Believe it or not, several universities throughout the United States have organizations that focus on how the game of poker can serve as an educational tool for other areas of life. There are a plethora of parallels between the great American pastime and the world of business. Let’s take a look at the facets of poker that can translate into other industries.
First and foremost, the ability to read people certainly comes in handy in the business world. In both live and online poker, reading other players at the table is of the utmost importance. Are they bluffing? Do they hold the nuts? Did the ace on the turn make their hand? If you push all in with a short stack, is it likely that they’ll call? Are they looking just to make the money or actually win a tournament?
In business, reading people is even more crucial. Take a job interview, for example. Is the applicant telling the truth or just responding with answers you want to hear? Will he or she take $80,000 per year or will they be likely to bite at $60,000? These kinds of questions can only be answered by assessing a person’s physical “tells” and verbal cues. In the high-stakes world of business, simply guessing blindly about how someone will respond can be an error that carries a large number of implications.
Similarly, negotiating is an integral part of doing business anywhere in the world. The way to negotiate successfully is to understand exactly what your opposition is looking for and then acting accordingly. In poker, it’s the same thing. Understanding whether your opponent is looking for a flush draw or simply wants to see a cheap flop is a part of the game. Similarly, identifying whether an opponent is value betting or over-betting the flop can save you a bundle of chips or even help you scoop a big pot. It all depends on whether you can identify what your opponent is looking for.
Bankroll management also applies to the business world. In poker, understanding and managing your bankroll is the only way to succeed, regardless of the stakes. Going broke is a sure-fire way to struggle in poker. Similarly, a bankrupt business cannot succeed. Hiring personnel who understand proper accounting can help you get ahead of your competition in business.
Knowing how to cut costs and trim budgets is important in business. The corollary from poker involves understanding when to manage pot sizes and when to pump up the amount of money involved. Controlling these “costs” is central to limiting your losses and maximizing your earnings. Likewise, understanding how to identify holes in your game can assist your business in plugging gaps in its business model. Although there is no PokerXFactor or PokerTracker for business, spreadsheets and historical financial data serve as the tools for improving a company’s viability.
Perhaps the most central aspect of poker is the competition. Players who lack the competitive spirit to outfox their competition are ultimately swept under the rug. With big money on the line, poker players go toe to toe in a highly competitive environment. The $100 rebuy on PokerStars, for example, often boasts the toughest tournament field. Players who win that event etch a name for themselves as one of the best that poker has to offer. Without a drive to win and a willingness to gamble, however, winning the $100 rebuy can be a monumental task.
When you ask anyone in poker what lures them to the game, they’ll say the competition and the money. Many were formerly involved in sports and derived much of their competitive drive from previous endeavors. In business, these same two items – competition and money – push firms to outperform others. There’s a reason that poker is shown on networks like ESPN and Fox Sports Net: It’s viewed as a competitive sport. It’s the same reason that competitive fishing and pool air on these same channels. It’s a high-stakes player versus player game where the ability to outwit your opponent determines your fate.