Imagine that you’re playing Blackjack at a swanky casino in Monte Carlo, Macau, or maybe Las Vegas.
The cards are dealt out. Your hand adds up to 16, while the dealer is showing a ten. What do you do?
Statistically, the chances that taking another card doesn’t push you over 21 is less than 40% (depending on how many decks of cards are in play). The odds that your card gives you a total of 18 or greater is around 25%. Not great odds, I think you’ll agree.
Based upon the chances of busting, maybe you decide to stick with what you’ve got. However, if you describe the above situation to any experienced Blackjack player, they would all advise you to take another card.
Because they will remind you that the aim of playing Blackjack is not to avoid going over 21. The aim of Blackjack is to win – and the chances that you’re going to win with a hand of 16 is slim at best.
The aim of Blackjack – and Business – is to winIt’s the same in business. When we’re presented with a business opportunity, we make an assessment as to the likely probability that the decision that we make will yield a favorable result. If we deduce that the chances of us “winning” are less than, maybe, 50% (or whatever number that gets our attention), then we choose to stay with what we’ve been dealt.
But, just as in Blackjack, the aim of business is not to avoid losing: It’s to win – to succeed.
There are numerous examples of companies who “took another card” at 16. Gillette decide to see their safety razors at a very low price, gambling that customers would keep buying the disposable razor blades. While at Pepsi, John Sculley demonstrated that Coca-Cola drinkers were loyal to the brand – rather than the taste – through the hugely-successful “Pepsi Challenge Taste Test” campaign. Apple chose to invest in bricks-and-mortar retail stores just when everyone else thought that the future was online-only.
It’s about playing to win, rather than to “not lose”.