Thursday, September 28

3 Important Business Lessons We Can Learn from Playing Poker

When it comes to running a business, you can take inspiration from anyone and anywhere. Some are influenced by Steve Jobs and the military precision with which he ran Apple to become one of the most successful brands in the world. Others praise Richard Branson for dabbling with so many different industries as part of Virgin and knowing when to throw in the towel when they weren’t profitable. Some people take more unconventional approaches to succeed in business from video games to comics, movies to books and even card games. Is it possible that playing poker could give you an insight into business?

Here’s how the key similarities between poker and business can inform one another to make you a better poker player and a better businessperson at the same time.

Making decisions is one of the key factors of running a business.

Making Decisions 

The major similarity between poker and business is that there are no guarantees. No matter how confident you are about something, there is a chance that a force majeure could derail your plans. But, this element of unpredictability is exactly how businesses are able to thrive, and how skills learned through playing poker can help you to succeed in business. Making decisions is the main job role of running a business. These decisions range from the mundane, such as what color your office walls should be, to the important, such as who you hire as your delegates, to the critical, such as what your next product launch should be. 

Your business skill is dependent on making these decisions with varying degrees of information. Some decisions will have a bevy of useful and watertight arguments for and against them, others will be open to more risk. It’s being able to take these calculated risks that makes you strong in business. And that’s how poker can help. While prior knowledge and strategy are useful, sometimes you are reliant on taking risks. How can you be sure your opponent is actually bluffing? How can you be sure that your own hand, even if statistically strong, will be victorious? Being able to confidently make decisions where you don’t know the outcome is a key skill in poker, one which, if you practice enough, you can transfer to a business setting. Once you have some experience of taking calculated risks with potentially high stakes, you’ll feel more comfortable doing so in the future.

Understanding the Competition 

A business is only as successful as the distance it places between itself and its competitors. There are so many lessons that business degrees can’t teach, and Kodak’s failure to recognize the growth of different kinds of cameras, a move that edged it out of the camera market completely, is one of the most well-documented examples. Competition in business is part of the fun. Healthy competition, such as the rivalries between Apple and Samsung, Xbox and PlayStation, and Burger King and McDonald’s help to keep each company on their toes. And in poker, most of the fun comes from the competition, too – whether it is other players or the dealer. In both business and poker, understanding your competition is critical.

But business isn’t always black and white, and sometimes our competition plays savvy or takes underhand moves to try to beat us. So, taking a page from the poker player can be important here. One of the major elements of poker games – whether it’s Texas Hold ‘Em, Seven Card Stud, or Omaha Hi-Lo – is bluffing. But, as well as being able to hold your own, you also need to develop the ability to read people. Picking up on your opponents’ tells is an important aspect of playing poker. By learning the skill in poker to be able to read people to determine if they are bluffing or not, you will be able to transfer this to business in order to determine a range of factors.

For instance, you will be able to assess your competition better by understanding why they might be making certain decisions themselves, you will be able to better negotiate with suppliers and distributors. You will be able to concoct the best countermoves when your competitor releases a product or feature that supersedes one of your own. Ultimately, you will have a better ability to analyze interpersonal situations that might occur. 

Having a long-term game plan in business is crucial to success. 

Planning Strategy 

Business is a marathon, not a sprint. Businesses that make the most of their money around Christmastime don’t spend the rest of the year patiently waiting, they spend it preparing and planning. A business plan could be the most useful aid in succeeding and all successful businesses have game plans that are able to evolve, like a poker strategy, and keep the business on track. In business, you may have some setbacks. No – you will have some setbacks. But the important thing is on how you deal with the setbacks in the short term, to remain on track in the long term. 

The same could be true for poker. You will have occasions where you are knocked back or your judgment wasn’t as accurate as you’d hoped. But, being able to take these setbacks on the chin and continue is part of learning to be a skilled poker player. Once you’ve mastered the ability to take things in your stride and look at short term setbacks as not prescriptive of the long term, then you can transfer this skill to other areas. A failed pitch or a flop of a product doesn’t mean your business is a failure. You should learn from this mistake and apply the lessons to the next step on the business plan. Poker teaches strategic thinking and the ability to sometimes plan a few hands ahead, especially if you are able to catch a tell early on in the game and use it later on for maximum impact. 

Playing poker and succeeding in business share a lot of similarities. You can learn a lot about running a successful business by mastering the strategic game. Whether this means you are planning for the long term and taking short term knockbacks as lessons, being able to understand your competition and reacting accordingly, or being able to take calculated risks that might or might not pay off. The transferable skills through playing poker can help you in business and even in other areas of your life.

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