I thought what I do is share with you a
little bit about what I’m working on now
I’m actually writing a new book that’s
completely fascinated me and become
completely engrossed with the subject
it’s all based on game theory in game
theory there are two types of games
there are finite games and there are
infinite games a finite game is defined
as known players fixed rules and an
agreed upon objective like football we
all agree what the rules are at the end
of the game whoever has more points as
the winner and we all go home then you
have an infinite game an infinite game
is defined as known and unknown players
the rules are changeable and the
objective is to perpetuate the game to
keep the game and play when you pit a
finite player versus a finite player the
system is stable football is stable when
you pit an infinite player versus an
infinite player the system is also
stable like the Cold War was stable
because there cannot be a winner or a
loser the goal is to just keep the game
and play and because there are no
winners or losers in an infinite contest
what happens as players drop out of the
game when they run out of the will or
the resources to play and other players
will replace them but the game keeps
going with or without them problems
emerge when you pit a finite player
versus an infinite player because a
finite player is playing to win and an
infinite player is playing to keep
playing so this is what happened with
the United States and Vietnam then
Americans were trying to beat the Viet
Cong and the North Vietnamese would
fight for as long as is necessary and
America found itself necessarily in
quagmire this is the Soviet Union in
Afghanistan where the Soviets are trying
to win and the Mujahideen were fighting
for their lives and necessarily the
Soviet Union find themselves in quagmire
until they ran out of the will or the
resources to play and they left the game
is what happens so if you think about
the game of business the game of
business is an infinite contest there’s
no such thing as winning the game of
business
it doesn’t exist the game of business
has existed longer than every single
company that exists on the planet today
and it will outlast
every single company that exists on the
planet today but if you listen to the
language that most companies use they
don’t know the game they’re playing they
talk about beating their competition
they talk about being number one
based on what agreed-upon metrics
profits revenue market share number of
employees square footage over what
agreed-upon timeframe a quarter a year
three years five years ten years I
didn’t agree to your standards so how
can you declare yourself the winner
how can you declare yourself number one
in other words companies can say
whatever they want if we haven’t agreed
to the standards every single bankruptcy
is a company that is run out of the will
or the resources to play and they drop
out of the game that doesn’t mean the
game ends another company will replace
them almost every merger and acquisition
are when companies declare that we no
longer have the will or the resources to
continue to play by ourselves we have to
merge our resources with another company
so that we can stay in the game in other
words most companies don’t last because
they are playing the wrong game the
infinite players are the ones that
frustrate their competitors so I spoke
at an education summit for Microsoft I
also spoke at an education summit for
Apple at the Microsoft summit I would
say that 80% of the executives spent the
vast majority of their presentations
talking about how to beat Apple at the
Apple summit a hundred percent of the
executives spent a hundred percent of
their presentations talking about how to
help teachers teach and how to help
students learn one was obsessed with
their vision one was obsessed with where
they were going
the other one was obsessed with beating
their competition guesses guess which
one is frustrated in this competition
because the finite player is playing
against its competitors and the infinite
player is playing against themselves the
infinite player wakes up every single
day and says how do we be better this
week than we were last week how do we
perform better
next month than we did this month
it’s a it’s a game of constant
improvement it is totally fine to study
our competition for tactical reasons but
the number of companies that study their
competition for strategic reasons is
scary which means they react
strategically to their competition and
will change entire business models on a
basically on a whim which means the
company has no stability is going all
over the place in other words you’re
wasting time and resources and you’re
frustrating the people on the inside
because they don’t know where they’re
going it’s a constant game of reaction a
long time ago inappropriate of previous
life I used to work at an ad agency and
I was a junior kid and I worked in the
competitive analysis department and I
worked on one of the telco telephone
company clients that we had and my job
was to report to the client on what the
competition was doing now the number of
other telephone companies that existed
in America that day was quite a long
list and we the client couldn’t afford
to study them all so we studied a
handful of them so think about that for
a second they’re studying their
competition but they’re only studying
some of their competition well what
about all the others not to mention the
fact that in the infinite game it’s
usually the competitors we don’t know
about that take us down not the ones we
