From Poker Hands to Business Plans
Monday, April 7, 2025
Lessons from the poker table: how to apply strategic thinking and risk management to drive innovation success.
In my family, I am infamous for always having a deck of cards tucked in my purse on vacations.
- On the beach? Let’s play bluff!
- Flight delayed? How about a round of go fish!
- Keeping the kids awake until midnight on New Year’s Eve? Time for slapjack!
As the kids have grown older, we have decided it’s time to add a new "life skill" to their repertoire: poker! Armed with a brand-new poker set and a trusty cheat sheet, we dove into the world of poker on a recent family vacation.
As a competitive mom who doesn’t let her kids win, I couldn’t resist doing a bit of research to understand what it takes to master poker. As I read, I had an unexpected realization: The skills that matter most in poker aren’t all that different from the ones needed to lead innovation.
Stick with me here. I’ll admit up front that I’m no poker pro, so bear with me if my references aren’t perfect. But I promise, the parallels are worth exploring!
Poker Tip #1: Know the Players
Leading Innovation Tip #1: Be Consumer Obsessed
In poker, players are taught to get to know everyone at the table and adjust their strategy accordingly. A well-known poker adage reminds us “You don’t play the cards in front of you, you play the [person] across from you.” Often, understanding your opponent’s playing style is more critical than the hand you’re dealt.
In the world of innovation, this principle translates to understanding your consumer. As a marketer, I was trained to be “consumer obsessed.” Consumers cannot be an afterthought — innovation must begin and end with them.
To create meaningful and sustainable innovation, we need to a deep understanding of consumers’ needs, wants, behaviors and motivations. By identifying unmet needs, we can develop solutions that deliver real value. This focus is crucial, especially considering that, according to Nielsen, only 15% of new consumer packaged goods (CPG) in the U.S. remain in the market after two years.
Spending time with your consumers is essential. As leaders in the consumer industry, we must prioritize store visits and even home visits to observe how consumers shop and use our products. The insights gained from these experiences can be transformative.
During my time in the confectionery industry, I visited consumers’ homes to discuss our brands. I discovered that many loved our packaging so much that they kept the empty boxes for years, repurposing them to store personal belongings. This insight inspired us to think differently about innovation. By combining this finding with the growing trend of personalization, we developed custom, personalized gift boxes for the holiday season — a hit with our consumers. Mine still sits on my shelf!
Poker Tip #2: Understand the Game
Leading Innovation Tip #2: Define Your Objectives
As a new poker player, my first step has been to learn the poker hand rankings. Understanding these rankings allows me to make informed decisions, develop strategies and increase my chances of winning.
Similarly, when leading innovation, the first step is to define your goal. While creating value may be the overarching objective, it is essential to clarify what type of innovation you’re pursuing.
Are you focusing on incremental innovation — making small improvements or changes to products to maintain consumer interest and keep your business competitive?
Or are you aiming for breakthrough innovation — developing entirely new markets or disrupting existing ones to drive change, enter untapped white spaces or address unmet consumer needs? According to Forbes, less than 10% of CPG innovation is truly breakthrough.
Once your focus is clear, establish specific, measurable, achievable, relevant and time-bound (SMART) goals to guide your efforts. These goals ensure alignment and provide a framework for tracking progress. Create a regular cadence for reviewing and refining these goals to stay on course and adapt to evolving market conditions.
Poker Tip #3: Understand When to Play and When to Fold
Leading Innovation Tip #3: Know When to Walk Away and When to Double Down
There’s a popular poker quote: “The only thing you really need to know about poker is to know when to hold ’em and when to fold ’em.” It underscores the importance of knowing when to play a hand and when to fold, based on your cards and opponent’s behavior.
Innovation follows a similar principle. Not every launch will be a success, and the real skill lies in knowing when to stick with an idea and when to walk away. While there’s no universal formula for deciding when to pivot or abandon a project, the key is finding the balance between patience and vulnerability.
Sometimes we become so attached to our ideas — or so invested in the time and resources spent — that walking away feels too emotional. On the other hand, organizations can sometimes lack patience, discarding a product prematurely when it doesn’t deliver immediate results. Instead of giving up, we should embrace agility, learn from setbacks and refine the idea.
