Things I Learned in Poker that Work in Business

OK, so I’m not a poker player, other than a couple of games of Texas Hold’em with family, but I have some insider information from my son, Michael Berk (in photo above), who is a professional poker player. After picking his brain, I have compiled some thoughts below, showing some of the parallels between winning in poker and being successful in business and life. 

1.    Patience and Endurance can bring big rewards. Your first poker hand might really suck, but if you’re patient, the next few hands could be excellent. As in business, we may have a bad day or year, but if we are patient, things could turn around. Avoid immediate panic. Patience is not easy, but it is necessary. 

Poker tournaments can go for days, usually with as many as a couple of thousand players on day one. You may end up playing hundreds of hands before the final round (if you make it that far), and there will be lots of ups and downs along the way. You have to be willing to dig in your heels and not give up, stay alert, keep your head about you and continue to do your best for several days, sometimes for 12 hours a day.  

Only those in the top 10-15 will actually receive a payout in most poker tournaments. Everyone else goes home empty handed. We know this is also true in business. Those who give up in the early days are the ones who miss out on the rewards, whether it’s cash, results, innovation, or general growth – they all require stamina. Don’t give up. 

2.    Assess your risk(s) up front and every step of the way. Be aware of the risks, but don’t run scared. According to Michael, a seasoned poker player knows the risks of every pair of cards dealt, every position at the table and the betting patterns of their opponents. For example, if you are in a "weak position" at the table, you are required to be the “first to act” so you have less information about what is going on at the table with other players. This puts you at a disadvantage and forces you to play a little differently than if you were able to sit back and watch the other players first, before you had to take your turn.

That's true in business, too. You're not always (maybe never) going to have the advantage of watching someone else blaze a trail for you which means you have to watch out for potential hazards and risks on your own. But, as the saying goes, “low risk/low reward” -- embrace that risk but be smart about it. There are times you must be willing to take some risks or you won’t survive -- so true in business and in life.  

3.    Study your competition. Watch for patterns of behavior in the other players so you can be one step ahead.  In business, this means knowing your competition and what they are up to. Don’t bury your head in the sand and just do your thing. Be aware of what’s going on in your industry and what other companies are doing, so you can be the best. LinkedIn and the internet in general have made this much easier.

4.    Keep your emotions in check. If you become quickly discouraged and lose focus each time you lose a hand or have a bad day, you will have difficulty succeeding. The flipside of that is also true – you can get overly excited at the first sign of success (winning one hand in poker or one great sale in business) and start to be less conservative in your approach, otherwise known as getting sloppy.  Maybe you become overconfident and make mistakes or you assume things will work out again, but they don’t.  

This is a common pitfall of having early success; we assume that there is more where that came from. That may be true, but not always immediately and sometimes not for a long time. As the saying goes, "slow and steady wins the race". Try to find a consistent, steady rhythm that allows you to reach your goals without missing your mark or burning out. Find your balance.

Making decisions in the midst of uncontrolled emotions can easily cause you to lose your game. In business, unrestrained emotions can cause you to lose an important deal, a chunk of money, a valued customer or even a critical relationship. Practicing mindfulness, taking time for meditation or developing a spiritual focus can help you maintain control of your emotions. 

5.    Don’t judge a book by its cover. Never assume anything about anyone. When my son, Michael, first started playing poker a few years ago, he faked out other players because he had such a young face. He would show up to games and the other players would take one look at him and wrongly assume that he was “just a kid”. They thought that beating him would be a piece of cake. When he walked away with all their money, they quickly adjusted their perception of him. Now they see him coming.

Another example of this is the recent basketball game between number one ranked Purdue and number 16 ranked Fairleigh Dickinson. Apparently, the Purdue team thought they had this one in the bag – they were the obvious favorites, so they didn’t expect the other team to give them much of a fight. But the Fairleigh Dickinson team came into the game expecting to win, with a great deal of confidence and skill. Purdue was not ready and were utterly embarrassed in a surprising loss of 63-58.  

In business, making assumptions can cause a host of problems. For example, someone once told me that the richest people in the room may appear to be broke – they may be the one wearing the hoodie and sweatpants not the one in the suit or dress. This can also be true of a business’s image: Just because a company doesn’t have flashy ads or a beautiful website doesn’t mean they aren’t a serious entity.  The opposite may also be true -- they have a fancy website, but they don’t really have a sustainable business plan. Don’t be fooled by appearances.

6.    Play your cards close to the vest. This is a famous saying from poker, meaning, don’t give away your strategy or plan by revealing your hand. In business, don’t say too much to the wrong person or give away your trade secrets by boasting, etc. Choose your words and your partners carefully.

7.    Rarely go All in. Going “all in” in a poker game is done on rare occasions. The same should be true for your business dealings. In order to go “all in” on an investment, you want some level of certainty about the situation: a high level of trust, confidence in the research, the people involved, etc. This goes back to risk assessment. For example, I recently invested a small chunk of money in an electric vehicle manufacturer (not Tesla) – they were newer to the industry, so I didn’t put a large amount of money in because I needed to see them prove themselves. As it turns out, a few years later, they are still struggling and I haven’t made any money, but I also haven’t lost too much, since I didn’t go “all in”.

8.    Stay hungry. Sometimes it just boils down to how badly do you want to win? If you ever listen to sports commentators, they sometimes say that one team is hungrier than another, even though they may not have as much talent as the other team. This is definitely an element in all games, and even in business. Sometimes it is pure grit and determination that gets us to the finish line when we are trying to achieve something great. The recent Purdue vs. Fairleigh Dickinson basketball game is a perfect example of an underdog who appeared to want to win more than the number one seed, and so they did! Don’t assume that because you didn’t follow the traditional business plan, you are automatically going to fail.  The “grit” factor cannot be discounted.