do know about myspace had no idea that
Facebook even existed until it
completely destroyed their company
because they were so focused on the ones
they do new it did know about it and I
find that fascinating because remember
in the infinite game we don’t always
know who all the competitors are so at
the end of my talk at Microsoft they
gave me a gift they gave me the new Zune
when it was a thing Zune was the
competitors of the iPod and this thing
was gorgeous an absolutely spectacular
piece of technology beautifully designed
the user interface was beautiful it was
intuitive and simple there’s a really
remarkable piece of technology it didn’t
work with iTunes which means I couldn’t
use it which is a different problem but
the technology itself was really quite
sophisticated and quite stunning so
after I got done with my talk at Apple
I’m in the back of a taxi with a very
senior Apple executive sort of employee
number 12 kind of guy
and I decided decided to stir the pot
and I turned him I said you know
Microsoft gave me their new Zune I said
to him and it is so much better than
your iPod Touch to which he responded I
have no doubt conversation over because
the infinite player understands that
sometimes your head and sometimes your
behind and sometimes your product is
better and sometimes it’s not the goal
is not to win every battle the goal is
to outlast the competition you let the
competitor compete against itself and
drive itself down to zero while you’re
out there improving your systems
constantly this is what it means to play
the infinite game and I’ve become
totally fascinated by this because the
companies that frustrate their
competitors the one that seemed
unbeatable the ones that everybody
targets but seems unable to reach
accidentally are playing the infinite
game so in the US Costco frustrates
Walmart but if you listen to Jim Senegal
the founder of Costco he talks about
building a business for the next 50 or
100 years not for the next one year or
one quarter for Wall Street he talks
about the need to take care of his
employees first his customers second his
shareholders third because that’s the
way he will build a long-lasting company
and it is true when we prioritize the
needs of the shareholders which by the
way is the equivalent of a coach
prioritizing the needs the sorry
prioritizing the once of the fans over
the needs of the players
that’s what shareholder supremacy is
that doesn’t build a strong stable team
you may win a game you may even win a
tournament but you won’t build a team
that can win year after year after year
after year Southwest Airlines frustrates
all the other airlines in America
because they’re competing against
themselves they put their employee
number one they put their customer
number two they put their shareholder
number three that is the order in which
you play the infinite game because that
is the order in which you build
stability
but companies that have it in the
reverse order go out of business or are
merged or acquired because they run out
of the will or the resources to compete
by themselves I’m totally fascinated by
this the vast vast vast majority of
businesses don’t know the game that
they’re playing don’t know the game that
they’re in which means we’re all playing
by the wrong rules this has completely
changed the way we do business in our
company where we’ve adjusted and are
adjusting and learning to adjust our
systems for a more infinite scenario so
for example think about how we
incentivize behavior right usually what
we do is we give someone an arbitrary
target to hit usually in an arbitrary
time frame it’s usually a year and the
reason it’s a year’s because that’s when
we pay taxes and we pay taxes every 18
months those would be our arbitrary
dates right but there’s nothing magical
about 12 months it’s arbitrary right so
we give somebody an arbitrary target
sales revenues whatever it is on an
arbitrary date see in a year from now
and if they hit that target
we bonus them and say good job and if
they miss that target we say better luck
next time
right but if we’re playing the infinite
game this is what we started doing we’ve
become more preoccupied with the trend
over the absolute target that they hit
so for example what if somebody’s
building really good solid systems that
are showing really good incremental
growth really stable good solid
incremental growth but by the time we
hit 12 months they’re short they miss
the target you’re damn right I’m gonna
bonus that person because what they’re
doing is they’re building the right
systems that I can see will hit the
target I can see it will hit the target
15 months from now in others we got the
date wrong it’s the date that should
adjust not the other way around
versus somebody who hits the target but
if I go back and look at what they did
and it looks like their performance is
this and they’re stabbing people in the
back and there you know beg barring
stealing dropping the price and doing
whatever it takes to make the sale
because I gotta hit the target gotta hit
the target and on the right day on the
right time we bonus them which is
rewarding them for building an unstable
company the trend matters sometimes it
hits the date sometimes it doesn’t the
dates are there to help guide us to help
set a pace and a tempo but if you’re
running a marathon
and you want to run a four-hour marathon
and at your half marathon you’ve got an
hour and 57 minutes you’re happy but if
you’re 2 hours and 13 minutes you don’t
quit you just got the pace wrong and we
don’t do this in business we put the
