In January of 1968, the North Vietnamese Army launched a surprise attack against the Americans. This was the Tet Offensive. Tet is the celebration of the Lunar New Year, and there was a tradition in Vietnam that had gone on for decades, that there was never any fighting on Tet.
And yet in 1968... The North Vietnamese generals decided to break with tradition with the hope that they could surprise the Americans, overwhelm them with force, and bring a swift end to the Vietnam War. They attacked over the course of the war.
over a hundred and twenty five targets across the country with over eighty five thousand troops now here's the amazing thing the united states actually repelled every single attack every single one and at the end of most of the major fighting which was after about a week the united states had lost fewer than a thousand troops the north vietnamese lost thirty five thousand of the eighty five thousand troops and if we look look at the Vietnam War as a whole, we see that America lost 58,000 men and North Vietnam lost over 3 million people. And a close examination also reveals that America actually won nearly every major battle it fought. So it raises a very interesting question. How do you win all the battles, decimate your enemy, and lose the war? It raises new questions about how we understand the concept of winning.
Winning and losing. James Carsey, a theologian from NYU, wrote a little book called Finite and Infinite Games in which he talks about games and how we play them. Basically, if you have at least two competitors, you have a game. And there are two types of games. There are finite games and there are infinite games.
Finite games are defined as known players, fixed rules, and an agreed upon objective, like football. We all agree what the rules are. We all agree whoever has more points at the end of the game is the winner.
The game concludes 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 in play. When you put a finite player versus a finite player, the system is stable. Football is stable. When you put an infinite player versus a finite player, the system is stable. infinite player versus an infinite player, the system is also stable.
The Cold War was stable because we cannot have a winner or a loser, and so we both keep playing until one of the players runs out of the will or the resources to keep playing, and then they drop out of the game. Problems arise, however, 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, and they make very... different strategic choices and invariably what happens is the finite player finds themselves in quagmire.
They find themselves frustrated and running through the will and resources required for them to stay in the game. And this is what happened to American Vietnam. America was fighting to win and the North Vietnamese were fighting for their lives.
A very different set of strategic choices were made and it's not so much that America lost, it's that they ran out of the will or the resources. to continue to stay in the game and so they dropped out. So this gets me thinking.
There's no such thing as winning global politics. There's no such thing as winning governance. And there's definitely no such thing as winning business.
But when we listen to the language of too many leaders, they don't know the game we're in. They talk about being number one or being the best or beating their competition. Based on what?
Based on what metric? Based on what time frame? These are infinite games and when we play with a finite mindset in an infinite game, there's a few very predictable things that happen. Trust declines, cooperation declines, innovation declines and eventually we run out of the will or the resources to play and in business we call this bankruptcy or merger and acquisition. So I had a real-life experience that helped me see the difference between a finite player and an infinite player.
I spoke at an education summit for Apple. I also spoke at an education summit for Microsoft. At the Microsoft Summit, I would say 70 to 80% of the executives spent the majority of their presentations talking about how to beat Apple.
At the Apple Summit... 100% of the executives spent 100% of their presentations talking about how to help teachers teach and how to help students learn. One was obsessed with where they were going.
One was obsessed with the vision. The other one was obsessed with beating their competition. Guess which one was in quagmire? Guess which one was wasting will and resources? 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. The Zune was Microsoft's response to the iPod. And this little piece of technology was absolutely spectacular.
It was brilliant. It was beautifully designed. It was elegant. It worked flawlessly. interface was intuitive.
So at the end of my Apple talk, I'm sharing a taxi with a senior Apple executive, employee number 54 to be specific, and I couldn't help myself. I had to stir the pot. And I turned to him and I said, you know, Microsoft gave me their new Zune.
It is so much better than your iPod Touch. To which he responded, I have no doubt. And the conversation was. was over.
Because the infinite player understands sometimes you have the better product and sometimes they have the better product. And sometimes you're ahead and sometimes you're behind. And the goal is not to win, the goal is to outlast.
And the only true competitor in the infinite game is ourselves. The goal is to make our systems better this year than they were last year, to make our governance better this year than it was last year, to make our culture stronger this year than it was last year. to make the quality of our relationships and the level of trust better than it was last year.