While working in Africa in the gum business, we launched an innovation for our No. 1 brand: We changed the color of our historically white pellets to yellow. As marketers, we believed the yellow color better represented the fun, playful nature of the brand. However, within days, consumer feedback was overwhelmingly negative. Our loyal customers felt we had altered a beloved brand, and they were not happy about it.
Faced with this backlash, we reversed 18 months of work to go back to the original white pellets. We had misjudged consumer attachment to the brand. However, our swift decision-making process allowed us to course-correct without causing permanent damage to the brand’s reputation. This experience reinforced the importance of staying closely connected to consumer sentiment and being willing to adapt quickly when necessary. Had we been reluctant to admit defeat, the brand could have been irrevocably hurt.
Poker Tip #4: Manage Your Bankroll
Leading Innovation Tip #4: Support Your Innovation
I was surprised to discover that one of the most common tips for poker success is managing your money — or your “bankroll.” Playing above your means or taking excessive risks can quickly lead to losing everything. Good money management is essential for successful poker — and the same holds true for successful innovation.
In innovation, resources matter. For an initiative to succeed, an organization must be willing to back it with financial, human and technological support. There are countless examples of failed innovation stemming from insufficient resource allocation. If an organization is not willing to put some skin in the game, why would a consumer? After all, if a consumer can’t find your product or isn’t aware of its value, how can they buy it?
While innovation with limited support can sometimes succeed, thanks to a strong brand reputation, a niche market or the benefit of viral marketing, most innovation efforts require robust backing. Resources fuel awareness, accessibility and ability to scale.
As poker writer Terrence “V.P. Pappy” Murphy wisely said, “Gambling is not about how well you play the games, it’s really about how well you handle your money.” The same principle applies to innovation: Managing resources effectively can be the difference between success and failure.
Poker Tip #5: Don’t Take Losses Personally
Leading Innovation Tip #5: Fail Fast and Fail Forward
Failure is inevitable.
In poker, sources suggest that only 0-15% of players consistently win, with the majority of them losing money. Among those who do win, only a small percentage achieve a significant success rate. The odds of long-term success in poker are stacked against most players.
Innovation faces similarly daunting odds. According to Neilsen, up to 85% of CPG innovation fail. The reasons are many: prioritizing short-term goals over long-term strategies, rushed product launches, poor understanding of the consumer or competitive landscape, lack of agility or insufficient support. Innovation is undeniably hard. As consumers, we often see large companies “playing it safe” with incremental innovation — new flavors or minor tweaks to existing products. Meanwhile, smaller, nimbler and less risk-averse players often sneak in with truly groundbreaking innovation. This is because there is a lot at stake.
With the odds against us, how can leaders drive successful, sustainable innovation?
We must be prepared to fail — but fail fast and fail forward. As in poker, we can’t take our losses personally. Instead, we need to accept failure as a learning opportunity and use it as a road map for future success. Shifting your mindset to see setbacks as steppingstones to greater achievements requires resilience, agility and perspective. A mindset of continuous improvement is essential for navigating the challenges of innovation.
So, is launching innovation just gambling?
Innovation, much like poker, is a game of strategy, adaptability and resilience. It starts with understanding the “players at your table” — your consumers — so you can meet their needs and create meaningful value. It requires setting clear goals, whether pursuing incremental improvements or aiming for disruptive breakthroughs. Agility and vulnerability allow us to understand “when to hold ’em and when to fold ’em.” Just as poker demands careful bankroll management, successful innovation depends on allocating the right resources to bring ideas to life. And finally, it demands a mindset that embraces failure — not as the end, bust as a steppingstone to future success.
By combining consumer obsession, strategic focus, resource management and a willingness to learn from setbacks, leaders can stack the odds in their favor. Innovation may not always guarantee a win, but the right approach can create a lasting impact — one that keeps you in the game and ahead of the competition.
In the Lead magazine is a collaboration between the Buccino Leadership Institute and the Stillman School of Business’s Department of Management. This edition reaffirms Seton Hall’s commitment to fostering innovative, ethical and impactful leadership. Stay ahead of the curve — explore the Spring 2025 issue of In the Lead.
Categories: Business