Happiness and psychology in business: What do “poker” and business have in common?
“It’s fortunate that I’m not just lucky because of my luck.” This statement could come from a successful entrepreneur or manager who works cleverly, hard, and persistently for his success – from someone who knows that happiness is not which can be the sole basis for business success, but which “ingredients” guarantee everyone’s desired success? How can success and failure in business be explained concretely? Many authors from the “mystical corner” have already dealt with the above-mentioned questions, in
contrast to this article is intended to make a purely factual contribution to the Enlightenment.
The “ideal emergence” of business models
In theory, there is an “ideal way” that should be followed when creating business models:
- At the beginning, before the actual emergence of the business model, is the inspiration from which the business idea results.
- This is followed by market exploration to gather relevant data on the market environment, competitors, trends, etc. that are to be analyzed and evaluated in the course of analysis in order to draw conclusions for formulating the future business strategy.
- Strategy and tactics are to be formulated and a business case is to be prepared which describes and calculates various business processes (normal, best and worst case) in detail.
- Only then can the original business idea be evaluated, finally formulated and become a concrete business model. However, the practice often shows completely different approaches. For some, the business idea can be combined with a “let’s just do it” in order to implement a business model or a specific approach in a company, a phenomenon that can be found in individual companies as well as in financially strong corporations without professional design and validation such cases money, labor and time invested “after feeling”. And if it does not work, it quickly says: “We were just unlucky.”
Work like a poker player That this has little to do with luck or bad luck is quickly explained by the following analogy. If we look at strategy games like “poker” or “backgammon”, each observer quickly realizes that it does not take much time to learn the rules of the game. But still only few players master the complexity of the respective game.
The game theory of “poker” or “backgammon” is based on calculating probabilities of occurrence. If a certain card or a certain throw is needed, then the percentage chances can be calculated exactly.
Depending on the game situation, there are different strategies and tactics to either maximize one’s own winnings (if all goes well and you’re lucky) or minimize losses (if luck is not on your side). In the
medium to long term, however, the better game always prevails, which has been proven by innumerable analyzes.
The example teaches us that a good to very good understanding of the game as well as far-reaching strategic and tactical abilities combined with a “certain amount of luck” make a game more likely to win than for someone without special skills who can only rely on his luck “Hans in luck” also win many games, but not permanently. This fact is favored by the fact that luck is usually not affectionate”, but instead, here and there, sometimes – not only the opponent, but also one himself.
The 2/3 chance
Imagine, a trustworthy man proposes to you the following game: You roll a cup with a dice. If a “one” or “two” falls, then the challenger wins, with the other four numbers you win. For every throw, the loser pays one euro to the winner.
Would that be a profitable game for you?
Of course, with 2/3 your chances are twice as high as your challenger’s (1/3), so you’d probably win 66.7% of the games over the course of the evening. In the course of weeks, months and years you could earn a small fortune. You simply owe this to a competitive advantage that your challenger did not seem
to have considered. (Honesty is mandatory in the example)
However, the dice game described above is pure gambling contrary to the strategy games such as “poker” and “backgammon”. If everyone had three numbers to choose from, chances would be the same, and a win would be pure luck. Only the aforementioned constellation makes the win for the challenged with 66.7 percent secure in the long run.
Casinos realize huge profits even with minimal advantage. A player who has won a lot on an evening will be seduced by a free suite, etc. to continue playing, because in the long run always wins the casino. The mathematical advantages guarantee this, even if this certainty is recorded by the fewest players. The search for competitive advantages and the calculation of probability of occurrence By analogy with our business model, this means that in business (such as the poker or backgammon player) we should also look for a competitive advantage when we examine the framework conditions for formulating our corporate strategy. In addition, we should not only know the rules in our business environment, but develop various superior strategies and tactics with the goal of domination of our opponents. We should be able to accurately calculate our chances and predict scenarios with high probability of occurrence.
Of course, luck always plays a role, but it is, if anything, difficult to influence. However, good positioning helps us to maximize our achievements when luck is on our side and to minimize our losses when we feel abandoned by luck.