolution of Disney’s work wasn’t of
the result experimentation for the sake of experimentation. Nor was it driven by a desire to get rich
or become famous. With each step, Disney was advancing his
Just Cause, inviting audiences to leave the stresses
and strains of life behind and enter into a more idyllic world of his creation. The seeds
of Disney’s Just Cause were planted when he was just a boy. When he was four years old, his father, Elias, moved the family from
Chicago to live on a farmstead in rural Marceline, Missouri. The young Walt played outdoors, where there were often animals roaming
around, where he was surrounded by extended and a
family supportive community. It was, as his older brother Roy later
recounted, “just heaven for city kids.” But that
idyllic childhood didn’t last long. Elias Disney’s attempt at being a farmer
ended in failure, and five years after they arrived in
Marceline, the family was forced to move again. Landing in Kansas City, Elias bought a to
paper route and the young Walt was put work to help the family make ends meet. But it didn’t help. And as their
financial struggles compounded, so did Elias’s stress… and temper. “It reached a point,” Walt Disney
recalled, “that to tell the truth with my father me
got a licking.” Fortunately, back on the farm, Disney had
discovered drawing, a hobby that gave him a perfect escape he
from what perceived as the hardships of real life. For the rest of his days, Disney would use his art and imagination
to offer others a chance to escape their present circumstances too, to take them to a they
place where could experience the kind of joy he remembered from his childhood in the
little town of Marceline. To Infinity and Beyond Walt Disney’s to
ability transport people to another world turned out to be quite profitable. In addition to the
critical and popular acclaim, when Snow White came out it grossed over
$8 million in its first year alone (an equivalent of over $140 million in
today’s dollars). With the money and success generated from
the film, Walt built a studio in Burbank, California, and a corporate culture that
was, as former employee Don Lusk described, “just heaven.” To repay the debt from the
accumulated building studio and fuel their growth, Roy Disney, CEO of Walt Disney
Productions, wanted to take the company public. Walt opposed the idea for fear that would
shareholders meddle in the business. Eventually, however, Disney succumbed to
the pressure and the company did go public. As the company grew, it faced a host of
new challenges. For starters, the culture of Walt Disney
Productions became more stratified. Perks that used to be offered to everyone, for example, were now only offered to
more senior people. And as wage gaps increased, so did
internal dissent. And for the first time, Disney faced with
hostile struggles unions. The breakdown of Disney’s studio Utopia, combined with pressure to do more cost-
conscious live-action movies and the creative restriction he felt from the bureaucracy, left Disney feeling
downright defeated about the future. Walt Disney Productions had become more
finite and less visionary and Disney became convinced that the business could no longer serve as a to
mechanism advance his Just Cause. Despite his frustrations, his vision as
remained infinite as ever. Which is why Disney decided to make an
Existential Flex. So he quit. Fifteen years after the of
original release Snow White, Walt Disney left to do something new. Taking all the money he made from selling
property, other assets and his shares in Walt
Disney Productions, combined with a loan he took out against
his life insurance policy, in 1952 Disney formed a new company. He called it WED, after his initials, and set to work on a new project, one that he believed could advance his
Cause more than anything that came before—an actual place where people could go to escape the of
reality their everyday lives. He was going to build the happiest place
on earth. He was going to build Disneyland. Unlike the often dangerous and dirty that
amusement parks existed in the day, which tended to be just collections of
random rides, the place Walt wanted to build would be a
safe and immaculate and have coherent story that ran throughout the park. There would
be no signs of toil or trouble, nothing dark and seedy lurking in the
shadows. Here, people would be fully immersed in a
perfect illusion. “I think what I want Disneyland to be of
most all is a happy place—a place where adults and children can experience
together some of the wonder of life, of adventure, and feel better because of
it,” said Disney. It is a place where “you
leave TODAY… and enter the World of YESTERDAY and
TOMORROW.” Whereas audiences could only watch movies, at Disneyland, they could be in the
movies. And unlike a movie, which is finite, the park was something that could keep
evolving forever. In true infinite- minded fashion, Disney
explained: “Disneyland will never be finished. It’s something we can keep developing and
adding to. A motion picture is different. Once it’s
wrapped up and sent out for processing, we’re through with it. If there are that
things could be improved, we can’t do anything about them anymore. I’ve always wanted to work on something
alive, something that keeps growing. We’ve got
that in Disneyland.” Like so many entrepreneurs, Walt Disney
put everything on the line when he started his businesses. Setting out to build Disneyland, however, was perhaps the biggest risk of all he to
because didn’t have do it. He had a lot more to lose than he had had
the first time. This is the plight of the infinite-
minded, visionary leader. Once he realized that a
the company was on path that could no longer advance his Cause, he was willing to put
everything on the line to start over again. He didn’t leave because he saw an to make
opportunity more money. He didn’t leave a failing business. He found a better way to advance his Just
Cause and he leapt at it. The Vision for Flexibility Existential is
Flexibility the capacity to initiate an extreme disruption to a business model or strategic course in to
order more effectively advance a Just Cause. It is an infinite- minded player’s for to
appreciation the unpredictable that allows them make these kinds of changes. Where a finite- minded
player fears things that are new or disruptive, the infinite- minded player revels in
them. When an infinite- minded leader with a of
clear sense Cause looks to the future and sees that the path they are on will their
significantly restrict ability to advance their Just Cause, they flex. Or, if that leader a is
discovers new technology that more likely to help them advance their Cause going than
forward the technology they are currently using, they flex. Without that sense of infinite
vision, strategic shifts, even extreme ones, tend
to be reactive or opportunistic. Existential Flexibility is always It is
offensive. not to be confused with the defensive maneuvering many companies undergo to stay alive in the of
face new technology or changing consumer habits. Many newspapers and magazines uprooted
their business models when they went digital, for example, not because they found a way
better to advance their Cause but because they were forced to make the change in the of
face a changing world. Though necessary to stay alive, that kind
of change rarely inspires the people inside the organization or reignites their passions. An Flex
Existential does. Many start-ups are fueled more by an for
entrepreneur’s passion a vision than by resources they have to advance it. An Existential Flex a
recreates that passion for something new at time when the company is already enjoying
success. When Walt Disney started over again with
WED, he brought a group of people from the who
original company wanted to go on the new adventure with him as if it were the
first time. They were willing to share the risk, they were willing to put in the hours, they were willing to do whatever they had
to do to make this new idea successful. They found Disney’s enthusiasm infectious
and were excited to, once again, do things they never dreamed
of. The Flex also rejuvenated Disney’s own
passion. “Dammit, I love it here!” he said of his
new company. An Existential Flex doesn’t happen at the
founding of the company, it happens when the company is fully and
formed functioning. To all the finite- minded observers, it is existential because the leader is
risking the apparent certainty of the current, profitable path with the uncertainty of a
new path—which could lead to the company’s decline or even demise. To the finite- minded player, such a move is not worth the risk. To infinite- minded players, however, on
staying the current path is the bigger risk. They embrace the uncertainty. Failure to
flex, they believe, will significantly restrict
their ability to advance the Cause. They fear staying the course may even to
lead the eventual demise of the organization. Again, the motivation for an infinite- to
minded player Flex is to advance the Cause, even if it disrupts the existing business
model. To the finite- minded player, the reason
not to Flex is expressly to protect the current business model, even if it undermines the
Cause. And if the company is the vehicle a uses
leader to advance their Cause, then making a dramatic shift in strategy
to keep a company going for a very long time, in one form or another, is also of paramount importance in the
Infinite Game. Existential Flexibility is bigger than to
the normal day-to-day flexibility required run an organization. And we must not confuse shiny-object with
syndrome Existential Flexibility, either. There is a whole category of the
frustrated employees around world who work for well- meaning, sometimes visionary leaders who,
like a cat reacting to a shiny object, want to chase every good idea they come
across with “This is it! We have to do this to advance the vision!” When an Existential Flex happens, it is
clear to all those who believe in the Cause why it has to happen. And though they may
not enjoy the upheaval and short-term stress such a change may cause, they all agree
it is worth it and want to do it. Shiny-object syndrome, in contrast,
often leaves people flummoxed and exhausted rather than inspired. When a visionary leader makes an Flex,
Existential to the outside world it appears that they
can predict the future. They can’t. They do, however, operate a a
with clear and fixed vision of future state that does not yet exist—their Just scan
Cause—and constantly for ideas, opportunities or technologies that can
help them advance toward that vision. Alan Mulally used his business plan at to
review meetings Ford also look at what was happening in companies beyond his
traditional competitors. “It’s about always keeping an eye on all
the things that are going on and learning from that,” he explained. Where a more is
finite- minded leader also looking for opportunities, their gaze tends to be within their
industries, on the balance sheet or toward the
horizon. An infinite- minded leader with a Just
Cause looks outside their industry and miles beyond the horizon—to a place that requires to see.
