The key parallels between poker and business; part 2
Consolidating on the key points shared in the previous article, The key parallels between poker and business, this article will expatiate on some five more key parallels between poker and business.
Poker essentially is a gamified simulation of the strategic planning, decision making and execution processes typical of a contemporary business competing in a highly ruthless and fierce business climate. In that sense, being successful in the game long term is a desired pre-requisite to sustained similar success in the business world. It’s no wonder many successful fund managers, CEOs and business executives trace the underpinnings of their largely successful careers within their respective fields to playing poker. Truth be told, many of the key indicators to success in both poker and business are less technical and more behavioural. More often that not, poker neophytes (beginners in the game) look for the “secret sauce” and tricks to success in the game whilst the more experienced veterans fully understand that poker (especially NLTH) is in reality a less technical and more people oriented game. They fully understand poker is not a card game with people, it’s a people game with cards. Below are some five other equally important key parallels for long term success in business and poker.
6. Focus: Focus is an indispensable character trait for long term success in both poker and business. You will hardly make any substantial progress at the poker tables if you keep wondering why the other player has a thicker nose or how good looking the dealer looks. Attention is a limited resource meaning it is expendable in due time. The player with a divided attention at the table is using less of his cognitive resources relative to other players to compete against them and is sure to fizzle out in no time. The analogous can be said of entrepreneurs and business executives. Obsessive focus on competitors and less focus on employees, customers and internal business is a recipe for failure. A more profound variant of focus is “selective focus” which connotes the calculated distribution of cognitive resources in terms of priority and expediency. In simpler terms, the winning poker player focuses his attention more on events at the table that matter a lot to his winning prospects and less on irrelevant events such as figuring out the dealer’s zodiac sign and the odds that a competing player will have your favourite hand on the button. The astute business executive likewise directs their attention towards events that are more relevant towards their business and less towards inconsequential factors.
7. Patience: The abillity to remain to composed and steadfast as you execute your strategy is very crucial. You’ll need to exercise self restraint and stoicism as you wait out to successfully execute your winning strategy. The majority of cards dealt to any poker player are neither of the commonly desired “killer” face card winning combinations (AA, KK, QQ, JJ, AK, AQ, AJ, KQ, KJ) yet the biggest pots are typically not won with these hands. Exercising patience requires a long term focus towards one’s outlined goal and being steadfast in the belief that one’s outlined winning strategy will eventually come into fruition. A successful business executive is patient enough with their employees, clients, corporate partners and relevant stakeholders. They are also patient enough to allow their outlined strategy to play out even if the patience of their colleagues and superiors are wearing thin. The winning poker player is unperturbed by the number of “out of range” hands he receives at the poker table but rather is patient enough to allow their winning strategy play out.
8. Leverage: Leverage in poker connotes the placing of huge bets on marginal hands that will compel your opponent to risk a huge stack or pretty much all of their chips on later betting streets. The chips on the table are the poker players’ primary liquid assets and the “investment” of larger bets with the prospects of causing the opponent to risk a huge stack or all of their chips on later betting streets constitutes leverage in poker. In business, this concept is more intuitvely understood than explicitly discerned. Many business owners and businesses utilize borrowed funds to invest in assets with the hope of securing larger returns that override the break even points of their initial investments. Whether its the leveraged funds for investing in real estate, financial securities and derivatives (stocks, bonds, forex, cryptocurrencies etc.) and fixed assets, the expectation of greater returns in the future is the principal motive behind leverage. Securing borrowed funds for investment is not enough. The astute business professional ought to methodically select the best assets with the greatest relative returns on investment if he or she is to sustain their business on the long term. Likewise, the winning poker player cannot simply risk applying leverage anyhow. He or she ought to systematically identify and pick spots during the hand to execute this strategy in order to maximize their returns on the leveraged bets.
9. Psychological Manipulation: Arguably my very favourite out of the lot, no poker player can sustain their career and neither can any business be profitable over the long term without an ample amount of psychological manipulation. I’m very much aware that advocating for this notion would easily trigger connotations of Machiavellianism but one can simply not do without psychological manipulation. The importance of psychological manipulation in winning has been understood and understated as far back as several millennia. The notion forms the underpinning of Sun Tzu’s highly revered book (unsurprisingly, both by poker players and business professionals), The Art of War. The prevalent theme evident throughout the book is encapsulated in the quote, “The supreme art of war is to subdue the enemy without fighting.” A companion quote to this is “Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win.” The winning poker player intuitively understands that their table or perceived image and their exploitation of this image is the major key to winning at the tables. Psychological manipulation involves influencing the opponent players to act in ways you desire to maximize your chances of profitability. This may include manipulating your betting patterns, altering your body language, trash talking etc to deceive players into folding better hands or calling with weaker hands. The modern day business climate is filled with a plethora of psychological manipulative tactics. These tactics typically include creative accounting to boost a business’ financial records, sensationalism of financial performance and business track records, smear campaigns on opponents, financial market manipulation, insider trading, industrial espionage, cyber warfare etc. These psychological manipulative tactics are typically deployed to influence competitors, customers, employees, stakeholders, investors, financiers, regulators and even governments to act in ways that favour such business. Whilst several of these tactics are outlawed or may present serious ethical considerations, discerning businesses are very savvy in their application of these manipulative tactics to their advantage with sheer impunity.
10. Resilience: Resilience is also a defining attribute of winning poker players and successful business executives. The ability to endure harsh circumstances and emerge unscathed and much more empowered is a character trait only identifiable in such individuals. At the poker tables, certain times, a proficient player may execute all the right manoeuvres and still lose lots of money. The most important point is being able to bounce back quickly and return to winning ways. Likewise, there are several well documented accounts of business professionals who lost it all and still rose back again (often times, much higher than pre-crisis levels). A strong mental framework is the backbone of resilience and being able to maintain composure and be mentally non affected despite the ambient occurrences is key to long term success in both poker and business.
In a nutshell, poker and business share so many common parallels and themes that cannot all be detailed in a series of written posts. The skill sets acquired and faculties refined at the poker table are readily applicable to business and it’s no wonder why so many successful business professionals and executives derive inspiration from indulging in the game.
