Because there are no winners, players stay in the game as long as they have the willpower

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.

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 players can 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 game at any time, for any reason.

Infinite games have infinite time 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.

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.

My understanding of these two types of games comes from the master himself, Professor James P. Carse, who penned a little treatise called Finite and Infinite Games: A Vision of Life as Play and Possibility in 1986. The more I looked at 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. We can beat out other candidates for a job or 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 of 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 includes the decline of trust, cooperation, and innovation. Leading with an infinite mindset in an infinite game, in contrast, really does move us in a better direction.

The game of business fits the very definition of an infinite game. We may not know all the other players, and new ones can join the game at any time. All the players determine their 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 vary from country to 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 business has no finish line.

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 lives on, 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 business, we call this bankruptcy or sometimes merger or acquisition. Which means that 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 strong enough and healthy enough to stay in the game for many generations to come. The benefits of which, ironically, often make companies stronger in the near-term as well.

Victorinox, the Swiss company that made the Swiss Army knife famous, saw its business dramatically affected by the events of September 11, 2001. In an instant, the ubiquitous corporate promotional item and standard gift for retirements, birthdays, and graduations was banned from our hand luggage. Whereas most companies would take a defensive posture — fixating on the blow to their traditional model and how much it was going to cost them — Victorinox took the offense. They embraced the surprise as an opportunity rather than a threat — a characteristic move of an infinite-minded player. Rather than employing extreme cost cutting and laying off their workforce, the leaders of Victorinox came up with innovative ways to save jobs (they made no layoffs at all), increased investment in new product development, and inspired their people to imagine how they could leverage the brand into new markets.

In good times, Victorinox built up reserves of 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. We think in generations.” This kind of infinite thinking put Victorinox in a position where it was both philosophically and financially ready to face what for another company might have been a fatal crisis. And the result was astonishing. Victorinox is now a different and even stronger company than it was before September 11. Knives used to account for 95% of the company’s total sales. (Swiss Army knives alone accounted for 80%.) Today, Swiss Army knives account for only 35% of total revenue, but sales of travel gear, watches, and fragrances have helped Victorinox nearly double its revenues compared to the days before September 11. Victorinox is not a stable company—it is a resilient one.

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 arbitrary time frames. The true value of an organization is measured by 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 ensure that their employees, customers, and shareholders remain inspired to continue contributing with their effort, their wallets, and their investments. Players with an infinite mindset want to leave their organizations in better shape than they found them. They play to keep playing. In business, that means building an organization that can survive its leaders.