Useful Poker Strategies for Business Leaders

by Aaron Jones

In the movies Rounders Matt Damon’s character is a poker player and he comments:

Fold or hang tough. Call or raise the bet. These are the decisions you make at the table. Sometimes the odds are stacked so clear there’s only one way to play it. Other times, like holding a small pair against two over cards, its six to five, or even money, either way. Then it’s all about the feel, what’s in your guts. (Cohen, 1998)

Poker strategies can be useful tools for Executives and Managers in Business today. Business leaders have to be able to trust their instincts as they lead their corporations, departments, or teams. Many industries are rapidly changing and it’s imperative for leaders to be able to adapt. What makes some Executives successful while others are less successful? We see several companies and industries struggling while others seem to be thriving. Larry Bossidy, retired CEO of Honeywell, wrote:

When companies fail to deliver on their promises, the most frequent explanation is that the CEO’s strategy was wrong. But the strategy itself is not often the cause. Strategies most often fail because they aren’t executed well. Things that are supposed to happen don’t happen. Either the organizations aren’t capable of making them happen, or the leaders of the business misjudged the challenges their companies face in the business environment or both. (Bossidy, 2002, p. 15)

Many of today’s corporations have been ineffective in their strategies and tactics. Ford, GM, American Airlines, Delta Airlines, MCI, Global Crossing, All of these companies has filed bankruptcy in the past few years. Management has been unable to turn companies around. Let us look at three important poker characteristics good leaders must possess. The first is the ability to understand and read people. In Mike Caro’s Book of Poker Tells, Mike tells us, “Once you’ve mastered the basic elements of a winning poker formula, psychology becomes the key ingredient in separating break-even players from players who win consistently.” (Caro, 2003, p. 11) This is more important then ever. We live in a world of instant messaging, e-mail, and teleconferencing. Even this class is an online course. In the past people would interact with their customers and employees on a daily basis but today there are customers and employees that you talk with daily but have never met face to face. This ability to read people and to understand their wants and needs is vital for today’s leaders. In today’s globalization environment people expect good customer service. They have many choices for products and services and it comes down to who can provide the best product or service at the best value and customer service is very important when they determine value. In an article in Business week online Darrel Rhea writes:

Companies innovate for two basic reasons. For those with established products or services, innovation is the Darwinian response to competition. We devote resources to improving and evolving our products because we have to so as to sustain and grow our core business. For new companies or initiatives, innovation is about creating entirely new ways of addressing human needs and inventing “what’s next.” Often this means generating new business models. (Rhea, 2005)

Knowing and understanding your customer base is imperative to sustaining and growing a business. As competition stiffens it will be the business leader who understands the needs of their customers and can be innovative that will be most successful.

Paying attention to your surroundings is the second key ability needed to leading an organization. Doyle Brunson tells us:

Concentrate on everything when you’re playing. Watch and listen…remember you have to do both, and relate the two. You listen to what your opponent says, but you watch what he’s doing independently of what he says…(Brunson, 1978, P.19)

It’s imperative that companies know their customers but they must also know their competitors. They have to find weaknesses where they can slip in and increase their market share. In an interview in the San Francisco Chronicle Juniper Networks CEO Scott Kriens comments on buying NetScreen, a security specialist company:

The timing decision -- why now? It’s really a function of this opportunity we see. The telecommunications industry has basically disengaged from the old model. Nobody is trying to string copper wires all over the world anymore so we can make telephone calls. But the industry and those of us within it have not yet re-engaged in the new model.

The new Model is this very smart, reliable, aware network that responds to our needs and our ability to pay and our interest in different levels of user experiences. That’s the vision for where this is going.

It makes more sense to have one single, intelligent, virtual network that we can plug our televisions, telephones, cell phones, home stereos, laptops, and iPods into. It makes more sense to have one of those than to have seven side by side, traveling to every major city in the world.

