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Building Versus Buying

I’ve finished reading a fantastic three part series about the history of ARM written by Jeremy Reimer for Ars Technica. Here is a quote from the end of the series:

But the key to Saxby’s management approach was simple yet uncommon in the business world: ARM grew because it helped others grow. It treated its employees more like people and less like human resources, giving them chances to learn and succeed along with the company. “I’m a great believer that in any team,” he told me, “any member is better at something than somebody else, so to get the team to perform you want everyone to perform on their best axis. Teams that work well together work better.” He emphasized the importance of being honest with employees and not overpromising what the company had to offer.

The above resonates with me because the company I hired in to out of college, Electronic Data Systems, had the same business model, treat employees in a similar manner, and had success. Unlike ARM, EDS went through several different owners (GM, HP, HPE, CSC/DXC) and CEOs and each change moved further from the founding vision to the point at which it no-longer really exists.

The story also calls to mind The Infinite Game by Steve Sinek. Using Reimer’s comparison of ARM and Commodore, ARM was playing the infinite game, Commodore the finite game. In the book Sinek describes the reletively few businesses playing the “infinite game” versus the vast majority playing the “finite” game. He writes:

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.

Having been hired by EDS and surviving through the multitude of transitions that has occurred, I have seen first hand the differences a building a company, which usually has a founder, and buying a company, which usually has a manager. In most cases bought companies are separated from their founding, has no leadership and thus no culture.

It amazes me that given all the evidence of how to achieve long term success, such as ARM’s, that so few U.S. companies are interested in the infinite game. The finite game rules business, thus it rules capitalism, and given relationship of capitalism to the United States, the finite game rules the U.S. I don’t think prospects will change in the United States until we find leaders who are builders, right now our political, economic, and religions cultures appear to all be playing the finite game.

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