At first glance it would seem that poker is a forthright activity while business leadership is profoundly ephemeral. In fact, business leadership can be quite direct and palpable while poker, whether you play online poker or at a land based poker room, is a game where every decision comes with incomplete information, so it can be seen as an art as much as a straightforward activity.
We tend to think of business decisions as coming after the decision-maker made a full analysis of the problem. Robert Townsend, in his monumental book Up the Organization said that business decisions should be made as quickly as possible. He said that one-third of business decisions would end up as correct, one-third as wrong, and one-third as neutral, meaning that the outcome would have been the same even if the opposite decision had been made.
Poker players would be happy to be correct one-third of the time. In poker, the neutral decisions are the times you muck a poor hand before the flop. When you stay in a hand, you can never be completely sure of the validity of your analysis or of your decision.
Failure and Success
Nothing that requires decisions with incomplete information can be successful all the time. On the other hand, despite incomplete information both poker players and business executives often make correct, even legendary, decisions.
The message Robert Townsend preached was that business leadership comes from a lot more than mere analysis of a situation.
Easy to Get into a Rut
A good business leader does everything they can to keep everyone else in the company from falling into a rut. Robert Townsend wanted to avoid getting a raise in salary because he felt it would either cause other mangers to lose their expected raise, it might cause bad feelings between him and his subordinates, or it might cause subordinates to lose some of their incentive for success however they might not admit it or even sense it.
In poker a rut is like a tell. It is the act of making your moves obvious. If you muck too many hands before the flop, you’ll end up mucking some hands you should play. And your opponents will be able to “read your tell” – they’ll know your moves and use it against you in their play.
Leadership Begets Greatness
Business leadership and poker both have a kind of snowball effect. If the top managers delegate to middle managers and then do not micro-manage the activities of those middle managers, then the people given the challenge and responsibility to make business decisions will have a lot more incentive to do great work than if their every move was watched.
Poker Begets the Power and Wherewithal to Make Hard Decisions
In business, circumstances repeat yet every circumstance is unique. In poker, hands repeat yet every hand is an entity unto itself. Good business leaders and good poker players recognize the creative tension that develops when they have to quickly see the differences in circumstances that appear alike.
Each hand and each business decision is a separate entity yet we also have to learn from the past.
Sam Walton and Walmart
Sam Walton owned a small retail store in Benton, Arkansas. The business was doing well but he rented the building where he had the business and the owner of the building decided not to renew Sam Walton’s lease. That decision alone caused Sam Walton to lose his small retail shop.
Rather than give up, he made one business decision that set his new company on the road to success. He would never again rent space for a store. Rather he would own the building. That gave him the freedom to experiment with new concepts without the fear that he might lose the store.
Sam Walton started what came to be known as Walmart in a small town in northwest Arkansas. His next profound decision was that all managers had to work on Saturday. This meant a six-day work week for his managers at a time that managers saw themselves as a sort of business elite, entitled to a two-day weekend and the entire country was moving toward a five-day work week. It also demonstrated to the vast majority of employees that the owner didn’t see himself or his top executives as an elite.
Leadership is getting people to see your vision. In poker, you want your opponent to either think your hand is better than it actually is or worse than it actually is. So, vision in business might seem to be much different than vision in poker.
However, there are profound similarities. In poker, you don’t fool your opponent; you lead them astray by misdirection. In business, you want to do the same to your competitors. Sam Walton refused for many years to move into large urban areas because he knew that he was leading his industry by misdirection.
By the time Kmart and Sears caught on to what was happening, it was too late.
Leadership and excellence in poker are also about power. Vision is one vital source of power. Power and confidence are mirror images of each other. A powerful manager will be a confident one and a powerful poker player will also be a confident player.
Confidence and power feed each other. Confidence and power intimidate competitors. Within a company, confidence and power are contagious.
Managers and poker players alike need to recognize the giant chasm between good and great. A good poker player can make himself or herself great through study, hard work, and cultivating many other personal skills and characteristics.
A great business leader will inspire his subordinates to pursue greatness even though they know that it will require hard work, perseverance, flexibility, being decisive while at the same time having an open mind, and understanding that you will never have all the facts.
Leadership and high level poker are both art forms. Art requires creativity and homage to tradition, quick thinking blended with contemplative thought, the willingness to go all in and the willingness to be cautious, the ability to balance emotion and rationality, and the willingness to see oneself honestly.
Good poker players will base their success on their own personal strengths. Good business leaders will base their success on their own personal strengths and on the personal strengths pf everyone around them.
We will finish with a word about that old poker bugaboo, tilt. This is when you endure such a bad beat that you lose it. You might have made a horrible mistake and you lose it. You might blame the crass stupidity of the amateur that just beat you and you lose it.
In poker, tilt can linger and cause you to lose more hands that you should either win or stay out of.
In business, tilt comes when the business is doing poorly. There could be a recession that affects your business directly. You might have invested millions only to find that a competitor was working on the same matter and acme up with a better solution.
In business, tilt manifests itself in screaming at subordinates. It results in mass firings. It leads to blaming everyone else for a business downturn.
The best business leaders and the best poker players avoid tilt. They work on themselves constantly to be able to weather both the highs and the lows of their chosen fields.
A good leader or a good poker player will see a big loss not as a time to lose it but as providing information that will be useful later on.
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