imagination This was certainly the case when Steve an
Jobs made Existential Flex at Apple in the early 1980s. As I wrote about in the
previous chapter, Apple had a very clear sense of Cause. And the seeds of that Cause were sown was
long before Apple founded. Growing up in Northern California during
the Vietnam War, the company’s founders, Steve Jobs and
Steve Wozniak, were deeply mistrustful of the
establishment. They loved the idea of empowering to up
individuals stand to Big Brother. During the computer revolution of the
1970s, the two young entrepreneurs saw the as to
personal computer the perfect tool for individuals challenge the status quo. They imagined a time in
which, thanks to the personal computer, would to
individuals have the power stand up to a corporation, maybe even compete with them. After the I
launch of the Apple and the Apple II, Apple was already a highly successful
company. They were working on their next product
iteration at the time when, in December 1979, Jobs and a handful of
his executives visited Xerox PARC, Xerox’s innovation center in Palo Alto, California. While on the tour, the Apple
executives were shown one of the new technologies Xerox had developed, called the “graphical user
interface.” The graphical user interface allowed to a
people use computer without learning a computer language like DOS. Instead, with GUI, users could, for the first time, use a “mouse” to move the “cursor” on the screen to
“click” on visual “icons” and “folders” that were
sitting on the “desktop.” If the vision was to empower individuals, this one innovation would make it for to
possible even more people use computers than could before. After the Apple executives left
Xerox PARC, Jobs shared his idea. Apple had to change
the course they were on. They had to invest in GUI. One of the executives, attempting to be a
voice of reason, spoke up. “We can’t,” he said. He reminded Jobs that Apple had already
invested millions of dollars and countless man-hours on an entirely different direction. Abandoning
that work to ostensibly build a new product from scratch would add significant strain on the company. to
According Apple folklore, the executive went on to say: “Steve, if we invest in this, we will blow up our
own company.” To which Jobs replied, “Better we should
blow it up than someone else.” A more finite- minded leader would be to
hard pressed simply walk away from an established strategic path, especially if it included
walking away from any significant time or money that had already been invested or the promise of a
performance bonus. Despite the cost and the stress it would
put on the company, to Jobs an Existential Flex was Apple’s
only option. The Just Cause directed his choice, not the cost of the choice. And Apple’s employees agreed. The people
who loved working at Apple loved that Jobs pushed them to do things that neither they nor anyone
else had done before. And with that, they set themselves on a
path that in just four years saw the introduction of the Macintosh. A computer
operating system that completely revolutionized personal computing. For the first time, the personal computer
really was easy enough for just about anyone to use. Microsoft was forced to follow lead.
Apple’s Nearly four years after the introduction
of the Mac, Microsoft released Windows 2.0, the first
version of Windows to look and feel like the version many use today. It is software that was a
designed to make PC work like a Macintosh. If You Don’t Blow It Up, Someone Else Will “As convenient as the
pencil,” said the advertising. “You press the
button, we do the rest.” That pretty much summed
up George Eastman’s vision when his company, Eastman Kodak, introduced the first ever
cameras to be sold to the general public. This was the late 19th century and was by
photography almost exclusively performed professionals and serious hobbyists back then. Regular people just
couldn’t take their own pictures of their families or vacations. The equipment was bulky and heavy. The chemicals required to treat the were
photographic plates highly toxic. It was complicated and expensive. But was
Eastman obsessed with simplifying photography for the masses. Though he made early advances in how were
photographic plates coated, his real breakthrough came when he a way
invented to completely replace the heavy plates with a type of cellulose nitrate plastic
called celluloid. Originally used to make the dental plates
that hold in dentures, we are more familiar with its modern use:
film. Having brought photography to the masses, Kodak went on to become one of the in the
biggest companies world and George Eastman one of the richest men. And following his
death in 1932, the company went on to further advance
Eastman’s Cause. Always looking for ways to give average
folks better ways to capture their own memories, in 1935 Kodak introduced the first color
commercially successful film for the masses. This also paved the way for color motion
pictures and color home movies. Kodak also invented the slide projector a
with round tray that made it easier and more convenient for people to share the of
pictures their vacations, weddings and anything else they could and
force their friends family to sit down to watch. In the early 1960s, Kodak invented the
film cartridge, making photography even simpler and more
convenient. Now, people who struggled with or were by
intimidated threading film onto a spool in their camera only had to plop the film into the
cartridge back of the camera and they were off to the races (literally… if that was their thing). And in 1975, the R&D department developed something
truly remarkable: the first digital camera. But there was a problem… Though going
digital was an obvious next step for the company to advance its Just Cause, the problem
was, the invention of digital photography the
directly challenged company’s business model. Kodak made money on every part of taking
pictures. They made the cameras, the film, the flash cubes, the machines that the
processed film, the chemicals that were used to develop
the film and the paper the pictures were printed on. Everyone knew that the new digital
technology would render their current business obsolete. If George Eastman or any other infinite-
minded leader were at the helm, this wouldn’t be an issue. They would see
the new technology as a better way to advance their Cause and they would figure
out how to reconfigure their company. Sadly, the Cause had been brushed to the
side at the executive levels. Finite thinking now dominated. They were
no longer making decisions to advance the Cause, they were making decisions to manage the
costs and maximize their near-term financial standing. Lacking any sense of vision whatsoever, when the executives at Kodak were first
shown the digital technology, their initial reaction was that people to
would never want look at pictures on a screen. The executives told their engineers that
people liked their pictures on paper and there was nothing wrong with paper. Steven Sasson, the who
young engineer is credited with inventing the digital camera, tried desperately to get the executives
to imagine the future of photography 20 or 30 years ahead. Much to his dismay, his leaders no
had interest in advancing the Cause and certainly no stomach for any decision that would
upset the status quo, especially when the status quo was just
working fine and was quite profitable for them personally. They had no appetite to upset Wall Street
or go through what would have been the short-term hell of blowing up their own
company in order to advance their Just Cause and remake Kodak into a digital company. And so, abandoning Eastman’s vision, of
instead making the Existential Flex they needed to, they instead decided to suppress the new
technology for as long as they could to stave off the inevitable. “When you’re talking
to a bunch of corporate guys about 18 to 20 years in the future, when none of those
guys will still be in the company, they don’t get too excited about it,” said Sasson. “Every digital camera that a
was sold took away from film camera and we knew how much money we made on film,” Sasson continued. “Of course, the problem
is pretty soon you won’t be able to sell film—and that was my position.” Instead of leading
