Authentic Accountability

Management is a finite game; leadership is an infinite game.

There are at least two kinds of games. One could be called finite, the other infinite.

A finite game is played for the purpose of winning; an infinite game is played for the purpose of continuing the play.
    - James Carse, Finite and Infinite Games

At a medical device company in February of 2009, I was facilitating a leadership development program for high potential leaders. The program includes a computer-based simulation allowing teams of participants to learn business acumen and general management skills by operating a simulated technology company over three quarters compressed into three days. A participant having just learned about the financial objectives for the simulation asked in a very direct way, "What does it take to be the winning team?  While everyone enjoyed a cathartic laugh, grateful that someone blurted out the question on everyone’s mind, I was having an internal debate about how to respond.

Perhaps because I’d been preoccupied with thoughts about the state of our global economy, I summoned up the courage to confront, rather than deflect the question. "What does it take to win?" I repeated, "I guess that depends on which game you're playing. To win the finite game, you’ll need to end up with the highest market share, most significant increase in customer satisfaction and deliver at least 25 percent pre-tax operating profit by the end of the third quarter." At this point, it seemed to me that most of the participants felt satisfied by the answer, but I was just getting warmed up.
    
"On the other hand," I paused dramatically; "You can choose to participate in the simulation as an infinite player. If you choose to play the infinite game, winning becomes irrelevant." A few eyes started to roll. Others seemed genuinely confused by the suggestion that winning might be irrelevant. I ignored the reactions and soldiered on. "Instead, you’ll be focused on how to integrate what you learn over the next several days back on the job. You’ll experiment with the variables of a complex business without worrying about real-world consequences, other than a bruised ego, when we compare each team’s results. You’ll resist the temptation to slash costs before the final round and instead, attempt to create lasting value through innovation even if your decisions don’t pay off by the time we stop tracking results." I wondered if anyone else in the room had made the connection between treating the simulation as nothing more than a system of variables to be optimized and treating our organizations and our financial markets as nothing more than a system of variables to be optimized. The participant who had asked the question in the first place raised his hand again. I called on him expectantly, "Did you say 20 or 25 percent pre-tax profit?"

School as a Finite Game and School as an Infinite Game
Lately I’ve been thinking a lot about how much Carse's elegant dialectic explains our behavior and approach to a great many things. Early in life we figured out that people with power and authority are keeping score on us and they reward us based on the measure of our achievements. How we value the rewards that others have the authority to dole out has a lot to do with whether we participate as finite or infinite players.
    
As students, for example, we play the finite game of school when we focus our attention on the goals created by those with the authority to write the rules and define "winning." Our energy is directed towards completing coursework, competing for the highest grade point average, comparing test scores against the other players and getting into the right schools. Infinite play, because it strives to perpetuate itself, means we focus on the process of education rather than the outcomes. We follow our curiosity, become life-long learners and intentionally seek out opportunities to start new subjects or pursue new lines of inquiry. The finite player in the education system focuses on finishing each game (this course, that school) with the best scores. The infinite player in the education system focuses on how to extend education beyond the formal passages from one level to the next.
    
A student who ignores the rules of the finite game never graduates. He has no desire to cross a finish line. He drifts from subject to subject. He follows his curiosity, but stops short at the difficult hurdles because he sees no value in surmounting obstacles to satisfy someone else’s definition of success. It seems that we can’t abandon the finite game completely if we want to be productive citizens.
    
On the other hand, a student who loses touch with the infinite game sees his or her curiosity atrophy. Throughout the semester, the obsessively finite player asks, "Will this be on the final?": code for "Do I have to pay attention to this?" In the end, an exclusive focus on what it takes to complete the class renders everything else about the subject irrelevant. The finite student-player leaves school with a winning G.P.A. and no ability to interpret the complexities of the world, to think creatively or analytically when faced with a challenge or to deal effectively with change. Eventually, the student who overemphasizes the finite game of school loses the capacity and motivation to learn; "Why should I keep learning if my mastery of a subject is not being measured or rewarded?"

Work as a Finite Game and Work as an Infinite Game
In the context of performance management, contrasting the perspective of work as a finite game and work as an infinite game amounts to defining what it means for someone to be successful. Business has been genetically encoded to equate success with measurable outcomes and winning. We compete for market share. We participate in well defined time periods: months, quarters, and fiscal years. We create goals and measures so that we can compare, contrast and rank individuals, groups and organizations.
    
