Because it’s so similar to business, poker is a far better teacher about business than sports, chess, and many other teaching metaphors. Yet dozens of self-help books use sports and other games, while hardly any books use poker.
Poker has been neglected primarily because it’s not “respectable.” Some people see us as “just gamblers.” Others recognize that poker requires more skill than craps, etc., but are opposed to all gambling. This series will show that playing poker can improve business decisions.
Why Should You Care?
You may think, “Who cares about business decisions? I just want to win more money.”
That’s a short-sighted perspective. As long as many people, including powerful politicians, see us as “just gamblers,” we’ll have serious social and legal problems. Families and friends may criticize our playing. The DOJ’s actions, various arrests and anti-internet poker laws prove that poker’s enemies can disrupt our lives and hurt our game.
If more people realized that poker can improve career, business and other important decisions, our families and friends could become less critical, and some enemies less dangerous. Our negative image lets them get away with bending the law. For example, years after Black Friday the DOJ reluctantly admitted that online poker did not violate federal law.
Poker Lets Us Make the Most Important Decision.
“Once you reach a certain level of competence at poker, your most important decision by far is game selection.” (Mason Malmuth, Poker Essays, p. 122) Athletic teams can’t make that decision because schedules are set long in advance. No matter how tough a game is, they can’t refuse to play.
We repeatedly make that decision. If the players are too strong or the wrong style, we don’t sit down. If we start playing, and the game becomes too tough or we’re not playing well, we can quit. No matter how badly they’re getting slaughtered, a football team can’t decide not to play the second half.
If we define “game,” more loosely, we make that decision dozens of times per hour. We could regard each hand or betting round as a “mini-game.” Every time someone bets, we decide to play or fold.
Poker winners work hard to choose the right games. Before playing, they study the table and decide whether to sit down. While playing, they frequently decide whether to stay or quit. When it’s their turn to act, they realistically analyze the situation and decide to continue or fold.
Some excellent players are broke because they choose the wrong games or won’t quit tough games, while less talented, but more selective, players win steadily. Many losers don’t accept responsibility for choosing bad games; they just blame bad luck.
Realistic Analysis Is the Critical Step.
The key to game selection is choosing ones that give you an edge. You can’t make that assessment without realistically analyzing your own and your opponents’ skills, styles, strengths and weaknesses.
Poker players who think they can beat better players go broke. So do ones who play in the wrong types of games. For example, you may beat some winners with certain styles (such as tight-passive), but get beaten by some losers with the wrong styles (such as loose-aggressive). Or you may win in full table games, but lose in shorthanded ones. Or beat cash games, but lose in tournaments. Far too many players try to beat games that are too tough or the wrong style for them.
“Poker players … continue to go up the ladder until they find themselves pitted against players they can’t easily beat, and that’s where they stay. Poker players who could make a comfortable living in $20-$40 games struggle to survive in $100-$200 games.” (Arnold Snyder, “Expected Value and the Anti-Peter Principle,” Card Player” January 23, 1998.)
Do you know how well you do in various games? If you don’t, you’ll make some bad decisions.
Poker winners’ realism directly contradicts sports rhetoric. Because they can’t choose their games, athletes are exhorted to deny reality about themselves and their competition.
“The team that won’t be beaten can’t be beaten.”
“When the going gets tough, the tough get going.”
“You’ve got to believe you can beat anyone.”
“We’re number one.”
Game Selection Is the Most Important Business and Career Decision.
If you choose the wrong business games, you won’t just lose your buy-in. You can waste your life. Many people chose terrible games. They enter professions, take jobs, join, start, or buy companies, or accept promotions or transfers that are utterly wrong for them. They fail and then may do what many poker losers do. Instead of accepting responsibility for making poor choices, they blame bad luck or someone else.
You may object that these activities are not games, but they have many game-like characteristics, and a Google search for “business game” got hundreds of thousands of hits. More importantly, the 1994 Nobel Economics Prize was for research on game theory. The award announcement stated that it “emanates from games such as chess or poker.”
Business school courses on competitive analysis and strategic planning teach the same principles we just applied to poker. Analyze the market and competition, and choose “games” which give you an edge. Those principles directly apply to career and business decisions.
Some lawyers, accountants, doctors, and other professionals belong in partnerships and corporations; others should be sole practitioners. The same principle applies to carpenters, auto mechanics, and other skilled workers. Unfortunately, they may not recognize their mistake until it’s difficult or impossible to correct it.
When Jack Welch became chairman of GE, it had over 400,000 employees and was in dozens of businesses. He decided to withdraw from all markets in which GE could not be #1 or #2. In a few years he reduced the head count by more than 25%. As the number of businesses and employees declined, the bottom line increased. Profit growth averaged about 19% per year because the company was competing only in the right games.
Southwest Airlines management knew they couldn’t compete in the major markets, so they concentrated on flights between second and third tier cities. From 1980-1995 the major airlines lost billions, and Eastern, Braniff, and Pan Am went bankrupt, but Southwest remained profitable.
As a management consultant, I briefly encountered a somewhat similar situation. A huge multinational had purchased many small companies. All had been highly profitable before the owners sold out and retired. After being purchased, nearly all of them were losing money.
The reason was obvious: They were playing in the wrong game! Management couldn’t run small businesses well. Their overhead was too high, and their people and systems didn’t fit the small business game.
Poker can help you and others to make better decisions about your career, business, and life in general. Publicizing its value as a teacher may improve our image with friends, families, and the general public. The better our image becomes, the more comfortable our lives will be. Future columns will discuss other ways that poker can improve business decisions.
After publishing five long, expensive poker books, Dr. Al (firstname.lastname@example.org) writes short, inexpensive, Kindle books. How to Beat Small Poker Games costs $2.99 at amazon.com.
You can hear Dr. Alan Schoonmaker with Dr. Nick & the Hot Aussie Chick discuss playing poker with Donald Trump HERE
More books by Dr. Alan Schoonmaker are as mentioned available on Amazon and also HERE