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Patience and aggression are key elements of a successful poker strategy, but also, as this innovative and accessible guide reveals, to a successful leadership strategy in business decisions. Acclaimed poker instructor Charles Swayne presents down-to-earth career advice using a language that makes the valuable guidance both relatable and understandable—the language of poker. The logic-based viewpoint built upon proven strategies will be a welcome relief to individuals who have been turned off by self-help books ...
Patience and aggression are key elements of a successful poker strategy, but also, as this innovative and accessible guide reveals, to a successful leadership strategy in business decisions. Acclaimed poker instructor Charles Swayne presents down-to-earth career advice using a language that makes the valuable guidance both relatable and understandable—the language of poker. The logic-based viewpoint built upon proven strategies will be a welcome relief to individuals who have been turned off by self-help books that use empty metaphors and promises and are looking to give their professional circumstances a boost or improve their daily corporate interactions. In poker and in business there are written rules—and unwritten ones as well. Offering such insight as considering the perspectives of others during a negotiation in the same manner as reading hands and players, and understanding the stakes and accepting financial limitations in the mindset of raising a bet, this business success guide will inspire confidence and purpose in both the boardroom and at the card table.
"With The Shark and the Fish, Charley has fulfilled his mission to help leaders make better decisions than they would have made on their own." —Mike Sexton, host of the World Poker Tour and member of the Poker Hall of Fame
"Charley is no Doyle Brunson and he's no Jack Welch, but he knows what makes both of those guys great." —Phil Gordon, Netsys executive and poker commentator
"Charley's book will help any leader make the best possible decisions." —Lyle Berman, founder of the World Poker Tour
"In this ground-breaking book, Charley Swayne uses poker as a metaphor to provide world-class guidance on how to make superior business decisions. Swayne's methods are crystal clear from the very first pages and provide certainty about the logic guiding your choices. It's a direct path to pure profit." —Mike Caro, foremost authority on poker strategy, psychology, and statistics
My mission is to help you make better decisions than you would have made on your own. Every day for over a year I wrote that mission at the top of the page. Then I got to work. Great news: if there isn't a precise roadmap, there is a lighthouse guiding you to a higher level of strategic thinking and decision making.
Answers have been found. Theory has been translated so you can use it. According to the Wall Street Journal, the most sought-after leadership skill is strategic thinking. This book will help you to go about making the wisest possible decision and pulling the trigger.
Building a company is really hard. Leading the company is all about creating an environment in which anyone in the organization would make the same decision and take the same action you would if you were there. And it's about giving them the freedom to do so.
Why poker and business? I often use poker as a metaphor because I have found that world-class poker players think in an entirely different way than good players — they really do think strategically. Great leaders also think in a different way than good managers. It was no coincidence that Gates launched Microsoft, Nixon funded his first campaign, and Eisenhower paid for his military uniforms — all from their poker winnings. The skill is not the cards or business; it's a higher dimension of creating an extraordinary environment, and you are about to find out what it is and how to do it.
We will start by discovering your compass. We will look into the future, create a mission, set objectives, determine strategies, take action, and then evaluate, experiment, and adapt.
As a bonus, if you lead a business or organization, you'll see how to instill in your people the sense that "we did it" (the workers) as opposed to "they did it" (the managers). And, when that happens, you will discover ever-increasing possibilities.
The Leader Makes It Happen
Leader as savior. Leader as messiah. Leader as hero. Atlantis fulfilled. It's all a crock. The leader is not the wizard behind the curtain pulling all the right levers. The leader is not some seductive siren song. This image is nothing more than a self-serving myth.
If you think you're in charge, you're not even close. Your authority is limited. There is no cosmic chess board. As Philip Gelatt, president of Northern Engraving, said after 40 years in business, "It doesn't matter what I do. I can't control anything."
At dinner one day, one of our children asked me what we were going to do on the weekend. I carefully explained to them, "There is one vote per person in this family. I have one, and your mom has the rest."
Despite what your span of control looks like on your organizational chart, control does not really exist. The longer the span, the shorter the control. The greater the tooth-to-tail ratio, the lesser the command. It's not the person at the top, it's the people within. The organization is bottom up, inside out. Organizations manage themselves. None of us has ever done it on our own. That doesn't mean we don't need top management; it's just that top management needs to embrace that it's not only top down but also bottom up. The day is saved or lost by those on the ground.
Okay, now that you have the bad news, there is good news. Leadership is less about command and control and more about creation. You are the base that influences the pH of your company's soil. You have the power to create character-based leadership.
True leadership is when you create an atmosphere in which your people are so engaged that, when faced with unforeseen circumstances and forces, they act as you would and in some cases better than you would. Freeing the energies of the hive. A multiplier effect. More later.
