Top poker players talk about the need to ‘shift gears’. Playing styles can be categorised as ‘aggressive’ versus ‘passive’, or ‘tight’ versus ‘loose’. While players might have a general style (eg. ‘tight aggressive’), the best players need to have the ability to play with different styles. Not only does this throw the competition’s read of you off, it also provides the most appropriate driving to the context of the table. A group playing ‘on the bubble’ (ie. one more to be dropped without hitting any prize money) might play more conservatively in general providing an opportunity for a player who applies a bit more aggression.
Risk is not just some stand-alone characteristic to key decisions (like whether to raise or fold). Rather, risk is the environment in which all business (and lives) exist. It is the undulating sea on which they sail. Adding to the hazard is the fact that most people overcompensate for every up and down. A windfall becomes a bubble and a downturn becomes a panic. John Lancaster describes this phenomenon in his book Whoops!…
- “From a historical distance, the house market is a dead-safe, dead-boring thing. Look at the graph of house prices, though, and it isn’t like that. The overview shows steady, predictable progress; the close-ups show that house prices go and down like a bride’s nightie. When Gordon Brown promised us ‘an end to boom and bust’ he was promising something no British politician has ever achieved. All markets over-correct: they go too far on the way up, and then they go too far on the way down, which provides momentum for then to go too far up again next time.”
This overcompensation is reflected at a macro-level with the all too familiar ‘booms’ and ‘busts’. In poker, a downward spiral is called being ‘on tilt’, and a ‘rush’ or a ‘heater’.
Job one for all executives to deftly navigate this ocean of ups and downs by shifting gears without over steering in either direction.