date instead of the systems I don’t
understand that we were adjusting even
the way we talk about money has changed
for us so if you look at our P&L we
actually do not have a line on our P&L
that says profit it doesn’t exist
we have a line that says freedom right
because money buys us freedom the
freedom to say no to clients we don’t to
work with the freedom to say yes to
clients we do want to work with but
don’t have any money it gives us the
freedom to take a holiday to pay our
staff better to give it away to support
charities whatever we want to do and
you’re damn right I want more freedom
next month than I do this month then I
have this month yeah damn right and
that’s what money affords us but it’s
all contextualized and what the amazing
thing is it does is it gels the company
together because now our whole team is
working towards the opportunity to give
rather than the opportunity to reward
themselves our team because we’re much
more interested in the systems and the
trend they fight we find that they were
much better helping each other hit goals
and targets because absolutes no longer
get you rewards it’s the underlying
systems which is super stable and for
entrepreneurs we all live with the fear
or at least the acknowledgement that our
companies are very much built on us if
you if you’re the founder it’s my
personality it’s me my idea you know
those kinds of things and if I were to
get hit by a bus the likelihood of the
company closing is very very high that’s
called finally the question is have you
built a company that could survive you
getting hit by bus that the employees
believe in the cause and the vision so
much that the systems are so stable
you’ve built redundancy into the system
that anybody can do somebody else’s job
you there’s at least one person who can
do somebody else’s job that the company
can sales
and the employees would want to keep the
business going without you because they
believe that the cause is big enough
that they would continue without you I
can say with absolute certainty that if
anything would have happened to me my
entire team would continue working they
would continue working to see this
vision that we have come to life and
figure new ways without me I play one
piece in the machine that’s it just one
it might be the most public one but it’s
only one piece and I’m like I said I’ve
become absolutely fascinated by how can
we compete in a game if we don’t even
know what game we’re in and then we drop
out and somebody else replaces us and
nobody’s sorry or nobody nobody calls
you a loser it’s you haven’t lost
anything but you’re not a winner if you
stay in the game either this is
wonderful so the question is how do you
do this what is it require so as is my
nature I have to write things on boards
that’s a joke the so the infinite game
exists up here finite game exists down
here right the infinite game is will
includes the why what I call our purpose
cause or belief it’s the vision of the
company it’s where we’re going it’s
something that we will never practically
reach in our lifetimes or ever but we
will die trying that’s the point right
it’s different from a big hairy
audacious goal which for all practical
purposes you could reach it may be
difficult but you could reach it
this is an ideal something it’s a vision
of the worlds of my vision I imagine a
world in which the vast majority of
people wake up every single morning
inspired to go to work feel safe when
they’re there and return home fulfilled
at the end of the day that is my vision
right we will never practically get
there but we will die trying the United
States was founded with a document
called the Declaration of Independence
in which the document stated all men are
created equal now the United States has
not achieved that and will never achieve
that but it the country is at its best
when we’re trying to achieve that civil
rights women’s suffrage gay rights the
you know universal education universal
health care etc etc this is where our
values exist our values are timeless
they do not change every year whenever
we have a
your teacher off-site and if they do you
have a problem that happens in big
companies every few years a new CEO
comes in and have a values thing and
they change it and they change and they
changed no no your values are your
values right and they’re based on your
founders and they exist from patterns of
how you operate when you are operating
at your natural best when your company
is operating at its natural best when
all cylinders are firing when you’re in
the flow whatever euphemism you want to
use there is a pattern that emerges and
that pattern are your values there’s a
minimum of three there’s no more than
five if there’s more than five there’s
usually redundancy you can find overlap
that you can find lowest common
denominators and they are intractable
these things are inherently intangible
and hard to measure right which is why
they often get brushed aside it’s not
that they don’t exist they’re just hard
to measure then down here you have the
finance what I call the what it’s all
the tangible stuff right things like our
interests exist down here because they
are tangible they are inherently easy to
see and easy to measure like products
sold money taken in things like that
right number of clients we have the way
you build an infinite business is you
want to run all decisions first through
your values and your cause and then
through your interests that’s how it
works so what does a values based
our military to battle they will go into
the battlefield and if they wound a bad