That's the goal of the infinite player, to outdo themselves. So this all raises a very interesting question. If too many leaders are leading with a finite mindset, and the reality is so many of these games that we're actually playing are infinite games, that means we have to learn how to change the way we lead to lead for the game we're actually in. So I've boiled it down. it down to five things of how to lead in the infinite game.
We need to have a just cause. We need to have trusting teams. We need to have a worthy rival. We need to have a capacity for existential flexibility.
And we need to have the courage to lead. Just cause. A just cause is a cause so just, we would be willing to sacrifice our interests in order to advance that cause. That could mean taking a job for less money because I believe in what we're doing here. It happens very often that we're doing something we believe in and someone wants to bring us to their company and they think that simply by showering us with money we'll leave.
But when we believe desperately in the work that we're doing, we easily turn to God. down the better salary. That's a sacrifice in order to be a part of something we believe in. Maybe working late hours or frequent business trips being away from our families.
We don't like these things but for some reason it feels worth it. It feels worth the sacrifice to be a part of something larger than ourselves. And every leader with the capacity to lead for the infinite game offers their people a sense of just cause. Steve Jobs famously believed that the individual should stand up to Big Brother. It wasn't about computers per se.
It wasn't about design. But he saw the computer as the perfect tool to empower individuals to stand up to the status quo. He imagined a world in which one day one person with a computer could compete against a corporation.
Well, that's the world we live in today. This is what his just cause was. And all the people who believed...
in that kind of individual power were drawn to Apple, they wanted to work there, and they wanted to buy from Apple. It's not an accident that creative people and young people were so drawn to the brand. They like the idea of standing up to Big Brother, standing up to the status quo.
We must give our people a sense of just cause, a cause so just they would be willing to sacrifice in order to advance that infinite ideal, a vision of the world that does not yet exist. Number two. We have to have trusting teams. I was on a business trip in Las Vegas, and they put me up at the Four Seasons. Beautiful hotel.
And one of the reasons it's a beautiful hotel is not simply because of the fancy bed. Any hotel can buy a fancy bed. It's because of the people who work there.
That when they say hello to you, you get... the distinct sense that they wanted to say hello, not that they were told to say hello. We're highly attuned social animals, we can tell the difference. They happen to have a coffee bar in the lobby. And so one afternoon I went to buy myself a cup of coffee.
and the barista working that day was a young man named Noah. Noah was funny. He was engaging. I enjoyed buying a cup of coffee from him. I stood there for far too long buying a cup of coffee just because I enjoyed talking to Noah.
So as is my nature, I asked Noah, do you like your job? And without skipping a beat, Noah says to me, I love my job. Now, in my line of business, that's significant.
Like is rational. the people, I like the challenge, I get paid well, I like my job. Love is emotional.
It demonstrates an emotional connection to whatever we're doing. Do you love your wife? I like her a lot.
It's a different standard, right? Noah said, I love my job. So immediately, I'm interested. So I follow up. I said to Noah, tell me specifically what the Four Seasons is doing that you would say to me, you love your job.
And again, without skipping a beat, Noah said that throughout the day, managers will walk past him and ask him how he's doing. Ask him if there's anything that he needs to do his job better. Not just his manager, any manager.
And then he said, I also work for a different hotel. And there, the managers walk past me and catch me if I'm doing something wrong. There, they're always overbearing and trying to make sure that I make my numbers. He said, He says, there I just like to get through the day, keep my head below the radar, and just collect my paycheck. He said, only at the four seasons do I feel I can be myself.
This is the exact same human being, and yet the level of performance will be completely different, not because of him, but because of the leadership environment in which he's working. I get this question all the time. Simon, how do we get the most out of this?
out of our people. They're not a towel that we wring them to see how much we can get out of them. The question is flawed.
The correct question is, what environment do I have to create? What do I have to do to help my people work at their natural best? That's called leadership.
And when we can create a trusting team, teams in which people feel trusted and trusting, what will happen is it makes them feel safe enough to raise their hand and say, I made a mistake. Or, I'm having trouble at home and it's affecting my work. Or, you've promoted me to a position that I don't know what I'm doing and I need more training. Or, I need help or I'm scared.
If we do not have trusting teams, what we have is a group of people who show up to work every single day lying, hiding, and faking. They hide all of the mistakes for fear of getting in trouble. They won't admit that they don't know what they're doing for fear of getting in trouble.
that they'll be humiliated. They're certainly not going to say that they're scared or that they need help for fear that it will somehow reduce their value inside the organization. And eventually, things will compound and break. We've seen what happens.
