In 2009, researchers analyzed 103 million online Texas hold 'em poker hands and made a fascinating discovery...
Across all those games, the best hand dealt only won 12% of the time.
The other 88% of hands were won by the most skilled player at the virtual table.
They validated that Texas hold 'em is far from pure gambling and that players' skills will overcome the poor luck of the draw over time.
It turns out that the ability to read other players, to understand the value of a hand, to make convincing bluffs, and to intuit odds are far more likely to produce a winning outcome than which cards a player was initially dealt.
Poker Players Alliance (PPA) Chairman Alfonse D'Amato commented,
"As a poker player, I can tell you that knowing when to hold or fold is not based solely on the cards that are dealt, but a series of decisions based on skill and the actions taken by other players."
As with poker, the best teams in B2B tech have a better chance of winning, even if they are dealt a bad hand.
And it's safe to say that most B2B tech firms currently hold a poor hand.
Rising interest rates, persistent inflation, and geopolitical uncertainty have caused the bottom to drop out of corporate valuations of both publicly and privately held growth companies.
The tailwind of seemingly limitless growth prospects and funding is gone.
We've been forced into a game of skill, and many companies find themselves flat-footed regarding the strategic decisions and operational execution needed to adjust to this rapidly-changing landscape.
As Warren Buffet famously said,
"Only when the tide goes out do you discover who's been swimming naked."
The companies that navigate this downturn with skill and finesse will emerge as victors, despite the trash hand they've been dealt.
Several survival skills will separate the winners and losers in the quarters ahead. In no certain order:
- Focus on people - We must prioritize our people and treat them with dignity and respect as organizational structures are adjusted and downsized. If a company must downsize, people will remember HOW it's done. Communicating often, with greater transparency and a realistic outlook, is also crucial. My CEO has produced a weekly, company-wide video message every Wednesday since the pandemic began. His commitment to consistent communication has profoundly impacted our team members.
- Speed in decision-making - The ability to quickly make critical decisions will depend on the trust between leaders, team members, investors, and customers. I've always found the reversible vs. consequential decision matrix to prioritize the speed vs. quality of decisions management teams need to make.
- Picking strategic focus areas - Taking a step back, looking at all of the initiatives the company (or team) is pursuing, and choosing fewer, more impactful projects to devote attention to.
- Good old-fashioned execution - Strategies don't usually fail because they are wrong (sometimes they are bad, but I digress...). They fail because they are executed poorly. Execution is a matter of operationalizing activities, enabling teams, selecting and monitoring leading and lagging metrics, listening to feedback, maintaining accountability, and coaching team members; it's tenacious follow-through on the mundane, daily activities that support your strategy. As Peter Drucker famously said, "What gets measured gets managed."
- Listening to customers and frontline employees - Decisions are more effective when we understand what's happening in the end markets we serve. As an executive, I'm not settling for surveys and second-hand information from customers, prospects, and frontline team members as a proxy for insights. I want direct, qualitative feedback upon which to make decisions.
Exercising these skills allows us to control what we can control, learn as we go, and maintain the hearts and minds of our stakeholders.
Even a novice will win a hand of Texas Hold 'em from time to time. But over time, the skilled player will prevail.
The tide is out for the B2B tech industry.
Do you have a bathing suit on?
Note: I got the poker story from Tim Riesterer of Corporate Visions at a roundtable hosted by my company's private equity owners in 2022. I would highly recommend checking out Tim's go-to-market research and associated talks.
💡 Weekly Favorites
Here are some of my favorite podcasts, blogs, and videos from the week:
- Per Jason Lemkin on LinkedIn on the state of venture and growth capital, "So while you'd think all this so-called 'dry powder' [cash in investment funds] will create investment velocity, really for now, in 2023, it's the opposite. Right now, VCs' own investors just don't want them to call it and invest it. They're overloaded already."
- I talk about business acumen in customer success a lot. CS leaders and CSMs should have a working knowledge of commercial terms and negation, even if they are not directly responsible for revenue. This post from Chis Orlob is an excellent example of negotiating contractual terms properly and is instructive to CSMs who are building their skill sets in this area.
- Study Reveals Poker is a Game of Skill (2009)
Enjoy, and I'll see you next Sunday.
Do you want to share this issue of customersuccess.io via text, social media, or email? Just copy and paste this link: www.customersuccess.io/stop-trying-to-delight-customers-and-decrease-their-effort