guy we will send our medics onto the
battlefield to pull the wounded enemy
off the battlefield we will put them in
our helicopters fly them to our
hospitals put them in our hospital beds
and our doctors will use our medicine to
nurse them back to health that is not in
our interest but it’s kinda who we are
that’s why there are scandals when we
find out that our military desecrated
dead bodies of our enemies it’s because
it violates our values it makes us upset
to know that our guys did that
that is not in keeping with we say
things like who we are that’s what we’re
talking about right that’s why we do
something that is not in our interest
because it reflects our values in the
United States we had a scandal with
torture right now the reason we tortured
offshore and the reason we tried to keep
it a secret is because we knew it
violated our values if it was well
within our values we would be totally
open about it and we just do it back
home we hide things that we know are
uncomfortable and violate our values in
other words you don’t have to think very
hard about whether this is in our values
or not we know it’s it’s it we know
right now our interests lie down here so
we make decisions every single day right
new client should we take their business
sure they’re gonna pay us a ton of money
take it right new ad campaign what
should we say in it hey we can use
clickbait and we can drive we can drive
sales hard over here and we make all
these decisions based on what numbers
are and we’re making all decisions that
are in our interest and those the
argument we make we make financial
debates and we don’t consider this stuff
right now in a vacuum any one of these
decisions may be just fine but the
problems is when we pull back and we
look at all of our decisions nobody
knows what we stand for because we are
all over the place that is perceived by
employees and as customers by and by
customers as selfishness in other words
as highly tuned social animals which we
are we will perceive this behavior as
not trustworthy and we may do business
with you that’s called transaction but
we’ll never give you our loyalty and we
will never trust you employees are the
same way I will work for you as long as
you keep paying me but I will be open to
other opportunities elsewhere and I will
not give you my best and brightest
because I don’t know that I’m safe here
because you I see the way you make
decisions now if we make values based
decisions means we run all of our
decisions through here first
occasionally we might make less money
than we could have we made that decision
occasionally we make mistakes but what
starts to happen is all of our decisions
start to look mostly consistent and if
you pull back everyone can say aha I
know what you stand for I know what you
believe they use words like authentic or
where they say you have high integrity
or you are of hike moral fiber
character all of these words that we use
to describe people used to describe
companies as well I trust you knowing
very little other than I know how you
make decisions so take us for example
right we work with some very
dysfunctional companies but at the core
the executives who bring us in are
trying to do the right thing
we have been offered to go work with
companies who when we talk to them we
know they only want to use our stuff to
drive short-term gains and they offer us
a lot of money to work with them we turn
them down because we have a vision and
our vision is a people based vision and
we want to work with companies that will
transform their cultures that will
produce cultures that people are
inspired to come to work every day and
if I help this company I may help them
drive their numbers but it won’t it help
advance my vision for the short-term
gain of only the money which I can make
somewhere else and if I’m going to tell
my people this is our vision and they
see me make these decisions and I cannot
justify them then what starts to happen
is they start to think that what I was
saying was and then they stop
trusting everything I said
even if I’m saying the right thing
that’s the point our friends are the
same way if our friends only made
decisions based on their own interests
do you think you would trust your
friends right if they would never come
to your house you always have to go to
their house because they’re lazy there’s
no sacrifice there’s no giving
everything is in their interest we
wouldn’t want to be friends with them in
other words as these highly trained and
highly tuned social animals were
constantly evaluating the words the
actions the behaviors of politicians of
executives of our colleagues of our
friends and of companies to determine
whether we can trust them and work with
them we will do transactions with them
but this is where loyalty love and this
is where the infinite game lies it’s the
only way to build an infinitely built
company it has to be built on values on
the intangibles I spent time with the
United States Marine Corps and they talk
all the time they actually say these
words they say the reason the United
States Marine Corps is what it is the
reason its culture is so strong is
because of the intangibles they
literally talk about the intangibles all
the time which are the emotional Banton
the love the vision the standard switch
they hold each other the intangibles we
don’t like the intangibles in business
we love the tangibles which is fine then
you have to be satisfied that when you
run out of the will of the resources to
play you move on right there is no winning the game of business okay