It may seem sacrilegious, or at least nonsensical to suggest that in business success might be something other than winning. With all due respect to Vince Lombardi, winning is not the only thing. It makes for great locker room speeches, but surely Lombardi wouldn’t choose to play a season against say, only high school football teams, in order to guarantee a win. Even in professional sports, arguably the most finite of finite games, elements of the infinite game penetrate like willful blades of grass through cracks in the sidewalk: The joy of being pushed to play beyond your capability, the experience of a cohesive team effort, the connection to an activity that you once played for the sheer pleasure of it.
    
Businesses exist, according to conventional wisdom, to generate a profit. If profit making defines the activity of business, we shouldn’t be surprised by the ascendancy of scorekeeping as the gauge of success. Interestingly enough, the father of management theory Peter Drucker, believed that  'The purpose of a business is to create and keep a customer." Drucker’s definition, hints at the possibility of an infinite game beneath the surface of the concrete profit and loss statement. Creating and keeping customers, after all, is an activity that perpetuates itself.

How Winning the Finite Game can Undermine Authentic Accountability
We crave employees who "act like owners" or demonstrate an "entrepreneurial spirit," so we align business goals with compensation; a definitively finite way to play. We define winning with measurable outcomes within a fixed time frame and then release the players to do whatever it takes. We expect them to play by the rules, but we’re mesmerized by the scoreboard and occasionally miss attempts to 'leverage" the rules on behalf of improving the score; if it doesn’t say you can’t, then you can, right? Interestingly, our attempt to increase accountability by linking rewards with results actually undermines our desire to create a culture of entrepreneurship and ownership. Instead, our judgment gets disabled by an unconscious myopia that makes deceptive accounting practices and loaning money to unqualified borrowers seem like reasonable ideas.
    
Real entrepreneurs, it turns out, are driven by passion and persistence; two stubbornly immeasurable traits. Of course, entrepreneurs want to "put points on the board." The difference is that the final score for the entrepreneur isn’t the end of the game; it’s the jumping off point to see what more is possible. To the infinite player, the score provides data about progress and potential. Even when it’s working perfectly, a performance management system that focuses on finite goals, limits your organization to what’s expected and dooms your leaders to apply their energies to what someone else wants of them. We breed leaders who are passionate about winning, not about playing. We breed leaders who wait for others to define success for them. We breed leaders who are persistent until they can blame someone or something else for coming up short. While we decry a general lack of accountability, we simultaneously create dependence by limiting the field of play and narrowing the definition of success. Over twenty years ago, Peter Block, in The Empowered Manager, made a similar point by contrasting the "Bureaucratic Cycle" and the "Entrepreneurial Cycle." Block wrote, "In many ways, organizations unintentionally encourage people to choose to maintain what they have, to be cautious and dependent."

Managing Infinite Players, Leadership in the Infinite Game
It’s not just that our compensation and performance management systems are inefficient and ineffective; they actually punish the infinite player who is the true entrepreneur and reward the finite player who won’t make a move until he or she knows whether the move will pay off. Suddenly, we look around in amazement that no one takes initiative or demonstrates any accountability. To whom or to what would we have them be accountable? The truly accountable workers are playing the infinite game; they don’t look to their managers to impose the rules and criteria for winning. The truly accountable, infinite players will naturally choose to do what's in the long term interest of the business, because they place a higher priority on continuing play than on winning.
    
Reawakening our inner infinite player requires an understanding the characteristics of infinite performance as distinct from the characteristics of finite performance.

Here’s the good news: you don’t need to incent the infinite player. Here’s the bad news: you can’t incent the infinite player. Infinite play naturally occurs when leaders unleash the potential of people whose work makes a meaningful difference in the world.

Conclusion: Lead Infinitely and Manage Finitely   
Infinite players who ignore the finite attributes of the game may never realize their full potential. Obsession with the infinite game becomes quixotic. Any level of performance satisfies the leader who over-emphasizes the infinite game. The mantra of the leader who refuses to step into the arena of the finite game is "que será, será."
    
Management is a finite game; leadership is an infinite game. We count on leadership to temper the attitude of "win at all costs" with gentle reminders of the nobler pursuits. If we allow leaders who are obsessed with the finite game to run our businesses, we shouldn’t be surprised that they expend their innovative energies on ways to tinker with the scoreboard instead of inventing new ways to play the game; and when the stadium clears, we’re left bankrupt in more ways than one.