I listened to a thought provoking interview in a podcast on my morning commute today. The Entreleadership Podcast put out a new episode where the host interviews best selling author, Simon Sinek, about his new book. Through Q & A Simon highlights some of the themes of his book, The Infinite Game, which is set to release next month. It’s definitely on my short list of books I want to read next, and here’s why…
Simon explains to the host and listeners that there are two types of games, finite and infinite. Finite games include sporting competitions such as baseball, etc. Infinite games do not have set rules, time frames, and competitors may not be known. Business, he explains, is an infinite game. It is a game that keeps going and going. The way he looked at business in this light definitely brought a fresh perspective. He encourages companies to look at business as an infinite game, so that the focus is to build a healthy company that lasts, not one that only grows quickly or increases revenues by an arbitrary deadline.
In so many instances, organizations put unnecessary pressure on themselves and employees by creating finite games within their workplace. Now Simon does not argue against goal setting, but he warns against the danger of short term gains that come at the expense of long term stability.
For example, he brings up the example of Blockbuster and Netflix. Netflix was a new company, getting its start, while Blockbuster was the dominant force in movie rentals. But their models were different. As Netflix innovated with a subscription based revenue stream, Blockbuster ignored the threat, and kept on with business as usual. Simon even brings up the story that apparently an executive at Blockbuster brought up the idea of testing out a subscription model, where like Netflix at the time, customers could keep a DVD as long as they wanted. Supposedly his idea was shot down due to the fact that over 10% of Blockbuster’s revenue came from late fees.
Blockbuster was playing the finite game. Their focus was on immediate revenues. They were playing defensively, protecting the model that they had built. They lacked big picture clarity. Netflix was innovating. Netflix is now huge. Blockbuster is not around.
Simon goes through other real world examples like this, and argues that the metrics we use to measure success are subjective. A company may have full focus on increasing market share 10% in one year. Maybe they achieve their goal. But maybe they do so at a cost. Maybe they are not profitable that year because they dropped all their prices to boost the market share that they cared so deeply about. The point is this… business is indeed an infinite game, and companies should not limit their perspective to simply short term goals, quick growth, and small picture focus. It is essential to plan for the long term and have a macro perspective of the market.
Previously I have listened to another one of Simon Sinek’s books, Start with Why, which I highly recommend. He is a great writer and thinks about life, work and business in an outside of the box way. For those of you looking for another good author, definitely check him out.
Below is the link to this podcast. Give it a listen, learn a few things, and feel free to comment if you have any thoughts on the subject.