little bit about what I’m working on now
I’m actually writing a new book that’s
completely fascinated me and become
completely engrossed with the subject
it’s all based on game theory in game
theory there are two types of games
there are finite games and there are
infinite games a finite game is defined
as known players fixed rules and an
agreed upon objective like football we
all agree what the rules are at the end
of the game whoever has more points as
the winner and we all go home then you
have an infinite game an infinite game
is defined as known and unknown players
the rules are changeable and the
objective is to perpetuate the game to
keep the game and play when you pit a
finite player versus a finite player the
system is stable football is stable when
you pit an infinite player versus an
infinite player the system is also
stable like the Cold War was stable
because there cannot be a winner or a
loser the goal is to just keep the game
and play and because there are no
winners or losers in an infinite contest
what happens as players drop out of the
game when they run out of the will or
the resources to play and other players
will replace them but the game keeps
going with or without them problems
emerge when you pit a finite player
versus an infinite player because a
finite player is playing to win and an
infinite player is playing to keep
playing so this is what happened with
the United States and Vietnam then
Americans were trying to beat the Viet
Cong and the North Vietnamese would
fight for as long as is necessary and
America found itself necessarily in
quagmire this is the Soviet Union in
Afghanistan where the Soviets are trying
to win and the Mujahideen were fighting
for their lives and necessarily the
Soviet Union find themselves in quagmire
until they ran out of the will or the
resources to play and they left the game
is what happens so if you think about
the game of business the game of
business is an infinite contest there’s
no such thing as winning the game of
business
it doesn’t exist the game of business
has existed longer than every single
company that exists on the planet today
and it will outlast
every single company that exists on the
planet today but if you listen to the
language that most companies use they
don’t know the game they’re playing they
talk about beating their competition
they talk about being number one
based on what agreed-upon metrics
profits revenue market share number of
employees square footage over what
agreed-upon timeframe a quarter a year
three years five years ten years I
didn’t agree to your standards so how
can you declare yourself the winner
how can you declare yourself number one
in other words companies can say
whatever they want if we haven’t agreed
to the standards every single bankruptcy
is a company that is run out of the will
or the resources to play and they drop
out of the game that doesn’t mean the
game ends another company will replace
them almost every merger and acquisition
are when companies declare that we no
longer have the will or the resources to
continue to play by ourselves we have to
merge our resources with another company
so that we can stay in the game in other
words most companies don’t last because
they are playing the wrong game the
infinite players are the ones that
frustrate their competitors so I spoke
at an education summit for Microsoft I
also spoke at an education summit for
Apple at the Microsoft summit I would
say that 80% of the executives spent the
vast majority of their presentations
talking about how to beat Apple at the
Apple summit a hundred percent of the
executives spent a hundred percent of
their presentations talking about how to
help teachers teach and how to help
students learn one was obsessed with
their vision one was obsessed with where
they were going
the other one was obsessed with beating
their competition guesses guess which
one is frustrated in this competition
because the finite player is playing
against its competitors and the infinite
player is playing against themselves the
infinite player wakes up every single
day and says how do we be better this
week than we were last week how do we
perform better
next month than we did this month
it’s a it’s a game of constant
improvement it is totally fine to study
our competition for tactical reasons but
the number of companies that study their
competition for strategic reasons is
scary which means they react
strategically to their competition and
will change entire business models on a
basically on a whim which means the
company has no stability is going all
over the place in other words you’re
wasting time and resources and you’re
frustrating the people on the inside
because they don’t know where they’re
going it’s a constant game of reaction a
long time ago inappropriate of previous
life I used to work at an ad agency and
I was a junior kid and I worked in the
competitive analysis department and I
worked on one of the telco telephone
company clients that we had and my job
was to report to the client on what the
competition was doing now the number of
other telephone companies that existed
in America that day was quite a long
list and we the client couldn’t afford
to study them all so we studied a
handful of them so think about that for
a second they’re studying their
competition but they’re only studying
some of their competition well what
about all the others not to mention the
fact that in the infinite game it’s
usually the competitors we don’t know
about that take us down not the ones we
do know about myspace had no idea that
