Do you lead like a chess player or a poker player?

Legends spanning history from Marcus Aurelius to Bill Gates to Scott Adams have acknowledged the role of luck in achieving success. Despite this humble and public affirmation of chance’s important role in business success, the social connotations of “games of chance” (better known as gambling) are resoundingly negative.

Ashok asks how much is luck: Dilbert by Scott Adams

Answer quickly, chess or poker: which game has more prestige? Which game has an extra-curricular club with its picture in the high school yearbook? Which game gets played late into the night on boozy weekends with college buddies?

While I’ve never had the patience to improve my skills at either chess or poker, I grappled with this apparent societal contradiction for decades until a recent interview with Annie Duke, author of Thinking in Bets and other brilliant books, brought it all into focus for me.

I’m now convinced that teaching my daughters how to play chess instead of poker would be a major Dad Fail.

The key idea that brought it into focus for me is what Annie Duke calls “resulting.” Learning occurs when we reflect on the outcome of a choice we made, to inform our future choices. As Ray Dalio puts it, “pain plus reflection equals progress.” Daniel Kahneman, and others, explored how biology and society influences our decision making. In the realm of games, chess is deterministic: both players have all the information, and winning or losing a game is causally linked to the quality of decisions you make. Poker, however, is probabilistic: each player’s information is limited, and the outcome of any hand depends to some extent on which card flips over in front of which player (and their seating arrangements), so winning or losing a game is always a combination of decision quality and luck.

“Resulting” means categorizing a decision as good or bad based on whether the situation yielded a positive or negative outcome. This behavior drastically undervalues the role of luck in outcomes, and risks cementing poor decision making habits into the fabric of an organization. Conversely, active separation of the decision from the outcome, and objectively attributing the outcome to either luck or skill, is essential to improving decision making quality.

Business is a game of chance. The outcome of any complex scenario, whether it is an enterprise sale or a marketing program or a fundraising round or an executive search, depends somewhat on which events unfold in which order. In an organization led by a chess player, positive outcomes arise from “good” decisions alone, and negative outcomes arise from “bad” decisions alone. The implications are significant and pervasive: who gets promoted (or fired), which tactics become “best practices” (or taboo), etc., could all be a function of luck. Confirmation bias (among others) becomes cemented in the leader’s inner circle. In an organization led by a poker player, the culture includes open discussion about confidence levels and risk reduction, constructive dissent (i.e., playing “Devil’s Advocate”), and active eradication of cognitive bias.

So consider what example you set for your team, how you coach them to to make better decisions, who you involve in pre- and post-mortems of significant decisions you make. Are you “resulting” or are you leading them like a champion poker player?

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Confront your deepest fear to defeat “The Peter Principle”

I learned today that the origin of a couple expressions I had bumped into many times in my career is a satirical book published in 1969 called The Peter Principle. Those axioms are:

  • People are promoted to the level of their incompetence
  • A players hire A players; B players hire C players

Neither of us are going to get any further ahead until we confront our deepest fears.

At first I chuckled at the humor of these observations that probably helped spawn characters in Dilbert and Office Space. After more consideration and reading a comprehensive book summary, I wondered “is this really an inevitable plateau we all face? What if I am already there?”

Reaching the limit of competence means being unable to perform at the scale or complexity of a new position. It’s easy to imagine (or remember) a situation like these: the diligent accountant who struggles to manage people, or the technically impeccable engineer who is paralyzed in sales conversations. Disappointingly, overcoming these plateaus is not an option offered in Peter’s book. But you can do it, and you can coach the people on your team to do it as well — as long as you are prepared to face your deepest fears.

Getting past the transition into any new job — meeting the people, learning the vocabulary, finding the coffee machine — a person will have to find a new winning strategy (see Goldsmith) in order to perform at a new level. This will require identifying and confronting your deepest fear (see Deida). In the examples above, perhaps the new accounting  manager is will alienate direct reports because she is afraid to show vulnerability and humility. And if the engineer is afraid of being labeled a “sleazy salesman,” he will never earn the trust of a customer.

So stay on the lookout for the Peter Principle in your organization, just don’t accept it as an inevitable consequence.