But how do you do that? The challenge in this is not describing the destination; it’s describing the path between here and there. That’s the leadership we need as an industry. (Howe, 2004)

Juniper acquired NetScreen to increase their packaging offering. They took time to study their competitors and surroundings and worked to be able to be a one source provider to their customers and to potential customers to increase their market-share. Later that year CNET reports, “Juniper’s market share shot up to 36 percent from 20 percent for the same quarter the previous year.” (Reardon, 2004) Their ability to read and understand their surroundings and the market allowed them to increase their market share by 16%.

Decisiveness is the final ability that is imperative for business leaders. Doyle Brunson explains: It comes to a point where you have to take a chance. If you want to be a winner – a big winner – at No-Limit Holder…You can’t play a solid, safe game. You must get in there and gamble. (Brunson, 1978, p. 420)

Decisions are needed on a daily basis. A good leader must be able to make that decision and not pass the buck. Today more and more organizations are having the problem with getting decision makers in their organization. Larry Bossidy writes: Decisiveness is the ability to make difficult decisions swiftly and well, and to act on them. Organizations are filled with people who dance around decisions without ever making them. Some Leaders simply do not have the emotional fortitude to confront the tough ones. When they don’t, everybody in the business knows they are wavering, procrastinating, and avoiding reality. (Bossidy, 2002, p. 123)

Leaders must be able to make clear decisions in a timely manner in order for businesses to succeed. Brian Tracy reported: Thousands of companies were studied to determine the reasons businesses fail. Here they are in order of their importance: • Lack of Direction. Business owners fail to establish clear goals and create plans to achive those goals, especially before starting out, when they fail to develop a complete business plan before launching their company. • Indecisiveness. An Entrepreneur is unable to make key decisions in the face of difficulties, or decisions are delayed or improperly made because of concern for the opinions or feelings of other people. (Tracy, 2005)

In today’s fast pace world it is imperative that decisions be made in a quick and efficient manner. You have to be able to put your chips in the middle and take a chance. If you are a leader in business you can not sit on the sidelines, you have to get in there and play the game. As Doyle Brunson points out, “…whenever you find yourself playing a very tight and defensive style of Poker…you’ll be in danger of anteing yourself to ‘death’…”.(Brunson, 1978, p.419)

Nearly every industry is involved in a global market. The lines of demarcation have been grayed and companies are pushed to the limit with changing markets and stiffer competition. People are more important then every. Businesses have to have the right people in the right places. None are more important then the management personnel in the company, from the top Executives to the line supervisors. Just as Poker Players have to make decisions for $100.00’s, $1,000.00’s, or even $1,000,000.00’s, so to do business leaders. Millions of dollars are spent on management courses and leadership training. Understanding and reading peopling, paying attention to surroundings, and the ability to be decisive are abilities that will lead to strong leadership and a strong corporation. Later in the movie Rounders Matt Damon’s character says: Why does this still seem like gambling to you? I mean, why do you think the same five guys make it to the final table of the world series of poker EVERY SINGLE YEAR? What, are they the luckiest guys in Las Vegas? It’s a skill game, Jo.” (Cohen, 1998)

Bibliography

Bossidy, L., & Charan, R. (2002). Execution. 1st ed. New York: Crown Business.

Brunson, D. (1978). Super system. 3rd ed. Cooper Station, NY: Cardoza Publishing.

Caro, M. (2003). Mike caro's book of poker tells. 1st ed. Cooper Station, NY: Cardoza Publishing.

Cohen, Bobby (Executive Producer).(1998). Rounders (Film) New York City, NY: Miramax

Howe, K. (2004). Juniper networks on the record: scott kriens and pradeep sindhu. San Fancisco Chronicle, . Retrieved Mar 13, 2006, from http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2004/03/14/BUGLV5J9OR1.DTL

Reardon, M. (2004). Cisco loses market share. CNET news, . Retrieved Mar 13, 2006, from http://news.zdnet.co.uk/communications/networks/0,39020345,39174740,00.htm

Rhea, D. (2005). Understanding why people buy. BusinessWeek online, . Retrieved Mar 13, 2006, from http://www.businessweek.com/innovate/content/aug2005/id20050809_077337.htm

Tracy, B. (2004). The basics of business success. Entrepreneur.com, . Retrieved Mar 14, 2006, from http://www.entrepreneur.com/article/0,4621,320941,00.html