Facebook even existed until it
completely destroyed their company
because they were so focused on the ones
they do new it did know about it and I
find that fascinating because remember
in the infinite game we don’t always
know who all the competitors are so at
the end of my talk at Microsoft they
gave me a gift they gave me the new Zune
when it was a thing Zune was the
competitors of the iPod and this thing
was gorgeous an absolutely spectacular
piece of technology beautifully designed
the user interface was beautiful it was
intuitive and simple there’s a really
remarkable piece of technology it didn’t
work with iTunes which means I couldn’t
use it which is a different problem but
the technology itself was really quite
sophisticated and quite stunning so
after I got done with my talk at Apple
I’m in the back of a taxi with a very
senior Apple executive sort of employee
number 12 kind of guy
and I decided decided to stir the pot
and I turned him I said you know
Microsoft gave me their new Zune I said
to him and it is so much better than
your iPod Touch to which he responded I
have no doubt conversation over because
the infinite player understands that
sometimes your head and sometimes your
behind and sometimes your product is
better and sometimes it’s not the goal
is not to win every battle the goal is
to outlast the competition you let the
competitor compete against itself and
drive itself down to zero while you’re
out there improving your systems
constantly this is what it means to play
the infinite game and I’ve become
totally fascinated by this because the
companies that frustrate their
competitors the one that seemed
unbeatable the ones that everybody
targets but seems unable to reach
accidentally are playing the infinite
game so in the US Costco frustrates
Walmart but if you listen to Jim Senegal
the founder of Costco he talks about
building a business for the next 50 or
100 years not for the next one year or
one quarter for Wall Street he talks
about the need to take care of his
employees first his customers second his
shareholders third because that’s the
way he will build a long-lasting company
and it is true when we prioritize the
needs of the shareholders which by the
way is the equivalent of a coach
prioritizing the needs the sorry
prioritizing the once of the fans over
the needs of the players
that’s what shareholder supremacy is
that doesn’t build a strong stable team
you may win a game you may even win a
tournament but you won’t build a team
that can win year after year after year
after year Southwest Airlines frustrates
all the other airlines in America
because they’re competing against
themselves they put their employee
number one they put their customer
number two they put their shareholder
number three that is the order in which
you play the infinite game because that
is the order in which you build
stability
but companies that have it in the
reverse order go out of business or are
merged or acquired because they run out
of the will or the resources to compete
by themselves I’m totally fascinated by
this the vast vast vast majority of
businesses don’t know the game that
they’re playing don’t know the game that
they’re in which means we’re all playing
by the wrong rules this has completely
changed the way we do business in our
company where we’ve adjusted and are
adjusting and learning to adjust our
systems for a more infinite scenario so
for example think about how we
incentivize behavior right usually what
we do is we give someone an arbitrary
target to hit usually in an arbitrary
time frame it’s usually a year and the
reason it’s a year’s because that’s when
we pay taxes and we pay taxes every 18
months those would be our arbitrary
dates right but there’s nothing magical
about 12 months it’s arbitrary right so
we give somebody an arbitrary target
sales revenues whatever it is on an
arbitrary date see in a year from now
and if they hit that target
we bonus them and say good job and if
they miss that target we say better luck
next time
right but if we’re playing the infinite
game this is what we started doing we’ve
become more preoccupied with the trend
over the absolute target that they hit
so for example what if somebody’s
building really good solid systems that
are showing really good incremental
growth really stable good solid
incremental growth but by the time we
hit 12 months they’re short they miss
the target you’re damn right I’m gonna
bonus that person because what they’re
doing is they’re building the right
systems that I can see will hit the
target I can see it will hit the target
15 months from now in others we got the
date wrong it’s the date that should
adjust not the other way around
versus somebody who hits the target but
if I go back and look at what they did
and it looks like their performance is
this and they’re stabbing people in the
back and there you know beg barring
stealing dropping the price and doing
whatever it takes to make the sale
because I gotta hit the target gotta hit
the target and on the right day on the
right time we bonus them which is
rewarding them for building an unstable
company the trend matters sometimes it
hits the date sometimes it doesn’t the
dates are there to help guide us to help
set a pace and a tempo but if you’re
running a marathon
and you want to run a four-hour marathon
and at your half marathon you’ve got an
hour and 57 minutes you’re happy but if
you’re 2 hours and 13 minutes you don’t
quit you just got the pace wrong and we
don’t do this in business we put the
date instead of the systems I don’t
