Learning how to play your cards right in business will maximize your potential for success. Executive decision-making requires you to do the right thing in a high-stakes situations with imperfect information. Just like in any card game.
Its risky, yet the rewards outweigh the risks by far.
There are several styles for playing your cards, depending on your personality and which style you use, you either take a high risk, or low risk. We can divide them into four categories: 1- Tight & Passive, 2- Loose & Passive, 3- Loose & Aggressive, and 4- Tight & Aggressive.
In the Tight & Passive style, you always play it safe, and your risk is very low, however, you will never win big either. Whereas in the Loose & Passive, you are willing to take the risk, however, your decisions are not backed by an exit strategy, and this will make you fall hard if you lose. In the Loose & Aggressive style, you are a high risk taker, but if you end playing the wrong card, you will end up losing everything, unless you are backed up by your funds, knowledge and confidence. The best style is the Tight & Aggressive, because in this style you pick your spot. You carefully watch how others play, and you wait patiently for advantageous situations. The key skill here is good judgement. You know that when you proceed with a decision, you will win. At the same time, you know when to hold your cards. Your risk here is minimal.
Apart from your style, self awareness is perhaps the most important ace you can have up your sleeve. Knowing your personality, strengths and weaknesses, and risk-tolerance can help you to make better-informed decisions in the business world. You will be able to arm yourself with skills that will set you apart from others.
In addition to self awareness, it comes down to the behaviors, the variables, the decisions – not the outcome. This is called the “Outcome Blind” situation, where you deal with what you know, however, you also have to take the risk to make an important business decision, with information, that to some degree, is imperfect, due to the fact that it is incomplete. The probability of failure is 25% or more, so the outcome is not 100% in your control. However, the process is completely in your control.
The best protection against bad decisions, is a strict and precise decision-making process that ensures the math is on your side. You need to discuss all the variables, and a get a buy-in from the entire team on the probabilities assigned to each of these variables. People feel good about the intellectual honesty and the quality of the decisions making process.
In bad times, outcome-blind self-evaluation requires the confidence to believe good decisions sometimes yield bad results. In good times, it requires the wisdom to tune out surround-sound flattery & applause, which comes at you from yourself, your investors and your employees.
In summary, you can’t be smarter than the market. Too many variables. Too much uncertainty. But you can be smarter than your rivals if you keep learning. By evaluating your decisions in an outcome-blind way, driving decisions with a clear strategy, you can make sure the percentage of what you understand is greater than your opponents, and the chances are much higher that your business decisions will yield good results.