by Lionesses of Africa Operations Department
Garry Kimovich Kasparov (one of the greatest Russian Chess Grandmasters that has ever lived) was asked by The Economist magazine how to beat Putin (here) and he started by pointing out that where people get it wrong about Putin was that he was not playing Chess with the world, but Poker. Chess, he said was transparent, every single thing you need to know about the game is always in front of you. Nothing else. “Chess is a 100% transparent game. Information that is available for me at the board, is also available for my opponent and visa versa…A game that is far more consistent with Putin’s capabilities…is Poker.”
We often hear people talk about business being like a game of Chess, yet as our Grandmaster knows, clearly business is not Chess as we do not show our customers all the available information (such as cost of product, our profit margins etc), but it is also not Poker. In fact business has far more nuances than both, many more moving parts and of course many more people involved, which in turn bring their differing thoughts, emotions and so on.
However, where Poker does come to the fore is in negotiation. A recent study of how 35,000 individuals interacted when playing millions of poker hands online during a three-week period, showed how people process strategic information in competitive settings. Note ‘Online’ so there were no reading of nervous twitches, eyebrows rising, or nervous laughter…only the cards in your hand and knowledge of how the opponent reacted in the past, to guide.
Seth Frey, an assistant professor of communication at University of California Davis, said poker experts "pull their informational advantage not from their own cards, and not from their opponents' signals, but specifically from how those two information sources interact.” (here). The study used "No-limit Texas Hold'em variant of poker…because the game is designed to make bluffing a central aspect of play.”
In a nod to our Grandmaster, Frey et al in their study compare the 'complete-information game of chess’ with the ‘incomplete-information…of poker’. In business when negotiating we are indeed in the ‘incomplete-information’ field.
Have you ever been in a negotiation where you have felt out of your depth, that the person you were negotiating with seemed to have all the answers, as if they knew the cards you had in your hand? You are not alone. Negotiations are one of the most difficult parts of business, whether it is with our Bank, Customers, Suppliers, or even our employees. How can we make it more of a level playing field where we can get more of what we want out of the deals?
If this were Chess, all cards would be face up on the table, all information would be open for all. But this does not happen. We do not know our suppliers’ costs, just as we do not know our customers’ needs fully, nor their profit margins or their future plans - so when we negotiate, this has a great deal of the skills a Poker player needs, not a Grandmaster of Chess.
We know our needs; our cards; our competitive advantage (and our weaknesses); even our future plans, but in Poker every little bit of information available is used, and information that is not known, a calculated guess is made based on prior performance, information taken from elsewhere, in fact anything that could assist is taken and used - just to move the odds slightly in your favour, and most of that is on the style of the opponent.
In negotiation we also need to know our opponent/potential partner/customer (‘OPPC’ for ease!), how they will react in certain circumstances and what drives their interest, as well. Recognize their style of negotiation and that becomes information that could tip the balance in your favour.
But to know our OPPC, first we must know ourselves and for negotiation we do that by digging deep to uncover our particular negotiation style.
So let’s start with an easy one:
1) Are you someone who likes to find the win/win, or pushes for the win/lose? (and yes in public we all talk about win/win. But seriously, as our teachers always used to say (well certainly to us!) - “if you cheat, you are only cheating yourself…”). Obviously there are degrees in the middle, so mark that out of 10 with win/lose being number 1 and win/win at 10, perhaps you are a bit of both - that would be a 5 - only you know, there is no right or wrong answer.
2) How is your time? Are you in a rush, are you impatient - mark that as a 1. Happy to negotiate slowly and take your time? - then you are a 10. Again, no right or wrong, just 1-10 with various degrees in between.
3) Are you all about the contract? Getting that binding and irrevocable contract (1), or are you far more determined to build a relationship with a looser one (10)?
4) Once you get to a contract, do you prefer it very detailed (1) and highly specific - ‘The widget must be 13μm wide’ (if you know what a ‘μm’ is, you’ll probably be closer to the 1 mark - trust us), or a generalized agreement, details can be trashed out by the Engineers later - give that a relaxed 10!
5) Then when actually building that agreement, do you agree on the details first and work up to the general parts, so ‘bottom up’ (give that a 1), or are you far more of a general agreement person first and work down into the nitty gritty (top down), that’s a 10!
6) Is your communication style direct, in other words you give and want clear definite statements, intentions and answers (1)? Very loose gets a 10.
7) How do you like decisions taken? Through a team with consensus? That must be a 10, but if you prefer one boss to take the decisions, then that is a 1.
8) What is your personal style like? Are you informal, relaxed and making jokes, then 1 for you. More formal, then perhaps a 7 would suit? Or very formal… you get the idea!
9) Do you show your emotions (10), or hide like the professional Poker player you always felt you could be, give that a 1.
10) And finally - how’s your risk taking? Do you put out an aggressive number just to see the reaction, although that might result in your OPPC just getting up and leaving the room? Are you willing to lose everything? That’s a serious 1! A low willingness to risk, gets a 10.
That’s it! However, sadly, this is not where we ask you to add up all your results…and the winner gets…apologies to all of you who gave yourself a very serious ‘1’ for the ‘win/lose’ question! There really were no right or wrong answers!
Now the fun part. Go through those questions again and based on where you believe your OPPC is, mark them out of 10 for each of those attributes or styles. Helpful hint: Start this with a colleague, then you can work through this together at the end (no point them knowing your cards at this stage!).
At this point you are already a winner because a) you have taken a moment to work out how you approach negotiations, and b) you have written down what you think is in your OPPC’s hand, what their style is and how they want negotiations to progress. As Frey et al point out, “Sharks [their name for winners - that should be you!] and fish [aka losers] show no difference in the total information [they have, but] Sharks seem to distinguish themselves [by] how they process and manage those bits.”
Here is the really fun part. You have processed to the best of your ability the information you have (your ‘cards’ and your OPPC’s style), this gives you potentially an edge. At no point are we suggesting you give up on what you want or ignore your ‘lines in the sand’, this is not an exercise in lying down on the floor for them to walk over you. And we certainly don’t mean transform yourself as Taylor Swift did for her music video ‘The Man’, as we all have to remain true to ourselves, but instead to recognize the style of your OPPC and simply adapt your style towards (N.B. ‘towards’, not ‘to’) theirs which will start to move the dial in your favour, it will give you the ‘edge’.
How you use that edge, how you manage it, how you add value to the value already in your ‘cards’, even if it is to produce a win/win that you want, is now all up to you.
According to the study: “Professional poker players are experts at extracting signal from noise across many channels, and at integrating information from those channels both to exploit their opponents and protect themselves… In high-stakes competitive environments, success is not just about playing your cards right, but also playing your opponents right…poker experts pull their informational advantage not from their own cards, and not from their opponent's signals, but specifically from how those two information sources interact.”
You will never get your OPPC’s styles completely correct, but even a small movement towards understanding their style and how that can be used to your advantage to even out the odds and create what you want, must be a good start!
Stay safe.