understand that we were adjusting even
the way we talk about money has changed
for us so if you look at our P&L we
actually do not have a line on our P&L
that says profit it doesn’t exist
we have a line that says freedom right
because money buys us freedom the
freedom to say no to clients we don’t to
work with the freedom to say yes to
clients we do want to work with but
don’t have any money it gives us the
freedom to take a holiday to pay our
staff better to give it away to support
charities whatever we want to do and
you’re damn right I want more freedom
next month than I do this month then I
have this month yeah damn right and
that’s what money affords us but it’s
all contextualized and what the amazing
thing is it does is it gels the company
together because now our whole team is
working towards the opportunity to give
rather than the opportunity to reward
themselves our team because we’re much
more interested in the systems and the
trend they fight we find that they were
much better helping each other hit goals
and targets because absolutes no longer
get you rewards it’s the underlying
systems which is super stable and for
entrepreneurs we all live with the fear
or at least the acknowledgement that our
companies are very much built on us if
you if you’re the founder it’s my
personality it’s me my idea you know
those kinds of things and if I were to
get hit by a bus the likelihood of the
company closing is very very high that’s
called finally the question is have you
built a company that could survive you
getting hit by bus that the employees
believe in the cause and the vision so
much that the systems are so stable
you’ve built redundancy into the system
that anybody can do somebody else’s job
you there’s at least one person who can
do somebody else’s job that the company
can sales
and the employees would want to keep the
business going without you because they
believe that the cause is big enough
that they would continue without you I
can say with absolute certainty that if
anything would have happened to me my
entire team would continue working they
would continue working to see this
vision that we have come to life and
figure new ways without me I play one
piece in the machine that’s it just one
it might be the most public one but it’s
only one piece and I’m like I said I’ve
become absolutely fascinated by how can
we compete in a game if we don’t even
know what game we’re in and then we drop
out and somebody else replaces us and
nobody’s sorry or nobody nobody calls
you a loser it’s you haven’t lost
anything but you’re not a winner if you
stay in the game either this is
wonderful so the question is how do you
do this what is it require so as is my
nature I have to write things on boards
that’s a joke the so the infinite game
exists up here finite game exists down
here right the infinite game is will
includes the why what I call our purpose
cause or belief it’s the vision of the
company it’s where we’re going it’s
something that we will never practically
reach in our lifetimes or ever but we
will die trying that’s the point right
it’s different from a big hairy
audacious goal which for all practical
purposes you could reach it may be
difficult but you could reach it
this is an ideal something it’s a vision
of the worlds of my vision I imagine a
world in which the vast majority of
people wake up every single morning
inspired to go to work feel safe when
they’re there and return home fulfilled
at the end of the day that is my vision
right we will never practically get
there but we will die trying the United
States was founded with a document
called the Declaration of Independence
in which the document stated all men are
created equal now the United States has
not achieved that and will never achieve
that but it the country is at its best
when we’re trying to achieve that civil
rights women’s suffrage gay rights the
you know universal education universal
health care etc etc this is where our
values exist our values are timeless
they do not change every year whenever
we have a
your teacher off-site and if they do you
have a problem that happens in big
companies every few years a new CEO
comes in and have a values thing and
they change it and they change and they
changed no no your values are your
values right and they’re based on your
founders and they exist from patterns of
how you operate when you are operating
at your natural best when your company
is operating at its natural best when
all cylinders are firing when you’re in
the flow whatever euphemism you want to
use there is a pattern that emerges and
that pattern are your values there’s a
minimum of three there’s no more than
five if there’s more than five there’s
usually redundancy you can find overlap
that you can find lowest common
denominators and they are intractable
these things are inherently intangible
and hard to measure right which is why
they often get brushed aside it’s not
that they don’t exist they’re just hard
to measure then down here you have the
finance what I call the what it’s all
the tangible stuff right things like our
interests exist down here because they
are tangible they are inherently easy to
see and easy to measure like products
sold money taken in things like that
right number of clients we have the way
you build an infinite business is you
want to run all decisions first through
your values and your cause and then
through your interests that’s how it
works so what does a values based
our military to battle they will go into
the battlefield and if they wound a bad
guy we will send our medics onto the