the digital revolution, Kodak’s executives chose to close their
eyes, put their fingers in their ears and try
to convince themselves that everything was gonna be just fine. And I guess it was… for a time. But it didn’t last. It couldn’t last. Finite strategies never
do. Now that the digital genie was out of the
bottle, Kodak predicted that it would take about
10 years for other companies to seize on digital photography and make it a thing. And they were right. About 10 years after
they first invented the digital camera, Nikon, the Japanese camera company, an to
introduced SLR camera that gave users the ability attach an external digital processor (which was
made by Kodak because they owned the patents) to the body. But it was Fuji, a much smaller
Japanese film company, that, in 1988, exactly 100 years after
Eastman introduced the first film camera for the masses, introduced the first fully digital camera
to the market. Nikon later partnered with Fuji, and they
together continued to innovate and refine the technology. About 10 years after that, Sharp, a Japanese electronics company, the first
introduced cellular phone. And 10 years after that, by the mid- to
late 2000s, digital cameras and cell phones with both
built-in cameras became the norm. Kodak did own many of the original to the
patents related digital technology. And they made billions of dollars from
those patents. Which gave the false impression that they
were doing well as a company. The finite- minded leaders falsely that a
believed strong balance sheet equaled a strong company. It doesn’t. At least not in the context
of the Infinite Game. When Kodak’s patents ran out in 2007, the money dried up, and five years later
Kodak filed for bankruptcy protection. Bankruptcy is so often an act of suicide. When we look back at the decisions that a
put once successful companies on path to bankruptcy, we discover an uncomfortably
high number of leaders who were obsessed with the finite game. Their Cause abandoned, instead they are
left desperately clinging to business models that may have helped them become successful but could not the
stand test of time. In most cases, it’s not the “market
conditions” or the “new technology” or any of the as
other stock reasons usually offered explanations that are responsible for their company’s
demise. It was the leaders’ inability to make the
necessary Existential Flex that was the problem. If they had abandoned their Cause, they also abandoned the capacity to Flex. Call it “existential inflexibility.” At
some point, every single organization will need to a
make Flex. Though that need might not happen during
one particular leader’s tenure, part of any leader’s responsibility is to
build their organization with the capacity to exercise Existential Flexibility should they or their need to
successors do so. That means adhering to the Just Cause as
a guiding light and maintaining a culture rich with Trusting Teams. The opening sentence
of the January 19, 2012, announcement of Kodak’s bankruptcy
in The New York Times summed it up perfectly: “Eastman Kodak, the 131-year-old film pioneer that has to
been struggling for years adapt to an increasingly digital world, filed for bankruptcy protection on
early Thursday.” A statement from the chief financial
officer, Antoinette McCorvey, revealed the very
finite game Kodak’s leaders were playing. “Since 2008,” the statement went, Kodak’s
“despite best efforts, restructuring costs and recessionary have
forces continued to negatively impact the company’s liquidity position.” The leaders of a once great infinite had
company abandoned their moral responsibility to advance Eastman’s Just Cause in favor of a perceived to
responsibility more finite ambitions. They allowed forces of the market and not
a passion for the vision to dictate the company’s future. And the entire company, the people who worked there, the town of
Rochester, and their shareholders had to pay the
price. These days, Kodak exists as a shadow of
its former self. At the time Kodak invented the digital
camera, the company employed about 120,000 people. Now they employ about 6,000 people. Though the company still makes film and
all the products that go with processing film, ironically its entire business primarily
services one market today: professional photographers, the final nail in the coffin. Kodak had completely abandoned their
founding Cause. Without a Just Cause to guide them, Kodak’s executives lacked the vision or
courage to know what to do for the long-term success of their company. The most they could do
was react to the world around them. George Eastman literally invented
mass-market photography. The people who worked at Kodak were in of
pioneers almost every part the industry. It was only their finite mindset that to
left this once great company be disrupted by the visionary technology they themselves
invented. CHAPTER 11 THE COURAGE TO LEAD Hanging in the lobby
of its corporate headquarters was a huge sign that stated their Just Cause: Helping on
people their path to better health. And the company’s executives believed it. They saw their company as having a beyond
purpose just making money; they wanted to use their company to advance something bigger. They regularly had meetings with
health-care companies, hospitals and physicians on how they work
could better together for patients. However, near the end of many of these to
meetings someone would point the elephant in the room: “But don’t you sell cigarettes
in your stores?” In February 2014, CVS Caremark announced
that it would stop selling any tobacco- related products in all of their over 2,800 stores. It was a decision that would cost the $2
company billion per year in lost revenue. It was a decision they chose to make even
though there was no competitive pressure to do so. There was no loud public demand
that they make the decision. There was no scandal. There was no online
campaign to force them to make the decision. The news was met with overwhelming from
support the general public. But Wall Street and its pundits were none
too pleased. “It might make money in Oz,” said Jim Cramer, one of CNBC’s financial
commentators, “but Wall Street is not Oz. [Wall Street isn’t] saying. ‘You know I
what? am going to buy CVS because they are good citizens.’” Cramer went on, “I’m… trying to figure out the earnings per
share. And the earnings per share for CVS just
got worse.” Other outside commentators agreed and saw
the decision as a boost for CVS’s competitors. One Illinois- based sales and marketing
consultant pointed out that the decision translated into seven hundred packs of cigarettes a week per store that
would now be sold by some other retailer, adding that “retailers know that winning
the adult tobacco consumer generates incremental sales from ancillary purchases during the same visit.” Looking through
the lens of finite and infinite games, I can’t help but see these responses to
CVS’s decision as exquisitely finite minded. If the game of business was a finite game
and the future was easy to predict, the pundits would have been 100 percent
correct. As it turns out, however, the game is and
infinite the future is quite unpredictable. In reality, that seven hundred packs of
cigarettes per week per store didn’t just go somewhere else. They went nowhere. The total sale
of cigarettes actually decreased. An independent study commissioned by CVS
to see the impact of their decision showed that overall cigarette sales dropped by 1 percent all
across retailers in the states where CVS had a 15 percent market share or greater. In those states, the average smoker five
bought fewer packs of cigarettes, which totaled 95 million fewer packs sold
over an eight-month period. On the other hand, the number of nicotine
patches sold increased by 4 percent in the period immediately after CVS stopped
selling cigarettes, indicating that CVS’s decision actually
encouraged smokers to quit. As for the lost revenue, other purpose-
driven companies who previously refused to do business with CVS also took notice. Companies like and
Irwin Naturals New CHAPTER vitamins and supplements, whose products are available at Whole and
Foods other specialty health stores, finally agreed to allow CVS to carry too.
