Poker Can Explain Why You Make Bad Business Decisions

Risk playing cards

There is this fascinating article in Forbes Magazine (A Poker Champion Explains Why You Make Bad Business Decisions) that can make a case for augmenting an outcome-based performance management system with a  more process-focused performance management.

How does a company strike the right balance? The more complex and more fluid the market, the more important process metrics become.

Ultimately, the company should focus on building the right process. You may not get the right outcomes everytime but each failure is a decision point:
1. Is the process still valid, all things considered? (In this case, keep the process despite the unfavorable outcome.)
2. Have circumstances and underlying premises changed? ( Refine the process to accommodate the expected future impact of news.)
3. Does the unfavorable outcome give new insight on hidden process flaws? (Reengineer – fast!)

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