What game is your company playing?
In the Game Theory there are two sorts of games every person and every organization in this world plays: the finite and the infinite game. The finite game can be characterized by known players, predefined objective and established rules. It is like any sport — you have a bunch of opponents who act according to the rules of the game and at the end of it there is a winner.
But there is also the infinite game where there can be known and also unknown players, rules will change over time and the only objective there is to keep the game going, to perpetuate it. It is in no way about winning or loosing. It is about outliving your competitors over time.
Let’s look at any business today. What game do they think they are in? Looking at the constant chase after the quarterly results, rankings and becoming number one (whatever that means), it is reasonable to assume they see themselves in the finite game. A game that seems to end every quarter or every year. And they they pick it up again.
Do you truly know your competition?
What many organizations don’t see is that, in fact, they are take a part of an infinite game. You might think you know your competition but there might be another player cooking up some solution that will disturb your status quo. Let’s look at the skiing business. For decades it was the sole way to enjoy your winter activity in the mountains. You could have chosen the free ride skis, the touring skis, the racing skis, but they were all skis. And suddenly snowboard arrived. Out of nowhere. And it has profoundly disturbed the ski business.
Another example is telecommunication. It is a no-brainer that the mobile services are offered by the telecom companies, right? But, in fact, the most attractive offer today is provided by Google not by AT&T or T-Mobile or Sprint. Any business out there might think they know who they are competing against. But this knowledge is as of today. Tomorrow there can, and there will be an unknown player biting at the pieces of their business they might no be able to imagine today.
Change is the new constant
Before Zappos nobody imagined you could have the whole year to return an item that you bought online. Today customers get disappointed and might even decide not to shop with you if you don’t have a reasonable free-return policy. Or let’s consider the unpacking experience. Before Apple package might have been a thing in luxury cosmetics business but no much anywhere else. Today customers expect to have the product they purchase wrapped in a way that more and more resembles gift-wrapping that simply protecting the sent product. Before Revolut customers knew they had to have dedicated accounts for different currencies and they were grumpily agreeing to the extra charges for conversion. Today, more and more of them won’t even think of using the traditional banking services for that anymore. In every single case the rules of the game have changed based on the actions performed by the player many of the companies in these areas didn’t quite expected to see.
Keeping the game going
Dave Snowden, the complexity theory professor from Wales, hit the nail on the head in this respect when he has combined two models: the chasm variation and the S-Curve model into something he called the flexuous curve (or the F-Curve for short). What the model shows is this. Each an every business on the planet goes through the S-Curve: they enter the market, then they hit the chasm. If they survive it, they are up for a rapid growth until they hit maturity and then eventually decline. The chasm on this model can be explained by the dominance of another player on the market who Dave calls, quite appropriately, an apex-predator. But once the apex-predator becomes so convinced they are winning the game, here comes the chance for the new kid on the block to overtake the game, change the rules and go for rapid growth. So, it might very well be that the game for the former apex-predator is lost but the game itself goes on.
The battle before the finite and infinite players
Here’s the interesting thing. If you put two finite or two infinite players against each other the game remains stable. But what happens if you have an infinite player against the finite one? While the finite player is playing to win, the infinite player aims to perpetuate the game itself. As a person who grew up in communist Poland, I have first hand experienced what it meant. Because while the communist government kept on trying to win the game of ruling my country and making everyone listen to the communist party, our underground forces were playing quite a different game. They knew freedom will come at some point, so the goal behind it was to keep the game going until the other player runs out of fuel and influence to keep the game going.
This is exactly the game of business. It started before your company arrived on the market and it will continue long after it is gone. So, there is no winning in this very game. The goal is to keep on playing (and having fun playing) as long as it is possible. Sure, you might keep on striving to be number 1 in this or that ranking over and over again. This is a finite game that you play year in year out. But you might, instead, choose to keep on winning the hearts of your customers over and over again. This is an infinite game in its very essence.
The goal of your infinite game
There is, of course, a number of directions that can be chosen for the ambition for your infinite game. One of them is to deliver remarkable experiences to your customers. It is a basis for an infinite game in its deepest meaning. Due to the positive adaptation and therefore the need to keep on shaping unforgettable memories in your customers’ heads over and over again, it is self-perpetuating endeavor. But there is one crucial element to even begin to play that game: to know which direction you want to go.
You can, of course have a number of finite games in your infinite game. For example, fixing basics so that you stay en par with your competition seems like a finite game starting over and over again. But the way to stay different in the perceptions of your customers you need to align yourself, your resources and your decision making process along the goal of your infinite game. In that way you will create a competitive advantage that truly distinguishes yourself from your competition in a way that is not easily copy-able. So, in the deepest sense you will become your own biggest competitor. Look at the exceptional companies out there: Zappos, Tesla, Southwest Airlines, Harley Davidson — they are not competing with others. Not really. Their game is with their past selves and past selves only. And the success is not measured quarterly. It is measured in years if not decades.
This is why for an infinite player it is not that important to be first every single day and with every product. They play to be loved in the long run by knowing why they do what they do, and where they are going. Because you will sometime be ahead and sometimes behind. So, it is crucial to keep on thinking: — how can I make my experience better than yesterday? How else can I convince my customers to tell the stories about me that reflect what I try to achieve? I bet that once you choose to play the infinite game you will find yourself ahead more often than you would expect. Because this game is not about winning each single battle and scoring each point. It is about building long-lasting trust and loyalty in your customers. Drip by drip. To play long enough so that your competition stays behind and eventually drops out of the game.
The trick of such an approach is this: if you choose to play an infinite game of winning the hearts of your customers you will take radically different strategic decision from your competition that sticks to the finite game of winning this or that ranking. And maybe not immediately but the difference will become noticeable over time. Because you will not be going against something. You will be standing for something. Does it mean that you shouldn’t look at the competition at all? Not in the least. It is worthwhile to remember that what your competition does is to reveal to you your weaknesses. It is, in a way, your sanity check.
But first and foremost you need to choose which game you are in. Once you know that, choose what the ultimate goal of your game is: your own experience vision. Next, decide what winning or loosing means by knowing how to measure your progress by looking at the stories your customers tell about you. And finally, keep a flexible playbook so you are able to adjust your course of action based on what your customers dream about.
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Aga Szóstek, PhD is an experience designer with over 19 years of practice in both academic and business world. She is an author of “The Umami Strategy: stand out by mixing business with experience design”, a creator of tools supporting designers in the ideation process: Seed Cards and the co-host in the Catching The Next Wave podcast.