their products A move that allowed CVS to offer a of to
greater selection high-quality brands their customers and open new sources of income. When a company with the stated Cause of a
helping people live healthier lives made courageous decision to deliver on that purpose, not only did it help make Americans a
little healthier, but it also had a positive impact on at
overall sales their pharmacies. will and resources strategy, fast reading, video book. Build Will and Resources with
Simon Sinek—fast reading leadership strategy. Of course, there are many other factors
that have contributed to CVS’s (which soon after the decision changed their name to CVS stock
Health) performance. But financial health in the Infinite Game
is again, like exercise, impossible to measure in
daily steps. It is a steady buildup that, in time, yields dramatic results. Jim out
Cramer adroitly pointed that Wall Street isn’t going to buy a company because they are good
citizens. But customers and employees do. And more
loyal customers and more loyal employees tend to translate into more success for the company. And the more successful a company, the more shareholders tend to benefit. Or am I missing something? Indeed, as Cramer and other analysts predicted, CVS’s stock price did fall 1 percent the
day after the announcement, from $66.11 to $65.44 per share. Only to recover the very next day. A year and a half after the announcement
and eight months after the plan was implemented, the stock hit $113.65 per share, double what it had been before the —and a
announcement record high for the company. And what of that “gold standard” of public company financial metrics that
Jim Cramer was so worried about—the earnings per share? Prior to the announcement in December 2013, CVS had an EPS of $1.04. After the announcement it dropped to
$0.95. By the next quarter it was back up to and
$1.06 then rose by 70 percent to average $1.77 over the course of the
next three years. Adopting an infinite mindset in a world a
consumed by the finite can absolutely cost leader their job. The pressure we all face today
to maintain a finite mindset is overwhelming. For most of us, almost any kind of career
opportunities we have are almost all tied to how well we perform in the finite game. Add the steady drumbeat of the analyst
community, pressure from private equity or venture
capital firms, the tying of executive pay packages to
stock performance rather than company performance (which amazingly don’t always align), our egos and the pressure
many of us put on ourselves because we falsely tie our own value or self-worth to how we
perform in the finite game, and any hopes we may have to do anything
other than play with a finite mindset seem completely dashed. Bowing to the of
pressure the finite players around us is the easy and expedient choice. This is why it to
takes courage adopt an infinite mindset. The Courage to Lead is a willingness to
take risks for the good of an unknown future. And the risks are real. For it is much easier to tinker with the
month, the quarter or the year, but to make with
decisions an eye to the distant future is much more difficult. Such decisions us
may indeed cost in the short term. It may cost us money or our jobs. It takes the Courage to Lead to operate a
to standard that is higher than the law—to a standard of ethics. And when we
are pressured to do things that violate that ethical code, it takes the Courage to to
Lead speak up, to make those who would pressure us to do
otherwise aware of the situation they are creating. And it takes courage to offer
our help so they may fix it. It takes the Courage to Lead to make to
decisions counter the current standards of business and it takes the Courage to Lead to the
ignore pressure of outside parties who are not invested in or believers in our Just
Cause. Courage, in the Infinite Game, is not the
solely about actions we take. Even leaders who operate with a finite
mindset can take risks. Courage, as it relates to leading with an
infinite mindset, is the willingness to completely change
our perception of how the world works. It is the courage to reject Milton stated
Friedman’s purpose of business and embrace an alternative definition. When we have the courage to a
change our mindset from finite view to a more infinite view, many of the decisions
we make, like CVS’s choice to stop selling
cigarettes, seem bold to those with a more view of
traditional the world. To those who now see the world through an
infinite lens, however, such a decision is, dare I say
it, obvious. So how are we to find the to our
courage change mindset? We can wait for a life- altering experience that us
shakes to our core and challenges the way we see the world. Or we can find a Just that
Cause inspires us; surround ourselves with others with whom we share common cause, people we trust and who trust us; a Rival
identify worthy of comparison that will push us to constantly improve; and remind that
ourselves we are more committed to the Cause than to any particular path or strategy we to
happen be following right now. The first method is completely legitimate
and indeed is the way so many of our great leaders came to be infinite minded. Be it tragedy, opportunity or divine
intervention —something pushed them, sometimes quite suddenly, to see the in
world an entirely new way. This method is, however, a bit of a
gamble…. I would not recommend that we simply go
about our days waiting for this to happen. The second method offers us a little more
control. All that is required is a little faith, a little discipline and the willingness
to practice. For many, that conversion can feel
profound. Beyond how it feels, however, such a mind
shift does indeed affect the decisions and actions we take. To those who still see the world
through a finite lens, our actions may seem idealistic, naïve or
stupid. To those who believe what we believe, our actions will seem courageous. To the
infinite- minded players out there, those courageous choices become the only
options available. The Power of Purpose “She told me I let
couldn’t our airline fail because of the dramatic impact it would have on her life
as a single working mom,” he remembers. Doug Parker was named the
new CEO of America West Airlines on September 1, 2001. Ten days later, the events of 11
September unfolded. Though many businesses suffered, the on
impact the airline industry was especially hard. U.S. passenger loads declined over the
following two years, to a level that hadn’t been seen since
World War II. Companies like United and US Airways for
filed bankruptcy protection. And for a smaller regional airline like
America West, who didn’t have the kind of revenue the
cushion bigger airlines had, it looked like the company was going to
completely collapse. Parker was one of the first to apply for
a government loan from the newly formed Air Transportation Stabilization Board in
(ATSB), which offered $10 billion loans to the airline industry after September 11. But the meeting didn’t go
well. Flying home on an America West flight, Parker felt dejected. “It didn’t look
good,” he recalls. “As the newly minted CEO of
America West, I was going to have the shortest, least successful CEO career in history.” To take a break from thinking about the
day, he decided to go to the galley to talk to
the flight attendants. And that’s when he met Mary. An outstanding flight attendant, Mary’s
job meant everything to her. It was no fault of hers that she worked
for an airline without the strength to survive the industry shakeout. “The only
hope she had to avoid a serious personal crisis,” Parker recounts, “was for the people she
worked for to figure out how to keep her company afloat.” Before meeting Mary, was
avoiding collapse a business matter for Parker—it was about figuring out the numbers to keep the company in
business. It was only about managing the resources. After meeting Mary, it became a personal
mission; it was about will too. “That commitment to a purpose bigger than
ourselves drove us to accomplish things we likely would not have been able to if we were simply
working on our own account,” Parker explained. With newfound passion,
the new CEO and his team fought for and received the government loan that had seemed to get on
impossible the flight home. Looking to further strengthen the company
and get a more competitive route network, Parker led America West into a merger US
with Airways in 2005 and with American Airlines in 2013. “At that point the mission was
accomplished,” says Parker with pride. “American is the
largest airline in the world. Our team was finally safe.” But something
still felt off for Parker. “By early 2016, I found myself my purpose
questioning for working,” he said. “We had delivered on a purpose
bigger than ourselves, and I was still showing up to work, but it didn’t feel very fulfilling. Was I just working for money?” he remembers asking himself. “For I sure
prestige? didn’t like the thought of answering either of those questions in the affirmative.” to
Parker started ask himself if he should leave the company. Move on to do something that “could my to
better fulfill desire work for a cause bigger than myself,” as he put it. This is so common among highly successful
people. After they finish their careers, they go
on to start foundations or distribute their wealth to charity, working to fulfill a desire to
give back, do that “something” more philanthropic. a
But purpose is not something we only find after successful career. Parker’s drive to serve Mary and
her colleagues, though incredibly inspiring, was framed a
as moon shot. It had an end point. And once completed, Parker was left searching again. He had
tasted what it felt like to be driven by something bigger than himself. It ignited
a passion in him to drive the company to succeed like never before—not for his own glory, but for others. And he wanted that again.
