Poker can be very addictive for some and highly intelligent for others. In fact, there are several parallels found between success playing poker and running an auto industry business.
Like poker players, auto industry business leaders use logic and reason to make strategic decisions and they know how to calculate risk. They know how big the market is and how much they hope to conquer.
An article in Fast Company talked about how to know if you’re the fish or the shark at the table. Here are the lessons they provided that business leaders can apply throughout their careers:
The Point of Control
In Texas Hold’em, you are dealt two cards you can see but your opponents can’t. Each player has control of the situation, they either decide to be in the hand or fold.
As a business leader, you are in control at the start of any situation. You decide to do something or you don’t. Whether it’s responding to an email, seeing a sales rep, or hiring an employee, you either fold or stay in the hand.
The Power of Position
In poker, understanding the power position is the most important because you are able to make decisions after you’ve gathered information from your opponents.
In business, when a competitor declares what they want first, you have information they don’t. In poker terms, you have the power of position. In business and in poker, it’s that ability to use your power of position regardless of the strength of your hand which separates the good players from the great ones.
To Make Decisions, Try Math
In poker and in business, calculating the odds and expectations are important. In poker you don’t have to be a math genius. Poker players base decisions on expected value. The calculation doesn’t ensure every hand will be profitable, however as long as a player plays hands with positive expectations and folds hands with negative expectations, they will be profitable in the long run.
Business leaders do something similar with decision trees. They assign each branch with probabilities and likely profits and choose the branch with the highest expected value.
Understanding and Adjusting to the Style of Competitors
Poker players watch and learn how their opponents play and make adjustments to how they are playing. Business leaders do the same. They both need to learn the comfort zone of their competitor so they can adjust to take advantage of their competitor’s style.
Keep Others in the Game
Poker players want as many opponents as possible when they have a great hand. They slowly put their chips in the pot and never bet so much their opponent would fold. They want to make the pot as large as possible. Then in the last round of betting, they put all of their chips in.
In business, they apply the same approach. When a business leader knows they have an exceptional product no competitor can match, they expand the market during the introduction and early growth phase by alluring competitors to invest in promotion and advertising. Once the pot is as large as possible, they put all of their chips in and go for market domination.
Look through the Eyes of Others
The most important lesson you can learn in poker, is looking at everything through your opponent’s eyes. They don’t make decisions on what they have in their hands, but rather what their opponent has.
When a business leader sees through the eyes of the customers, competitors, their employees, and stakeholders, they discover the “truth in their error” or “the error in our truth” according to the Fast Company article. Once you’re able to see through the eyes of others, decisions become much easier.
What business lessons from playing poker would you add?
Image: BaileyRaeWeaver via Flickr, CC 2.0
