The Power of Playing the Long Game

We live in a world of T20s, quarterly results, “get rich quick” schemes and overnight successes. We glorify speed, we obsess over daily metrics, and track our steps and heart rates each day. We love things that give us an adrenaline rush. The press makes heroes out of the twenty-something founders that raise money at a high valuation in under two years of existence!

In all this, we miss the fact that progress and success come from doing something consistently for a very long period of time – and most times it happens with little fanfare or media commentary. Much of Warren Buffet’s life may have been boring to track if seen on a year-to-year basis, given 99% of his wealth was earned after his 50th birthday! But, in seeking excitement we may lose the valuable lessons from a well-lived life like his.

I first started thinking about the long game when I read about the origin story of the Guinness brand. It started in 1759 when Sir Arthur Guinness signed a lease for the St. James’s Gate Brewery, Dublin. What blew me away was that he signed a lease for the brewery for 9,000 years – what’s even crazier is that he did so at the age of 34, which at that point in time, was in the top range of the average life expectancy of anyone living in Europe. The legacy he left behind after his death in 1803 has resulted in one of most iconic brands and a company that has truly endured. Guinness merged with Grand Metropolitan to form Diageo in 1997, 238 years after its founding, but the core business is still going strong centuries after it started. I wondered what prompted someone to think so long-term. What advantages are there in playing the long game? What detracts us from thinking long term and what can we do about it? In this article, the first in a three-part series, I try to address the why and the how of playing the long game for companies and individuals.

Why play the long game?

The short answer is because it gives us the much-needed edge in a world that is so obsessively focused on the short-term. Playing the long game is like playing with a different set of rules that give you an advantage; one where the short-term scores don’t matter and one where you are not actually competing with people or companies that the world might otherwise compare you with. Whether it is companies or individuals, if you want to achieve something defining and large, I believe the only real way to do this is to play the long game – because the real big goals need time to achieve. If you reach your goal in a short time, you have to ask yourself if it was big enough.

1. Doing what’s right vs. what’s convenient: When we focus on the long-term, doing the right thing becomes a lot easier. This is because a long-term orientation subdues our enthusiasm for short cuts and patch work. It makes us question the longevity and durability of the outcomes from the decisions we take. For example, a company CEO might wonder whether they should cut prices to increase sales or invest in the product to improve value. A question like this is best answered with a long game mindset.
2. Getting better at decision-making: When we think of life in the very long-term, we can ask ourselves, “Will I be proud of this decision in 10 to 20 years?” or “Will this decision be one of the few important decisions in my life as I look back?”. Such questions give us perspective and allow us to contextualise the criticality of a decision. This helps reduce stress, and also combat the desire to win the small battles vs. focussing on the larger war. We don’t need to win every point or score every ball to win the match when playing a long game.
3. Building judgement: They say, at birth we look like our parents; at death we look like our decisions. Our company’s position or our own life is a compounded outcome of the many decisions we take, and no matter how analytically sound we are, our judgement only improves with time and by matching more patterns through experience. We can be knowledgeable in the short-term, but can only be wise in the long-term. Playing the long game ensures you play as a wiser person over time, and as a result the game gets easier and you improve your chances of success.
4. Building trust: Trust becomes an important currency for success when we play the long game. In a fast and highly urbanised world, companies and people can play foul, and get away with it once in a while. In a short game, words may win over actions, but in a long game you have the time to observe actions vs. words. In the long game, the reasonable and trustworthy win vs. the unreasonable and the glib – because over time people concentrate on fewer and higher quality relationships. If you are the honest and reasonable type, playing long works to your strengths.
5. Investing in innovation: Short-term pressures often prevent investments in innovations that have a longer payoff. We are wired to discount outcomes hyperbolically, which means we make poorer short-term trade-offs and do not invest in the things that could have sizeable outcomes in the long-term. For individuals, this is akin to not investing in learning future skills because of tough short-term trade-offs on time.
6. Letting serendipity work for you: In short games, there can be the significant impact of one-off events that put you on the losing side – think of that tailender in a T20 who connected a few swings to the fence to take their team to an unlikely win. If you play a long game and keep at it consistently, you allow for real skills to shine and also increase your serendipity sphere while reducing impact of one-off negative events.
7. Making compounding do the magic: Albert Einstein referred to compounding as the eighth wonder of the world, yet this concept is still poorly understood – our brain is just not wired to understand non-linearity. But in life, wealth, luck, wisdom, relationships – all the good things – do compound. As Charlie Munger said: “The first rule of compounding is to not interrupt it unnecessarily.” Playing the long game allows compounding to do the work for you without interruption once the base is set!
8. Building responsibly: When people play the short game, we see the tragedy of the commons at play. Playing the long game focusses us on building responsibly because we care for the long-term, as we believe we will exist to see it and would rather not contribute to our own future being bleak. We may even be forced to think more about the impact of our choices beyond our generation and our immediate family and friends.