feeling Parker heard a talk given by Bob Chapman, the CEO of the manufacturing company
Barry- Wehmiller. Chapman (about whom I wrote extensively
in Leaders Eat Last) is an outspoken voice for the idea that the best leaders and the best
companies prioritize people before numbers. That his company consistently thrives a
beyond expectations with people- before- profit philosophy earns him invitations to speak to the converted and skeptics
alike. It was at one of those talks that Parker
was struck with a clear realization— he recognized the moon shot but he hadn’t
yet recognized the context for that moon shot. Working to give people job security and
higher pay may be an essential milestone on his journey, but it wasn’t the Just Cause him
that could inspire for the rest of his life. “We needed to create an environment
that cared for them! Where they were recognized and appreciated for their great work; where
their leaders cared about them; and where they went home at the end of the day feeling fulfilled. That was the new mission bigger than I’d
myself been looking for,” Parker says excitedly about his new
infinite pursuit. So what happens when the CEO of the in
largest airline the world has the courage to change how he leads—to move from a to
finite an infinite mindset? Like so many companies that prioritize numbers before
people, American Airlines had a history of trust
issues with employees. Long before Doug Parker showed up, the previous leadership team had from the
negotiated significant concessions unions in the name of “helping the company manage bankruptcy while at
protection,” the same time, guarantees were made to the top seven
executives that they would receive bonuses worth double their salaries simply to stick around for a few
more years. As if that wasn’t bad enough, $41 million was put aside to protect the
pensions of the top 45 executives. And no such provisions were made for file
rank-and- employees. The scandal ultimately resulted in the of
resignation then CEO Donald Carty. In his departing statement, he expressed
hope that his successors would try to build a ‘‘new culture of collaboration, cooperation and
trust.’’ Something that, despite public assurances, his Gerard and
successors, Arpey Tom Horton, were unable to do. And the trust and
violations possible ethical fading persisted. Unless a new leadership team was willing
to make some hard choices and some sacrifices to demonstrate that they were indeed worthy
of trust, nothing was going to change. Parker that
understood grand pronouncements of how things were going to be different would do little to move the
needle. He knew he and his leadership team needed
to find the courage to demonstrate that things were, in fact, going to be different. And that’s exactly what they did. Their first significant act happened in
2015, when they negotiated new contracts for
their pilots and flight attendants that would make them some of the best paid in the industry. A year later, however, Delta and United
signed new pilot and flight attendant contracts of their own, leapfrogging American by 5 percent 8
for flight attendants and percent for pilots. With the culture of cynicism still alive
and well, many believed, falsely, that leadership
knew this would happen and worked to hurry up and lock them into the lower contracts for the
next five years. “Saying you trust people is just words,” says Parker. “To validate the trust, we have to act in a way that lives up to
the words.” A lot of other executive teams would and
simply shrug promise to deal with it at the next contract negotiation. “Isn’t the
that purpose of a contract?” they may say. However, trust is not built
by pressure or force, trust is built by acting in a way with
consistent one’s values, especially when it’s least expected. is
Trust built when we do the right thing, especially when we aren’t forced to. And seeing their employees left behind or
industry averages for three four more years just didn’t “feel right for the new American and it
doesn’t feel consistent with our commitment,” according to a joint statement issued by
Parker and company president Robert Isom. The senior executives decided to give all
their flight attendants and all their pilots a midcontract raise of 5 percent and 8 percent, respectively, and asked for nothing in
return. The decision would cost the company over
$900 million over the next three years. It was a decision they knew Wall Street
would hate. And they were right. On April 27, 2017, when American made the announcement, Wall Street’s reactions were predictably
disapproving. One analyst, Kevin Crissey, who in the
specializes airline industry for Citi, wrote to his clients, “This is
frustrating. Labor is being paid first again. Shareholders get leftovers.” A letter a
from group of J.P. Morgan analysts echoed the sentiment. “We
are troubled by AAL’s wealth transfer of nearly $1 billion to its labor groups,” said the opening of
line the letter. “We’re sensitive to American’s desire to
‘build a foundation of trust’ with its labor stakeholders,” the letter later explained, “but we think
this latest agreement goes too far…. The solution to a rising wage bar is not
to chase it, in our view. Sometimes, the timing of is
one’s commitments simply fortuitous.” By “fortuitous,” I believe they were
saying “possibly unfair, but in our favor.” Fortunately, the at to
leaders American Airlines had the courage make a decision to strengthen their company Mr.
without considering Crissey’s and the J.P. Morgan team’s
annual bonus structures. Sadly, it is finite mindsets of those Mr.