I know you've seen the news a few years ago when United Airlines dragged one of their customers off the plane with a broken nose, broken teeth, and a concussion. I feel sorry for every person who works on that plane. I feel sorry for every person who works on that plane. for the crew because every single one of them knew that that was the wrong thing to do and yet none of them intervened because they feared getting in trouble or breaking the rules more than doing the right thing. This was not an anomaly.
This did not happen overnight. It was not that crew. It was the culture in which that crew works.
I had an experience many years before that started to show the the evidence. I was waiting to board a United Airlines plane on a business trip, and I witnessed a scene play out in front of me where one of the passengers attempted to board the plane before their group number was called, which as we all know is a serious crime. And that's exactly how the gate agent treated him.
Step aside, sir. I haven't called your group yet. Please step aside and wait till I call your group, is how she talked to a paying customer. So I spoke up.
I said, why do you have to talk to us that way? Why can't you talk to us like we're human beings? And she looked me in the eye and said, Sir, if I don't follow the rules, I could get in trouble or lose my job.
All she revealed to me is that she was more concerned about herself than she was about her customer, is that her leaders don't trust her to do the job for which she's been trained to do. She has no agency or control over the job that she does. And guess who suffers? Customer and company.
The reason we like flying Virgin Atlantic or Southwest Airlines or Emirates or any of these other airlines is not because they have some magical formula to hire the best people, it's because the people who work there feel like they have agency, that they have the power to do their job the way they've been trained to do it and make the right decisions. And guess who benefits? Customer and company.
To keep playing in the infinite game, we have to have an environment in which people feel trusted and trusted. trusting, they feel that we trust them and they trust us back. That is the responsibility of leaders.
Leadership is not about being in charge, it's about taking care of those in our charge and creating a place in which they can work at their natural best and they will offer us their best ideas, they will take risks, they will solve problems, they will work together, it's a magical thing. Number three, you have to have a worthy rival. There's somebody else who does that, who does that, who does that, who does that, who He does what I do.
He writes books. He gives talks. His work is extremely well respected.
I am a big fan of his work. I also happen to hate him. It's nothing personal.
He never did anything bad to me. It's just how I feel. I hate him.
And I will check my book rankings on the Internet, and then I'll immediately check his book sales. And if mine are ahead, I feel smug. And if his are ahead, I feel smug. I feel angry.
So one day we were invited to speak on the same stage together. And I don't mean him in the morning and me in the afternoon. I mean actually together. We would be interviewed on the stage together. And the interviewer thought it would be fun if we introduce each other.
So I went first. And I looked at him and I said, You make me very insecure. All of your strengths are all of my weaknesses. And when your name comes up, it makes me uncomfortable.
And he turns to me and he said, Funny, I feel the same about you. The reason I hated him was nothing personal. It's because he reminded me of my weaknesses.
And it was easier for me to take that energy and put it against him and be competitive than it was to take a hard look at myself and see where I can improve. and that is the value of a worthy rival. By the way we're best of friends now I stayed at his house I think he's great. It was a cathartic experience. But that is the value of a rival.
Our rivals are the people who are at the same time as good or better than us at our own work. And their mere existence reveals to us our weaknesses. And the goal is not to try and beat them.
The goal is to take a hard look at ourselves and see where we can improve. Competition is about winning, but rivalry is about advancing. If we have a competitive attitude, then all we want to do is win the game, which means it's like two runners, and one will trip the other one in order to win.
Yes, they will win the race, but they're still a slow runner. It's better to lose the race today and become stronger and stronger and stronger and stronger and wish them the best of luck. And your rivalries can change depending on how well you do.
In the early days, IBM was Microsoft's worthy, was Apple's worthy rival rather. Apple were the pirates and IBM represented the Navy. And then IBM fell out of the game.
And then it was Microsoft that represented the Navy. I'm a Mac. I'm a PC. and then Microsoft fell out of the game.
And now it's Google and Facebook that represent the thing that they stand apart from that helps us understand our own identity. Who are your worthy rivals? They can be individuals, they can be organizations, they can be nation states, people we admire and push us to be better versions of ourselves. Next, you have to have the capacity for existential flexibility. What does that mean?
