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Business decisions amid coronavirus have ‘everything’ to do with poker: Annie Duke

·3 min read
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No company could have foreseen the coronavirus pandemic, but they all felt its impact. Newly vital companies like Zoom (ZM) and Peloton (PTON) prospered while entire sectors tanked, forcing the closure of hundreds of thousands of small businesses.

In a new interview, behavioral scientist and former poker champion Annie Duke argued that the pandemic has illustrated exactly why business decisions have “everything” to do with poker — a game in which savvy players maximize their likelihood of winning but outcomes ultimately depend in part on chance events beyond anyone’s control.

She explained how a better understanding of the way poker players incorporate “partial information” into their decision-making can inform how businesses respond amid COVID-19.

“Look at the pandemic,” Duke says. “If we were opening up a retail shop in October of last year, you couldn't have seen that this was just a matter of luck.”

Annie Duke, a behavioral scientist and former poker champion, appears on "Influencers with Andy Serwer."
Annie Duke, a behavioral scientist and former poker champion, appears on "Influencers with Andy Serwer."

“It's like a bad turn of a card; there are also good turns of the card,” adds Duke, the author of a new book, “How to Decide: Simple Tools for Making Better Choices.” “And then there's just a lot of stuff that you don't know when you enter into negotiation — you don't know what cards your opponents are holding.

“You can see where that map's on really nicely so that [if] we can understand poker decision making, we could know something better about decision making away from the poker table,” Duke says.

‘Nobody has planned this pandemic’

A string of strong earnings reports from tech giants in recent months showed thriving business amid the COVID-19 pandemic, which has forced many Americans into their homes and induced further reliance on services like e-commerce and streaming entertainment. The tech giants have also propelled gains in the stock market, even as many Fortune 500 companies have struggled.

Some successful companies have acknowledged that an unexpected boost from the pandemic owes in part to luck.

“I would have loved to say that we had planned it perfectly. Obviously, we didn't. Nobody has planned this pandemic,” Zoom COO Aparna Bawa told Yahoo Finance reporter Dan Howley this month.

A poker player’s mindset mirrors the business leader’s lack of certainty over how circumstances will unfold and incomplete information about what competitors will do, said Duke, who made it to the final episode during a season of “Celebrity Apprentice” in 2009.

“So that makes my judgments under those circumstances subjective,” she says.

Duke spoke to Yahoo Finance Editor-in-Chief Andy Serwer in an episode of “Influencers with Andy Serwer,” a weekly interview series with leaders in business, politics, and entertainment.

In recent months, companies in sectors devastated by the pandemic — like travel and dining — have called for bailouts, citing the disastrous fallout from an unexpected crisis. More than 100 current and former chief executives at major companies advocated in August for additional federal aid for small businesses, as companies felt economic strain following the government’s initial infusion of cash through the Paycheck Protection Program.

“It is a defining moment to show how capitalism can benefit all Americans, particularly entrepreneurs who have been forced to shutter or reduce the capacity of their businesses through no fault of their own,” the current and former CEOs wrote in a letter to congressional leaders, acknowledging the unusual circumstances.

The sentiment of the letter echoed a lesson that Duke draws from poker: “When we make business decisions, we don't really know what the future holds,” she says.

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