like Crissey and the analysts at J.P. Morgan who help sway the market. American predicted they would lose as as
much 5 percent of their stock value. The day after the announcement, the stock
price actually lost 9 percent of its value. The good news is, short-term thinking has
often short-term impact. In less than two weeks the stock regained
its full original value and, by year end, was over 20 percent higher. Even so, many on Wall Street argue that
American would be more profitable if it hadn’t given its employees raises. Once again, demonstrating their bias for resources
over will. Finite thinkers do not appreciate that an
investment in people will ultimately benefit the company, the customer and their investments (and
they probably also fail to recognize that it was their guidance that pushed the stock price
down). A CEO of a major public company pointed
out to me that Wall Street analysts tend to write for the short-term community. So they tend to write the things that
promote their interests— finite objectives. Responding to a question about all that
short-term analyst chatter, Parker admitted that it is hard to
completely ignore. We “have to work on it, we can quickly get sucked into it,” he said. The good news is, Parker, his team and the board of are to
directors working hard be less reactive to the noise and to stay focused on the long
term. “We need to care for our team so that can
they care for our customers,” said Parker. “That’s how we will create
value for our shareholders.” American Airlines is still in the early
days of their new journey. But because they are now preaching more a
of long-term story than in the past, they are, unsurprisingly, attracting the
attention of more long-term- minded investors. The kinds of investors who care less the
about short-term fluctuations. One of those investors is Ted Weschler. Weschler is one of four investment who
managers run Warren Buffett’s Berkshire Hathaway, a company well known for their long-term
positions; they rarely sell off their investments. (As it turns out, long-term shareholders, like Berkshire Hathaway, have their own
analysts and tend not to be swayed by the twenty-four- hour financial news cycle.) Buffett—the
Oracle of Omaha, one of the most successful investors in
history, one of the richest men in the world, revered in financial circles worldwide—
once wrote that airlines were one of the worst investments someone could make. As he explained in a 2007
Berkshire Hathaway shareholder letter, “The worst sort of business is one that
grows rapidly, requires significant capital to engender
the growth, and then earns little or no money. Think airlines. Here a durable advantage
competitive has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted
capitalist had been present at Kitty Hawk, he would have done his successors a huge
favor by shooting Orville down.” It’s worth noting that, at the time of of
the publication this book, Berkshire Hathaway is the single largest
shareholder of American Airlines. And when Doug Parker informed them of his
intention to give the midcontract raise to his flight attendants and pilots, Weschler
gave Parker his blessing. The joke is, all those finite thinkers
who complain about Parker’s leadership perspective will probably still invest in American if they think they can
make a buck. It Takes No Courage to Keep a Finite CVS
Mindset decided to use their Just Cause to guide their business and they were the
first to take the risk to remove cigarettes from their stores. This should make it to
easier for others follow their lead. However, as of the writing of this book, its two biggest competitors, Walgreens
and Rite Aid, continue to stock cigarettes on their
shelves. I wanted to give them the benefit of the
doubt. Even though they are both pharmacies, perhaps Walgreens and Rite Aid chose to a
stay the course because they have different cause than CVS. Perhaps their decisions are
consistent with their stated purposes. So I checked, to be sure. On the “About us” section of the Boots
Walgreens Alliance (the company that owns Walgreens pharmacies) website, it states that its purpose is to
“help people across the world lead healthier and happier lives.” After which it states, “Walgreens Boots Alliance takes seriously
its aim of inspiring a healthier and happier world, as reflected in our core values.” Of which the first is, “Trust: respect, integrity and candor guide our actions to
do the right thing.” When asked if they plan to follow CVS’s
lead, Walgreens released a statement that their
included “active decision to reduce space and visibility of tobacco products in certain of our stores as we
focus on helping customers who want to stop smoking.” Bold, Walgreens, bold. chairman
Executive of Walgreens Boots Alliance James Skinner responded to the same question by stating, “We’ve reviewed this
on a regular basis and it’s always up for a review decision down the road.” Isn’t the
that opposite of courage or conviction? What exactly is Mr. Skinner afraid will happen if he a
makes decision consistent with the company’s actual stated purpose? According to the Centers for
Disease Control (CDC), smoking is the leading preventable cause
of death in the United States. The number of people who die from related
smoking- illness each year is greater than all the people who die from HIV, illegal drug use, alcohol use, car and
accidents firearm- related incidents combined! Cigarettes kill 480,000 people every single year. That’s 80,000 more the
than total number of American servicemen who died in all of World War II! The economic costs
are also exorbitant. All those smoking- related illnesses cost
American taxpayers more than $300 billion each year. The entire cost of NASA’s Space Shuttle
program, which includes building six space (five
shuttles of which flew to space), cost taxpayers $196 billion over the of
course more than thirty years (an average of $6.5 billion per year). The annual health-care
total related to smoking costs the country nearly fifty times more than traveling to space! If an oil
company is held responsible for the costs associated with an oil spill or even a leaky
pipeline, if car companies are held responsible in
when defects a car’s design causes injury, then shouldn’t tobacco companies and the
stores that sell their products be held responsible for that $300 billion annual cost? Remember those
errors in causal perception in the ethical fading section. Of course a pharmacy devoted to helping a
people be healthy that sells highly addictive and cancer- causing product like cigarettes
bears some responsibility for the ill health they cause their customers, yes? The single best way to prevent all
the deaths and reclaim all the money we lose to smoking- related illness is to
help smokers stop smoking. Something most smokers want to do. Nearly 70 percent of all smokers, many of whom shop at pharmacies, report a desire to quit. But it’s not
easy and, obviously, many struggle to do so. Which is why offering them an antismoking
program next to the cigarettes isn’t much help. That’s a little like selling doughnuts to
next diet books. The choice facing the consumer is between
one item that satisfies a craving and is bought on impulse and another that requires and
discipline hard work. Anyone who actually wanted to help would
try to make the harder choice a little easier by fully removing the thing that drives
the impulse… even if there is a cost to doing so. That’s what the Courage to Lead is! If of
leaders organizations go so far as to state a Just Cause, or purpose, for their organization, then it’s kind of
necessary that they must actually believe in that Cause. The whole point of having a statement of
Cause or purpose is that they actually believe it. That they really believe the purpose
of business is bigger than making money. A Cause can only advance if they do the
things that help advance it. If they don’t, what’s the point of having
a Cause written on the wall or on the website? More and more people say to
they want work for a purpose- driven organization, especially Millennials and Gen Zers. But
without committed, infinite- minded leaders willing to norms
challenge accepted of how the working world works, statements of Cause are just feel-good a
marketing— stuff company may say to curry favor with people inside or outside the organization, but may not actually believe in or do
themselves. Perhaps the pressure to make their is on
numbers acting business leaders like the seminary students at Princeton. If the leaders of companies
have no real interest adopting an infinite mindset or at least being open to the idea that they
maybe don’t have everything figured out, they can at least have the courage to say
what their true intentions are and delete from their websites and marketing what to
appear be hollow statements of purpose or cause. Being honest about their short-term would
intentions be, as Walgreens explains in its values, operating with integrity in order to
build trust. But alas… that too takes courage. After the CVS announcement, Rite Aid, the third of the big three pharmacy in
chains America, responded to the same questions about it
whether would follow suit. After all, doing so would also be with
consistent its stated purpose. The first sentence of the “our story” section of the pharmacy website reads, “At Rite Aid, we have a personal interest
in your health and wellness. That’s why we deliver the products and
services that you, our valued customer, need to lead a
healthier, happier life.” Yet, when asked whether to
they planned follow CVS’s lead and stop selling cigarettes in their stores, the company released a
statement that Milton Friedman himself could have written: “Rite Aid offers a wide range of products, including tobacco products, which are for
available purchase in accordance with federal, state and local laws.” Think about that a
for moment. When a company responds to an ethical (or
question defends an unethical decision) by explaining that they can legally do what they are doing, that’s like someone who has been caught
cheating by their long-term boyfriend or girlfriend replying, “What?! We’re not married. I broke no
laws. I’m legally allowed to sleep with someone
else if I want.” Their actions may indeed be legal, but it is hardly the kind of response or
that engenders rebuilds trust. When companies and the people who lead
them act with courage and integrity, when they demonstrate that they are and
honest of strong character, they are often rewarded with good will
and trust from customers and employees. The day after CVS made the announcement
that it would be pulling cigarettes from all its stores, the phone rang on Maryalyce desk.
