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PODCAST 31: How a World Series of Poker Winner Uses ‘Bets’ in Decision Making to Improve Outcomes w/ Annie Duke
Annie is a former World Series of Poker winner and has written an incredible book detailing how thinking in bets can improve outcomes. In this episode, we take those concepts and apply them to sales.
If you missed episode 30, check it out here: PODCAST 30: How High Performing Sales Teams Scale past $50 Million ARR w/ Matt Millen
What You’ll Learn
- How to use thinking in bets to improve your selling
- How to focus on the process vs the outcome to understand decision making
- What is “resulting”?
- Strategies to improve decisions and understanding how decisions are bets in themselves
- How poker relates to life and using poker strategies to improve life outcomes
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Show Agenda and Timestamps
- Show Introduction [0:09]
- About Annie Duke: An Introduction [2:00]
- Identify the Quality of the Outcome to Find the Quality of the Decision [16:16]
- How to Approach an Expected Value With Difficult Data [30:05]
- Have a Willingness to Keep an Open Mind and Seek Out Other Opinions [45:02]
- Sam’s Corner [56:45]
Sales Hacker Podcast—Sponsored by Aircall and Outreach
Sam Jacobs: Hey everybody. It is the Sales Hacker Podcast. Today we’ve got an incredible interview because we’ve got Annie Duke, the world famous poker player. She won the World Series of Poker a few times. And she’s also exceptionally insightful and she’s written a book called Thinking in Bets. Before we get into the episode, let’s thank our sponsors.
The first is Aircall. It’s a phone system designed for the modern sales team. They seamlessly integrate into your CRM. They eliminate data entry for your reps and they provide you with greater visibility into your team’s performance through advanced reporting.
Our second sponsor is Outreach.io, the leading Sales Engagement platform. Outreach triples the productivity of sales teams and empowers them to drive predictable and measurable revenue growth by prioritizing the right activities and scaling customer engagement with intelligent automation.
So, without further ado, let’s listen to the interview with Annie Duke.
About Annie Duke: An Introduction
Sam Jacobs: Hi folks, it’s Sam Jacobs, welcome back to the Sales Hacker podcast.
We’re incredibly excited for our guest today, Annie Duke, who is an award winning author, professional speaker, decision strategist, and also former professional poker player. Annie has just released a book called Thinking in Bets, Making Smarter Decisions When You Don’t Have All The Facts. For two decades, she was one of the top poker players in the world. In 2004, she won the world series of poker.
She’s also, by the way, a student of cognitive psychology and now spends her time writing, coaching, and speaking on a wide variety of topics. She’s a master storyteller. We’re incredibly excited to have her here on the show.
Annie Duke: Thanks for having me, Sam.
Identify the Quality of the Outcome to Find the Quality of the Decision
Sam Jacobs: Sales, by definition, is probabilistic. One of the key concepts in the book that you articulate is this concept of “resulting”. So walk us through what that means because it’s probably the most prevalent thing that happens, certainly in sports, but really, in life. So tell us what the definition is.
Annie Duke: “Resulting” is essentially working backwards from the quality of the outcome to the quality of the decision. It’s basically saying if I can see what the quality of the outcome is, then that tells me what I need to know about the quality of the decision.
What we learn from this is that we think, if we have a good outcome, if we close the sale, we obviously had a brilliant process and we should try to repeat that and we should be patting ourselves on the back for how great a job we did.
But, if we see somebody not close a sale, then we’re much more likely to point fingers and try to dig in and look at where the mistakes were and where the blame was.
But what we know is that things that turn out badly aren’t necessarily just because of mistakes, and things that turn out well aren’t necessarily mistake free.
How to Approach an Expected Value With Difficult Data
Sam Jacobs: Again, whether it’s sales or any other aspect of life, people fundamentally misunderstand the notion of expected value. So my world is enterprise sales and there are 12 month, sometimes 18 months sales cycles. How do you deal with the situation where the expected value is fantastic, but the forecasting of the deal is difficult? There’s this “resulting” problem where I don’t have enough feedback in order to adjust and improve the process.