battlefield to pull the wounded enemy
off the battlefield we will put them in
our helicopters fly them to our
hospitals put them in our hospital beds
and our doctors will use our medicine to
nurse them back to health that is not in
our interest but it’s kinda who we are
that’s why there are scandals when we
find out that our military desecrated
dead bodies of our enemies it’s because
it violates our values it makes us upset
to know that our guys did that
that is not in keeping with we say
things like who we are that’s what we’re
talking about right that’s why we do
something that is not in our interest
because it reflects our values in the
United States we had a scandal with
torture right now the reason we tortured
offshore and the reason we tried to keep
it a secret is because we knew it
violated our values if it was well
within our values we would be totally
open about it and we just do it back
home we hide things that we know are
uncomfortable and violate our values in
other words you don’t have to think very
hard about whether this is in our values
or not we know it’s it’s it we know
right now our interests lie down here so
we make decisions every single day right
new client should we take their business
sure they’re gonna pay us a ton of money
take it right new ad campaign what
should we say in it hey we can use
clickbait and we can drive we can drive
sales hard over here and we make all
these decisions based on what numbers
are and we’re making all decisions that
are in our interest and those the
argument we make we make financial
debates and we don’t consider this stuff
right now in a vacuum any one of these
decisions may be just fine but the
problems is when we pull back and we
look at all of our decisions nobody
knows what we stand for because we are
all over the place that is perceived by
employees and as customers by and by
customers as selfishness in other words
as highly tuned social animals which we
are we will perceive this behavior as
not trustworthy and we may do business
with you that’s called transaction but
we’ll never give you our loyalty and we
will never trust you employees are the
same way I will work for you as long as
you keep paying me but I will be open to
other opportunities elsewhere and I will
not give you my best and brightest
because I don’t know that I’m safe here
because you I see the way you make
decisions now if we make values based
decisions means we run all of our
decisions through here first
occasionally we might make less money
than we could have we made that decision
occasionally we make mistakes but what
starts to happen is all of our decisions
start to look mostly consistent and if
you pull back everyone can say aha I
know what you stand for I know what you
believe they use words like authentic or
where they say you have high integrity
or you are of hike moral fiber
character all of these words that we use
to describe people used to describe
companies as well I trust you knowing
very little other than I know how you
make decisions so take us for example
right we work with some very
dysfunctional companies but at the core
the executives who bring us in are
trying to do the right thing
we have been offered to go work with
companies who when we talk to them we
know they only want to use our stuff to
drive short-term gains and they offer us
a lot of money to work with them we turn
them down because we have a vision and
our vision is a people based vision and
we want to work with companies that will
transform their cultures that will
produce cultures that people are
inspired to come to work every day and
if I help this company I may help them
drive their numbers but it won’t it help
advance my vision for the short-term
gain of only the money which I can make
somewhere else and if I’m going to tell
my people this is our vision and they
see me make these decisions and I cannot
justify them then what starts to happen
is they start to think that what I was
saying was and then they stop
trusting everything I said
even if I’m saying the right thing
that’s the point our friends are the
same way if our friends only made
decisions based on their own interests
do you think you would trust your
friends right if they would never come
to your house you always have to go to
their house because they’re lazy there’s
no sacrifice there’s no giving
everything is in their interest we
wouldn’t want to be friends with them in
other words as these highly trained and
highly tuned social animals were
constantly evaluating the words the
actions the behaviors of politicians of
executives of our colleagues of our
friends and of companies to determine
whether we can trust them and work with
them we will do transactions with them
but this is where loyalty love and this
is where the infinite game lies it’s the
only way to build an infinitely built
company it has to be built on values on
the intangibles I spent time with the
United States Marine Corps and they talk
all the time they actually say these
words they say the reason the United
States Marine Corps is what it is the
reason its culture is so strong is
because of the intangibles they
literally talk about the intangibles all
the time which are the emotional Banton
the love the vision the standard switch
they hold each other the intangibles we
don’t like the intangibles in business
we love the tangibles which is fine then
you have to be satisfied that when you
run out of the will of the resources to
play you move on right there is no winning the game of business okay
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