Saenz’s It was her mother. Almost in tears, she told Maryalyce how proud she was that
her daughter worked for a company like CVS. For years, Maryalyce’s father’s smoking a
habit had been source of family conflict. “That was a really gutsy move,” explained Maryalyce. “I was really proud
to come to work that day. And, I think out of everything,” she continued, “that was the day where I
sat back and I thought, ‘I am absolutely in the right place.’” It’s safe to say that neither employees
nor customers get the same warm and fuzzy feelings when a company obeys the law. The courage to see the Infinite Game—to
see the purpose of business as something more heroic than simply making money, even if it’s
unpopular with the finite players around us—is hard. True Courage to Lead holds the company to
and its leadership a much higher standard than simply acting within the bounds of the
law. Only when organizations operate on a than
higher level federal, state and local laws can we say they have
integrity. Which, incidentally, is the actual of to
definition integrity— firm adherence a code of especially moral or artistic values: incorruptibility. the
Indeed, pursuit of a Just Cause is a path of integrity. It means that words and actions must
align. It also means that there will be times to
when leadership must choose ignore all the voices calling for the company to serve
the interests of those who don’t necessarily believe in the Cause at all. Integrity does not just
mean “doing the right thing.” Integrity means acting before the public
outcry or scandal. When leaders know about something that is
unethical and only act after the outcry, that’s not integrity. That’s damage
control. “They wait for public opinion to tell to
them what do,” said Rosabeth Moss Kanter, a professor at
Harvard Business School, when talking about how CEOs make today.
decisions “CEO courage is in short supply.” Splits and Crossroads Human beings are
messy and imperfect. There is no such thing as a perfectly and
infinite- minded leader there is certainly no such thing as a perfectly infinite-
minded organization. In reality, even the most infinitely can
focused companies stray onto a finite path. And when that happens, it takes the to to
Courage Lead recognize that the organization has strayed from its Cause and it takes of to
courage leadership get back on course. This is sadly common once an organization
has achieved great success. Whereas the infinite- minded player sees
that they are still at the tip of the iceberg no matter how much traditional success
they enjoy, the finite player will often transition
into playing defense to guard their pole position. It takes Courageous Leadership to stay in
the Infinite Game after you arrive at the top. To recognize that, regardless of how much
success has been achieved, the Cause is infinite. Unfortunately, the
temptation to convert to finite is so, so tempting. There was a period, for example, when the Disney corporation
strayed from its infinite Cause to chase more finite pursuits like global domination, enhanced value of
shareholder and the enrichment those who chose to enable it. In 1993, Disney bought Miramax Films, which went on to produce such family- as
friendly movies Quentin Tarantino’s crime flick Pulp Fiction; Danny Boyle’s black comedy about Scottish
heroin addicts, Trainspotting; and a rereleased edit of
Francis Ford Coppola’s surreal ride into the Vietnam War, Apocalypse Now Redux. Under Disney’s
record label Hollywood Records, we were able to enjoy such family- acts
friendly as the hard-core punk band Suicide Machines and heavy metal band World War III. Whenever a new CEO takes over, that new leader will stand at a
crossroads. How will they lead? When Mike Duke and at
Steve Ballmer took the helms Walmart and Microsoft, respectively, both made the to
choice lead their companies down a finite path. Had the companies stayed on these paths, they may have been forced to drop out of
the game altogether. The CEOs who replaced them, Doug McMillon
at Walmart and Satya Nadella at Microsoft, also made a choice—to do what they needed
to do to put their respective companies back on the infinite path. And though they
still face many challenges, both seem genuinely committed to leading
a Cause, not just running a company. Major events, like an IPO or change in leadership, can force an organization to choose one
path over the other too. However, there need not be a specific to
event cause an organization to veer from the infinite path to a finite one. Such veerings or splits off the infinite
path are actually quite normal. People stray from their own paths all the
time. We often stray from a healthy routine or
fall off other healthy bandwagons. As companies are run by people, it would be expected that these things
will happen. What causes an organization to stray off
course is often quite consistent. It occurs when leaders become more in own
interested their finite pursuits than the Infinite Game and drag the organization along with them. Organizations will also find themselves a
at crossroads when their leaders start to believe their own myths—that the success the company under
enjoyed their leadership was a result of their genius rather than the genius of their people, who were inspired by the Cause they were
leading. These leaders too often fixate on their
advancing own fame, fortunes, glory and legacies at the of
expense the company and its Cause. Management becomes disconnected from the
people and trust breaks down. And when performance necessarily starts a
to suffer as result, these same leaders are quicker to blame
others than to look at what set the company on the new path in the first place. In order to “fix” the problem, their faith in the people is replaced in
with faith the process. The company becomes more rigid and making
decision- powers are often taken away from the front lines. It can’t be a good thing when the
captain of the ship, who is supposed to be on deck navigating
toward the horizon, is now in the ship tinkering with the to
engine trying make it go faster. Facebook was an infinite player that now
seems to be moving down a more finite path. Founded in 2004, Facebook came to life a
with well- articulated Cause to “give people the power to build community and bring the
world closer together.” Today, however, it finds itself embroiled
in scandals that do anything but “bring the world closer together.” Facebook has been accused of
violating their users’ privacy, tracking our habits online (even when not
we’re on Facebook), failing to adequately police fake or fake
accounts news disseminated across their service, then using all the data they collect to
either sell or to maximize the dollars they can earn from selling advertising. I this
doubt is what Mark Zuckerberg meant by “giving people power.” Has Facebook veered from their of
once inspiring infinite path because the overwhelming pressure their leaders feel to answer to Wall Street’s
finite expectations? Is it because they are doubling down on a business model driven by selling of
advertising instead making an Existential Flex to reshape the entire company? Is it because their
leaders have lost connection with their Just Cause and who they need to be primarily serving in
order to keep the game in play? Is it hubris? Today, when Facebook does by
right the people, it is too often a result of public or and
pressure scandal rarely a proactive decision made to protect those they serve and
advance their Cause. Facebook reacted to the scandal that
erupted around Cambridge Analytica, for example, only after there was a
scandal, even though they were aware of Cambridge
Analytica’s unethical practices before we found out about it. Regardless of what combination of things
led Facebook down this path, there is no getting around the fact that
they are acting with a more finite mindset than in the past. Being big and rich does
not mean the company can’t fail. Though money certainly helps delay the in
inevitable this never-ending game. It also provides the runway for leaders
to get things back on track. The only question is whether they will or
not. With a little Courage to Lead they can of
renew the trust the people who helped champion their success before it’s too
late. As companies like Microsoft, Walmart and
Disney show, companies can afford to veer off course a
for while. They will still face the challenge of way
finding their back to the infinite path that they once all started down. Though some