Finally, if you play the short game and win at the risk of relationships or quality, you still lose. You will have to find the next game to play and, more importantly, people to play it with! Playing the long game allows you to play infinitely, assuming you like to! It’s the long game we play that helps us move mountains. It’s the long game that tests character. It’s the long game that celebrates the journey vs. the destination. In the next part of this blog, we will see why it is so hard to play the long game and how we can construct our companies and lives to orient towards it.

Recommended Reads

Here are three articles I read over the last few weeks that I found interesting.

Scientists Reversed Aging in Mouse Brains With Poo Transplants From Young Mice. It may be hard to accept that the fountain of youth may be achieved through a fecal microbiota transplant, but that’s exactly what has been recently established in a study with mice as subjects. Scientists showed that after an implant transplant from young mice, old mice were able to find a hidden platform in a maze faster. We are not mice and this isn’t tested in humans yet, but these studies increasingly point to the role of a good diet!

The Jessica Simulation: Love and loss in the age of A.I. This article by Jason Fagone is a fascinating and maybe a bit disturbing read of our lives in a world of possibilities that AI offers. This long read reports on Joshua Barbeau’s experience with a GPT-3 based chatbot service called Project December, which he used to simulate his dead fiancé Jessica. There are transcripts of multiple chats between Joshua and Jessica (bot) which makes this a very interesting read.

Neeraj Chopra and the Physics of Making Javelins Go Faster, Higher, Stronger. This article, published in The Wire Science, explains what it takes to use science to improve human performance and how coaches meticulously help their athletes achieve peak performance. Along the way, the author explains why Neeraj’s coach Uwe Hohn’s world record throw of 104.8 meters will never be beaten (not unless something changes again!).

If you have time for a longer read, here are three books I’d like to recommend

Siddhartha, by Hermann Hesse

I had several personal takeaways that, surprisingly, also apply to the investing business (watch out for a writeup on this!)This is one of the classics that I discovered late in my life. It is a fascinating story of a wealthy Indian brahmin who seeks a path of spirituality and casts away his comfortable life. The story traces his journey of exploration and covers his highs and lows and his learnings along the way. I had several personal takeaways that, surprisingly, also apply to the investing business (watch out for a writeup on this!)

Noise, by Daniel Kahneman, Olivier Sibony & Cass R. Sunstein

I am a sucker for books on decision-making. So I pre-ordered and read this new book by Daniel Kahneman, whose “Thinking, Fast and Slow” is now the bible of behavioral economics! Noise is an interesting take on how to make better decisions by taking away the distractions and reducing the variability in decision-making.

Lao Tzu: Tao Te Ching: A Book about the Way and the Power of the Way, by Ursula K. Le Guin

This modern-day rendition captures the poetic beauty of Lao Tzu’s Taoist classic without burdening a regular reader like myself with complicated language! There are some really powerful poems here to reflect on. I’m thankful to the recent Aspen fellowship seminar, which introduced me to one of the most interesting poems in this collection called “The Uses of Not”.

Do write in at ravi.gv@siteadmin.peakxv.com if any of my interests intersect with yours! Click here to read more articles on Sequoia’s blog. I’m also on LinkedIn and Twitter.