Police officer Rick Hanna was working out on a stair climber at the Gainesville Health and Fitness Center. He fell off. Patrick, the supervisor, went over, and Rick said, "I just need to rest for a moment." But then he passed out. No heartbeat. A sudden-death cardiac event. Immediately, Patrick started CPR; Kristen, the saleswoman, gave him mouth to mouth; and David from maintenance went for the AED (automatic external defibrillator) and literally broke his hand ripping it off the wall. Still no pulse, but they kept working on Rick. Within 10 minutes, the paramedics arrived. The officer was dead. The paramedics continued to work on him for another 20 minutes, and finally they got a heartbeat. At the hospital, when he woke up, Rick was fine. Amazingly, no brain damage. In the words of Marlene Hanna, his wife, "The cardiologists and pulmonary doctors all say the same thing, had it not happened in your gym, he would not be alive today, and because your staff were so well trained and you had the AED equipment right there. Most importantly, no one gave up. They continued CPR well after the paramedics arrived."
Joe Cirulli owns the Gainesville Health and Fitness Center. You might have seen him on the cover of Inc. magazine. Joe wasn't present, but his leadership was. I have seen Joe when faced with an emergency, and that's exactly what he would have done if he was there. His staff reacted exactly the way he would have.
More good news and bad news. First the bad news.
How many times have you heard of a board hiring a professor to run their company? If you took away the textbook from a business professor, what would he do in the classroom? Nothing. He would have no idea what to do. He can't leap beyond what he knows. He has never been a business manager. He has never had to make a profit. He has no experience, no anchor. Academics can't go beyond what they know. For the most part, they don't know anything except what is in the textbook. It is the difference between being in the stands and playing on the field.
When doing research for this book, I refused to interview any academic whose only life had been at a university. Although many are nice, intelligent people, they live in a world of their own, a silo, without authentic experience. They have no clue about what they have no clue. They will always hire the green PhD as opposed to the experienced businessman, worrying more about accreditation than quality. They write incestuous, dust-gathering, refereed research papers for other theorists to say "attaboy"; and, once they are tenured, they forget about hard work. On a Friday afternoon, if we still had phone booths, you could put all the professors who are actually on campus into one.
What would happen if the White House hired no one but academics to run the country? I guess we know the answer to that one.
We give students a brick of information, followed by another brick, followed by another brick, followed by another brick, until they graduate, at which point we assume they have a house. What they have is a pile of bricks, and they don't have it for long (Krohn).
Business school is nothing but a ticket to the dance. The rules you learn are a betrayed promise. Warren Buffett has it right: "Beware of geeks bearing formulas." No company ever faces a generic problem; it faces a specific problem. It's not that the bricks of the business rules, the maxims, the models don't matter; they do. They just don't matter as much as we think they do. They all sound good, but they don't have much value in the real world. Powell: "Management techniques are not magic mantras but simply tools to be reached for at the right times." Business school starts with cherished management theories and shoves the facts into those theories. Practice always deviates from theory.
Although I have tried to distinguish between relevant and irrelevant concepts, and give only the most important bricks, there is no prescriptive formula. We do not live in a world with simple linear cause and effect. We cannot control or fully understand the vagaries of the marketplace. Equilibrium taught in the texts seldom occurs; disequilibrium is the norm. There is nothing that reduces our businesses or personal lives to science.
Now the good news. If you understand the house, you can understand the bricks. If all you can do is understand the bricks, then you'll never understand the house. We will look at the house, not just at the bricks, and add some mortar. By the time we are finished, you will have a better understanding of which is which.
Model versus Reality
I use models a lot (not the runway kind — I've been married for almost 50 years), both visual and verbal. Models are perfect; reality isn't.
You'll see some new ones here. The three most important are the Strategic-Thinking, Knowledge, and Decision-Making models. For the most part, the elements of these models aren't original, but you might find the systematic progression of the elements new.
Most of the models are two dimensional; a few are three dimensional. Matrices oversimplify. They are useful for understanding a point but do not come anywhere close to capturing reality. Reality is multi-dimensional, with imprecise definitions, unknown knowledge, and unseen interactions.
Some exceptional strategic thinkers have done all of this naturally, without effort, their entire lives. They are the exceptions. Their brains are pre-wired with patterns of thought linking strategy, tactics, and moral reasoning (Gilkey, Caceda, and Kilts). The Strategic-Thinking, Knowledge, and Decision-Making models are for the rest of us; they are helpful checklists to make sure we have covered everything. The more you use them, the more routine and natural they become. Eventually, you won't even have to think about them.
You might have seen the model of Know and Don't Know (Figure 1.1).
This model says there are those who know what they know, know what they don't know, don't know what they know, and don't know what they don't know, such as the professor without real-world experience.
Here's the reality (Figure 1.2).
What we don't know about what we don't know is huge. Far greater than we think. As we gather information and knowledge and make decisions, always remember how many times we don't even know what we don't know.
"Critical thinking" is a term bandied about in universities. What's the difference between strategic thinking and critical thinking? Who cares? There are some scholarly differences, but when you boil it down to its essence, critical thinking is solving a problem and making a decision.