can bear the cost of splitting for longer, money eventually runs out. Not every can
organization afford to veer off the infinite path for as long. Regardless of the size of the
company, the elements of infinite- minded that to
leadership I’ve tried make a case for in this book are the best way to help stay on
that infinite journey. Playing the Infinite Game is not a
checklist, it’s a mindset. How to Find the Courage
to Lead In my life, the only common factor in all my failed
relationships is me. The common factor in all the struggles is
and setbacks that finite leaders face their own finite thinking. To admit that takes
courage. To work to open one’s mind to a new takes
worldview even more courage. Especially when we know many of our will
choices go badly. To actually take steps to apply an to an
infinite mindset organization’s culture can seem to many like it would take insurmountable
courage. And the truth is, it does. For it can be embarrassing, even
humiliating, to admit that we are part of the problem. It can also be empowering and inspiring a
to decide to be part of the solution. Few if any of us have the courage to from
change a finite mindset to a more infinite one alone. We must find who
others share our sense of responsibility, who share our beliefs that it is time to
change and who share our desire to work together to do it. In every case I
wrote about to demonstrate the Courage to Lead, the hard decisions were not made by
great women and great men. They are done by great partnerships. Great teams. Great people who stood with
together deep trust and common cause. Like a world-famous trapeze artist would
never attempt a brand-new death- defying act for the first time without a net, neither can we find
the courage to lead without the help of others. Those who believe what we believe
are our net. Courageous Leaders are strong because all
they know they don’t have the answers and they don’t have total control. They do, however, have each other and a Just Cause to guide
them. It is the weak leader who takes the
expedient route. The ones who think they have all the or
answers try to control all the variables. It requires less strength to announce at
layoffs the end of the year to quickly squeeze the numbers to meet an arbitrary than it
projection does to explore other, maybe untested, options. When leaders the
exercise Courage to Lead, the people who work inside their will to
organization start reflect that same courage. Like children who mirror their parents, so too do employees mirror their leaders. Leaders who prioritizes themselves over
the group breed cultures of employees who prioritize their own advancement over the health of the company. The Courage to Lead begets the Courage to
Lead. AFTERWORD Our lives are finite, but life
is infinite. We are the finite players in the infinite
game of life. We come and go, we’re born and we die, and life still continues with us or us.
without There are other players, some of them are
our rivals, we enjoy wins and we suffer losses, but we can always keep playing tomorrow
(until we run out of the ability to stay in the game). And no matter how much we
money make, no matter how much power we accumulate, no matter how many promotions we’re given, none of us will ever be declared the of
winner life. In any other game, we get two choices. Though we do not get to choose the rules
of the game, we do get to choose if we want to play we
and get to choose how we want to play. The game of life is a
little different. In this game, we only get one choice. Once we are born, we are players. The only choice we get is if we want to a
play with finite mindset or an infinite mindset. If we choose to live
our lives with a finite mindset, it means we make our primary purpose to
get richer or promoted faster than others. To live our lives with an infinite means
mindset that we are driven to advance a Cause bigger than ourselves. We see those
who share our vision as partners in the Cause and we work to build trusting with them
relationships so that we may advance the common good together. We are grateful for the we
success enjoy. And as we advance we work to help those
around us rise. To live our lives with an infinite is to
mindset live a life of service. Remember, in life, we are players in
multiple infinite games. Our careers are just one. No one of us be
will ever declared the winner of parenting, friendship, learning or
creativity either. However, we can choose the mindset with
which we approach all these things. To take a finite approach to parenting to
means do everything we can to ensure our kids not just get the best of everything
but are the best at everything. A seemingly fair standard, for these help
things “will our kid excel in life.” Except when a finite mindset is the
primary Strategy, it can give way to ethical fading or push
us to become more obsessed with our child’s standing in the hierarchy over if
they are actually learning or growing as a person. An extreme example is shared by clinical
psychologies and New York Times bestselling author Dr. Wendy Mogel. She tells the story of a who
father raised his hand during a conference at which she was speaking to tell her “he
that had a fight with the pediatrician about his son’s apgar score… and I won.” The apgar score is a test performed the a
within first minute to five minutes of child’s birth to determine their strength. Basically, as Dr. Mogel explains, “if are
they blue and floppy, you get a one, if they are pink and plump
they get a five.” Think about that for a second. This parent seemed more concerned with
“winning” and getting his newborn child a higher
score rather than concerning himself with his child’s health. Flash forward 18 years and think about go
the lengths that parent might to ensure his child gets the best scores to get into if
the best school all the time ignoring their child is actually learning or is in
healthy every other way. To parent with an infinite mindset, in contrast, means helping our kids their
discover talents, pointing them to find their own passions
and encouraging they take that path. It means teaching our children the value
of service, teaching them how to make friends and
play well with others. It means teaching our kids that their for
education will continue long after they graduate school. It will last their entire lives… and there may not be any curriculum or to
grades guide them. It means teaching our kids how to live a
life with an infinite mindset themselves. There is no single, greater contribution
in the Infinite Game than to raise children who will continue to grow and serve others long we
after are gone. To live a life with an infinite mindset
means thinking about second and third order effects of our decisions. It means thinking about
who we vote for with a different lens. It means taking responsibility for later
impact of the decisions we make today. And like all infinite games, in the game
of life, the goal is not to win, it is to perpetuate the game. To live a life of service. None of us wants on our tombstones the in
last balance our bank accounts. We want to be remembered for what we did
for others. Devoted Mother. Loving Father. Loyal
Friend. To serve is good for the Game. We only get one choice in the Infinite of
Game life. What will you choose? *** ■ ■ ■ If this
book inspired you, please pass it on to someone you want to
inspire. Congratulations! You did it! You’ve the
finished book, which means you’re already one step ahead! How was your speed reading experience? Do you
feel the difference? Share your thoughts in the comments – I’d love to hear from you! Every book
you read makes you even faster! Check out the playlist for more great books and
keep going! ww.youtube.com/@VideoReading *** Book: The Infinite Game Author: Simon
Sinek Genre: Business / Leadership Topics: Long-term leadership, Organizational resilience Keywords:
infinite mindset leadership, speed reading, Just Cause Simon Sinek, video book leadership Hashtags:
#SpeedReading #TheInfiniteGame #SimonSinek THE END

3 Comments

@VideoReading 2 months ago

Let me know your comfortable reading speed and the speed you’d like to master in the comments! Watch my top playlist full of videos for every type of reader https://www.youtube.com/playlist?list=PLl_jk1aID72_9SADFF50yVEQuF_Y5ZgNZ
@charlesngs8249 2 months ago

10:55
@snehagupta5714 2 months ago

damn its awesome. like right now i am preparing for CAT exam 25, this technique is going to help me to read fast and understand the passage HEHE XD