Decision-making Strategies from Poker Champions

During the holiday break, I read The Biggest Bluff by Maria Konnikova and Thinking in Bets by Annie Duke. Both use poker as a means to understand decision making. Many of their points are similar, and they were both mentored by some of the same greats (Erik Seidel, Phil Ivey, etc.), but The Biggest Bluff is the story of Konnikova's journey from novice to professional player, while Thinking in Bets is more of a business/self-help book based on Duke's experience as a World Series of Poker champ. What follows is not a review of the books, but my notes - basically, the points that resonated most with me:

Separating the decision from the outcome

In poker as well as life, both luck and skill affect everything. You can make a great decision but have a bad outcome, and you can make a terrible decision and still have a great result. To learn from your decisions, you have to try to be as objective as possible (both authors acknowledge that it’s very hard for humans) and separate the quality of the decision from the outcome.

Avoiding tilt

Tilt is a term that poker players use to call out any trigger that causes emotions that interfere with good, rational decision making. Through self awareness, your goal should be to do what you can to avoid those emotions. For example, Konnikova learned that misogynistic comments from opponents tilted her and caused her to play against stereotypes instead of just playing well and making the best decisions to win. Thinking ahead, she started wearing noise-cancelling headphones when playing. (She noted that she could still hear conversations at the table, but headphones helped her not feel like she had to respond to those players.) She also writes about taking a step back to work with a performance coach to understand her triggers, where they come from, and how to keep them from interfering with her decisions.

Duke writes about the concept of the Ulysses contract from Homer's Odyssey, and how Ulysses (Odysseus in Greek) made sure that his crew didn’t respond to the call of the Sirens even though he wanted to hear it for himself. He instructed his crew to put beeswax in their ears, and he tied himself to the mast, and although he almost went insane from the song, his crew avoided crashing into the rocks as they passed the island of the Sirens.

In a more realistic example, Duke writes about how using a ride-sharing service to go to a bar is a way of preventing your future self from making an impaired decision to drive home after a night of drinks. Again, these Ulysses contracts raise a barrier against irrationality.

No “bad beats”

Both authors learned from Erik Seidel that complaining about their run-ins with bad luck is highly unproductive and forms bad habits. He only wanted to talk about strategy and decisions - "the process, not the luck." In fact, he told Konnikova that he didn't want to hear how her games ended, he just wanted to discuss how she played.

Taking pride in being objective

Duke writes about changing the habit of talking about bad beats and playing up lucky wins by seeking to be known and rewarded for being the most objective person in the room. She writes about how Seidel was respected for not bragging about wins but actually sitting with peers and breaking down how he could have made better decisions, even after winning.

Truth-seeking pods

In both books, the authors have support systems for objective discussions. For Konnikova, it’s Seidel. For Duke, it’s Seidel as well as her brother, and she writes about how to seek out or form a group, how to set a charter for the group, and the positive effects of participating in such a group. One example is knowing that she would have to explain bets to the group, and how that would help her make better bets in the moment (the power of accountability).

Scenario planning

Duke writes about looking at all possible outcomes from a decision and assigning probabilities to them. As a practical example, she helped a nonprofit optimize their resources by understanding expected value of their grant proposals.

Working backwards

Duke notes that research shows that “prospective hindsight” - imagining an event that has already occurred - increases the ability to correctly identify reasons for future outcomes by 30%. There’s an HBR article about the corresponding experiment: Performing a Project Postmortem.

One of Duke’s methods is called backcasting. It’s similar to what Amazon does when they create a press release at the beginning of the project. Duke writes about starting with a newspaper headline that reads something like “Company X (your company) achieved Y goal” and thinking about how you got there.

Also, Duke covers premortems as a complement to backcasting - backcasting is imagining a positive outcome and the path that led there, premortems are when you imagine a negative outcome and figure out how to mitigate the risks that led to that result.

Thoughts?

I hope these notes are useful. If you've used some of these strategies/tactics or have any thoughts or questions, please leave a comment!