WorkMatters
Published in

WorkMatters

Week 23, 2020

The Infinite Game: Shareholder Primacy, Corporate Longevity, and Leadership Practices.

Photo by Priscilla Du Preez on Unsplash

1. Shareholder Primacy

We’ve lost our way. When Adam Smith wrote the Wealth of Nations back in the 1770s, he thought it self-evident that businesses should serve their customers. But that changed when Milton Friedman arrived on the scene. Writing in the NY Times some 200 years after Smith, Friedman declared that the sole purpose of business was to make money and increase shareholder value. Shareholder primacy quickly became conventional wisdom. And today, we’re left with a financial system obsessed with market share and quarterly earnings reports.

2. Corporate Longevity

In 1986, James P. Carse — Professor Emeritus at New York University — published an essay on finite and infinite games that perfectly encompassed the ideological difference between Smith and Friedman. In this view, Friedman personified the finite mindset; he thought of businesses as a game in which the winner takes all. Smith, on the other hand, had an infinite mindset. He understood you can’t ‘win’ at business just like you can’t ‘win’ at life. Infinite games are open-ended. And the objective is not to win. The objective is to perpetuate the game. The object is to stay alive and continue to serve.

3. Leadership Practices

“We can’t choose the game. We can’t choose the rules. We can only choose how we play.” And if we choose the play the infinite game, says Sinek, we must adopt five leadership practices. And of those five, arguably the most important one is the advancement of a purpose beyond profit — what Sinek calls a just cause. Infinite-minded organizations stand for something. They exist not to create shareholder value but to forward a cause bigger than themselves. And that’s why longevity is so important. The longer you play the infinite game, the further you can advance your just cause.

--

--

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Andreas Holmer

Designer, reader, writer. Sensemaker. Management thinker. CEO at MAQE — a digital consulting firm in Bangkok, Thailand.