Poker is a game of trying to make the wisest decisions, with imperfect information, usually with only a small edge over your opponents, and forcing your competitors to make difficult decisions. Poker expands the strategic thinking of those who are specialized in what they do and reinforces how to make difficult decisions for those who have to do so all the time.
Both business and poker appear to be simple games. Just make sure your revenues exceed your expenses. Just make sure you have the best hand. But with more subtleties than the novice imagines, both are far more complex. There's an old axiom that poker isn't a card game played by people; it's a people game played with cards. Well, business isn't a money game played by people; it's a people game played with time, talent, and treasure.
Mike Sexton, host of the World Poker Tour, World Series of Poker bracelet winner with over $3.8 million in tournament winnings: "If you approach poker by thinking of it as running a business, you are going to do much better in poker than the average guy will do. In the business world you are constantly gathering information and making decisions. You invest your money and hope to get a return on your investment. Playing poker is the exact same thing."
Howard Lederer, two-time World Series of Poker bracelet winner with over $1.5 million in tournament winnings: "Poker is a series of difficult decisions under conditions of uncertainty."
Charlie Nesson, Harvard law professor and founder of the Global Poker Strategic Thinking Society: "Poker is the quintessential strategic game. The point at which you start to play poker is the point at which you are more interested in what is around you. The point where you look to see what is happening in the environment is where the game starts."
Avery Cardoza, CEO of Cardoza Publishing, the world's leader in poker books: "Poker is the only game that combines luck and psychology." That's a business environment.
Lyle Berman, CEO of many businesses, founder of the World Poker Tour, and three-time bracelet winner: "Poker has made me a more competent businessperson. It helps keep my mind sharp and reminds me that every decision I make has ramifications."
Tony Hsieh, CEO of Zappos.com: "I noticed so many similarities between poker and business that I started making a list of the lessons I learned from playing poker that could also be applied to business."
Why Texas Hold'em?
Poker is to checkers as Texas Hold'em is to chess. Of all the variations of poker, Texas Hold'em requires a high degree of skill and most closely resembles business since decisions must be made under extreme uncertainty by combining probabilities (pot odds, implied odds, expected value), psychology (aggressiveness, hand reading, tells), limited resources (chip stack, bankroll management), public information (the board, the bets, the calls, the raises), proprietary information (hole cards, both opponents' and yours), and luck. As you learn Texas Hold'em, you learn a language and a thought process that can be applied to much more complicated business situations.
The most valuable and business-applicable aspect of poker is how it teaches us to look at things from another's point of view. The ability to put ourselves in the moccasins of our customers, employees, and competitors and understand not just what they think but also why they think the way they do is something we can use for the rest of our lives.
Texas Hold'em is part of the culture of global investment trading firm Susquehanna International Group; it wants "to teach people how to be good decision makers under uncertainty" (McCauley). Kia Mohajeri, a consistent placer in many tournaments, with over $1 million in poker winnings, argues that "Hold'em is a combination of science, art, [and] psychology." The same can be said for business.
If you don't already know how to play Texas Hold'em, go to Appendix B.
"I'm a pretty good poker player," Barack Obama has freely admitted. He is elected overwhelmingly. He immediately multi-tables (war, cap and trade, Gitmo, health care, family). He is looking at the health-care table with pocket Aces (his mandate) and flops an Ace (a majority in the House and Senate). He makes a good bet (but not enough to get the Republicans to fold), assumes he has this hand won, and focuses on the other tables. On the turn, the Republicans catch their inside straight (the Brown Massachusetts victory). Obama reads the board correctly and sees that his opponents have caught, but he is pot committed (with so much political capital) and shoves. On the river, the board pairs, and he wins.
Twain-Swayne. I never met a four I didn't like. My puns, which at maturity are fully groan, humor (or lack of it), and metaphors appear now and then. Like my wife and sons, you just need to read over them.
Poker versus Business
There are some major differences between poker and business. The first is that, while lying is necessary at the poker table, in business it's a recipe for disaster. When we die, we should be proud of the way we played our lives. The second is that, while poker is about 70% skill and 30% luck, business is far more complicated and, other than hard work and persistence, at most is 50% skill and 50% luck. In too many cases, it is 1% skill and 99% luck. The third is that, unlike business, poker is essentially a one-person business. No customers. No employees. As soon as customers, employees, and stakeholders are added into the equation, everything becomes complex.
A few talented poker players can use their thought processes to become business executives. The key word is few. Although the greats do possess strategic-thinking and decision-making skills, some are degenerate gamblers and action junkies who can't make the transition to executive leadership. But aggressive, strategic-thinking business leaders who are experienced decision makers can make the transition to great poker play. Recent World Series of Poker bracelet winners include a TV producer, a patent attorney, an accountant, an investment banker, and a carpet manufacturer (MacMillan).
Excerpted from The Shark and the Fish by Charley Swayne. Copyright © 2120 Charley Swayne. Excerpted by permission of ECW PRESS.
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