About Risk

“Sometimes you have to do the wrong thing at the right time.” -Robert Varkonyi , 2002 Word Series of Poker Champion

“All in,” he declared, time and time again, pushing his entire stack of chips to the center of the table. If he guessed wrong, he would be eliminated, but if he guessed right, he would double his stake at the table.
One-by-one the professionals went down to the amateur, surrendering their chips to his ever growing stack. He entered the final table at the tournament with the fewest chips of anyone, and pulled off the biggest upset in poker history, winning the coveted platinum bracelet at the 2002 World Series of Poker.
His play throughout the tournament was risky, going heads-up with former champions and challenging them at their own game
“Who is this guy?” – the other players at the final table must have thought. And those are the thoughts of earlier players he knocked out, such as former champion Phil Helmuth who stated, “If Robert Varkonyi wins, I’ll shave my head.”
And win he did, becoming one of the most improbable World Series of Poker Champions ever, and picking up a two million dollar prize for his trouble.How did an amateur player beat professionals who have been living and breathing poker for their entire adult lives?
Luck, you say? That’s what most would think.
While an outside observer might say that poker is all luck, any experienced player or fan will tell you this is not the case. Over the course of a week long tournament the luck will even out amongst the players. The one who wins will be the player who best plays the cards they are dealt.
The truth is that what won Varkonyi the title was his bold play and willingness to take a risk.
Surely this is a lesson for all of us entrepreneurs.
Do you sometimes feel outgunned, out financed, and outmanned?We can increase our chances of success as by doing specific things. When you think about it there are aspects of our business that we may not be able to change very easily. These include location, ability to locate needed employees, financing or additional initiatives. These can all be very costly and time consuming. What we must do, however, is most effectively play the cards that we have been dealt. We must accept those things that are fixed (much as a poker player must accept the cards they have in their hand), and figure out what the best “play” is with them. We can compensate by capitalizing on our strengths. This could be viral campaigns, networking, creative marketing, collaborative partnerships with other businesses, perhaps sourcing interns from local colleges and so on. The action will vary with the “hand” you’ve been dealt.
You must also pick and choose where you decide to wage your battles. In poker you can fold on hands that you know are losers so that you apply your chips towards hands that you have a better chance of winning. This strategy can be applied to your business as well. Perhaps going to a tradeshow isn’t the best move, or if you’ve never been, maybe it’s worth trying. Selling only through distributors? Maybe adding a direct sales channel will be a good idea. Or if you only sell direct, resellers may be the way to go. These will vary from business to business and situation to situation, but you must decide where to spend your resources of time, money, and opportunity so that they give you the highest probability of success.
The game of poker appeals to me as a business consultant because there are many parallels with the world of business. You can’t change the cards that you’re dealt but you need to make the best of them. Often times, playing it safe isn’t necessarily playing it smart – even in cautious times.
As is the mantra of Brian Tracy, author of “Create Your Own Future,” you make your own luck. Those people we view as being lucky are people who did things to increase the chances that they would be able to take advantage of the opportunities that present themselves.
Go out and create some luck for yourself, as Mark Deo likes to say, “It’s about increasing the chances of success while decreasing the probability of failure.” Figure out what the best play is based on the chips and cards you have, and make them work for you.
Don’t be afraid of risk. To not take a risk is to risk being ignored. “Destiny is not a matter of chance, it is a matter of choice. It’s not a thing to be waited for, it’s a thing to be achieved.” Let’s go from a “risk aversion” business culture to a risk sharing and reward innovation culture.
In short, risk-taking is as much a part of good management as smart product development, effective marketing and strong leadership.
I hope that this “Business Update” has been helpful in assisting you to improve the performance of your organization. For more information on how the Small Business Advisory Network assists companies in improving their performance, please feel free to contact us at 310-320-8190 or email mdeo@sbanetwork.org
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