So, Apple had already come off the success of the Apple I and the Apple II. It's already a huge company, it's already very famous and successful, and they're working on their next big project. And then, coincidentally, at that time, around 1981, Steve Jobs and some of his senior executives went on a tour of Xerox PARC. And there, Xerox showed them an innovation that they... had come up with called the graphic user interface.
And it would allow us to use a mouse to control the cursor on the screen to click on folders and move them around to use the computer. Prior to that, you had to use you had to know a computer language like DOS. And remember Steve Jobs'vision, remember his just cause, which is to empower the individual to stand up to the status quo. And when he saw this amazing innovation called the graphic user interface, he immediately saw that this was a way more powerful way to get more people to use a computer, because it was so much simpler and easier to use. So as they're leaving Xerox, he says to his people, we have to invest in this.
And his people say, we can't. One of the voices of reason said, Steve, we can't. We've already invested countless man hours and millions of dollars in an entirely different strategic direction.
If we reinvest in the graphic user interface, we will blow up our own company, to which Jobs actually said, better we should blow it up than someone else. That decision was the Macintosh. A computer platform. so profound that the entire software of Windows is designed to work like a Macintosh. It literally changed the world and the reason we all have a computer at home and at work is because they're so easy to use.
That's existential flexibility. It's the ability to make a profoundly different strategic shift because we find a better way to advance our cause. And even if we have invested in one direction, this is better.
And for the person who makes the existential flex, to the outside world, it'll look like you're crazy. Why would you abandon something that's working? But to the person who makes the existential flex, because they're so driven by cause, they perceive the risk as staying in the path that they're on.
That it is a much smaller risk. It's the obvious thing that they have to do to adjust. Kodak did the opposite. George Eastman, the founder of Kodak, had a just cause about democratizing.
and everything the company did was about making photography simpler and simpler and simpler. And in 1975, the company invented the digital camera. And they suppressed the technology for fear that it would cannibalize film sales.
They knew that they had about 10 years before someone else would figure it out, and over the course of those 10 years, they did nothing. And sure enough, more companies started to introduce digital technology. In fact, Kodak made billions of dollars from the... royalties they got from their patents for the digital technology and when those patents ran out they went bankrupt.
Because if you're not willing to blow up your own company the market will blow it up for you. Existential flexibility is the capacity to make a significant strategic shift because you find a better way to advance your cause and only infinite players have that capacity which means everybody else runs out of time and money. Finally, you have to have the courage to lead.
Everything that I've I've told you today is unbelievably difficult. To be cause-driven in a world where all of the pressures on us are short-term is incredibly difficult. For those of you who work in government, you're not as used to being short-term oriented. It's more long-term oriented, and it is about serving the greater good. But for business, all the pressures from Wall Street, all the incentive structures are all about near-term, near-term, near-term.
And I would contend that one of the reasons government and business sometimes struggle to be short-term oriented struggle to actually work well together is because one is thinking extremely long term and thinking about the greater good and the other is thinking extremely short term and thinking what's good for me. And the problem is those are different attitudes of working together. And in my experience, government keeps looking to business to learn how to do things and I would challenge businesses to start looking at government to learn how to do things.
That maybe a long term mindset and thinking about how we devote our lives to a life of service which can still be... extremely profitable. The most infinite organizations are some of the most profitable. Apple, Southwest Airlines, Patagonia, Virgin.
These are incredibly infinite thinkers and they're some of the most profitable companies in their industries because of their cause, because of their teams, because of their ability to innovate. This takes tremendous courage to lead in a way in which the vast majority of people are leading in a different way. It's about challenging conventional mindsets about leadership.
Which all raises the final question, what does it mean to live an infinite life? Clearly, our lives are finite. We're born, we die.
But life is infinite. We come, we go, and the game continues with us or without us, which means every single one of us has the choice of how we choose to live our lives, how we choose to lead our organizations. We can lead with a finite mindset, try and make more money than our friends, try and get ahead faster than everybody else. else, trying to achieve more power than anybody else, and when we die, we take none of it with us. But the choice to live an infinite life means we choose to build an organization that will be better off because we work there.
We will leave it in better shape than we found it. It means to be the kind of friend and leader to others that they will be better because we were in their lives. It means we will literally live on beyond ourselves. It's just a choice whether we choose to live with an infinite life.
an infinite mindset or a finite mindset. Thank you very much.