Annie Duke: That’s a really interesting question. One of the problems in poker is that you’re getting so much feedback that the path that you’re on becomes very, very clear to you.
We tend to we field outcomes in sequence and the decisions that we’ve made about each outcome affect the way that we think about the next outcome. The way that we feel about it, the way that we think about it, the way that we analyze it, it’s very path dependent. So you’re right, there’s quite a bit of upside to poker in terms of the shortness of the cycle. You get feedback off your decisions within 30 seconds.
So when you have a slower sales cycle, obviously there are challenges that come with that just in terms of you don’t have as much data to work with to make your guesses and it’s a slower process. It does allow you to approach it in a little bit more of a rational way.
Very often, the answer itself that comes in is very remote from a lot of the initial decisions that you made. It might be 18 months before you actually get to the result and a lot of stuff can happen in 18 months that you literally have no control over.
That can make it hard to sort out what should I have known or what could I have known versus what was reasonable for me to know.
Sam Jacobs: Yeah, I’m judged on a time interval that doesn’t give me enough data to really build an efficient decision making process around these types of deals.
Annie Duke: One of the ways that I recommend that people deal with this outcome bias with “resulting” is to deconstruct the decision process prior to the outcome ever having occurred. And if you can’t do that just because of time constraints, then you should deconstruct the decision making process with people who you don’t tell the outcome to. You have to do a lot of really good work to work through what strategy you’re going to use and make these reasoned estimates as to what the expected value is of that particular opportunity. And once you’ve made that reasoned estimate of what that expected value is, then everybody has to buy into it. And there isn’t a right answer, because it is probabilistic in nature and what you’re trying to come up with is your best guess.
Have a Willingness to Keep an Open Mind and Seek Out Other Opinions
Sam Jacobs: What are some methods that people can use if they want to embrace this concept of probabilistic outcomes and working on their decision making process? What are a few mechanisms that are useful?
Annie Duke: The first thing is to actually ask yourself “Would I be willing to bet on this?”
What if someone came up to me and said “do you want to bet?” How would I feel about this? It actually causes this uncertainty to bubble up where you start to view it in a more realistic way.
The main actually thing that I would say is go talk to other people who have different perspectives and make sure that the person that you’re reporting to is part of the process and you’re getting their perspective as well–motivated reasoning.
This is really part of the way that our brains are wired. And confirmation bias and hindsight bias and all of these things, it’s just very hard on her own for us as individuals to be able to overcome. The good news is that when we get away from ourselves and we start to look at other people, we can actually see bias in other people pretty clearly.
Sam Jacobs: A willingness to change your mind is a hallmark of intelligence. If you can’t change your mind with when presented with new information, then it’s clearly not an objective opinion that you have.
Annie Duke: I don’t want to say that the goal is to change your mind every single time that you hear an opinion that disagrees with you. But when you really listen with an open mind to opinions that disagree with you, either your mind will change or you will not only better understand your opinion because you will have had to defend it.
If you just go around and you think “what I’m seeing is the objective truth,” then when someone sees the world differently than you, you just automatically think they’re wrong. So I should always be trying to calibrate this, and I should always be listening to other people who view the world differently than I do with an open mind because maybe they have something more right than I do.
Sam Jacobs: That’s fantastic. Annie, thanks for joining us.
Annie Duke: Thank you so much for having me.
Sam Jacobs: Hey folks. This is Sam’s corner. Was really honored and excited to have Annie Duke on the show. Her new book is called Thinking in Bets, and the whole point of it is that we have to understand that decisions are bets on the future. I think that’s a really interesting way of thinking about it. When you’re “resulting”, which is focusing inordinately on outcomes, you’re not getting the whole picture. When it comes to sales, it specifically comes down to forecasting accuracy as an important determinant of the efficacy and success of our work process and of our sales process.
And we also have to not inordinately focus on the outcome because the outcome is a result of a series of probabilities. We have to understand statistics and focus on the most probabilistic outcome understanding that probability means that sometimes it’s not going to go our way. I think it’s a really helpful framework, and it helps keep us and keep our perspective in line as we go through the world of sales.
Don’t Miss Episode 32
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