NMP Live Meets former poker professional, and risk expert, Caspar Berry.
A keynote and motivational speaker, Caspar uses the metaphor of poker to inspire audiences to make better decisions in all areas of their lives. In our exclusive interview, Caspar discusses how poker relates to business and the importance of taking risks.
Watch the full interview or read the transcript below.
In conversation with Caspar Berry
What is your professional background?
I started my professional life actually as an actor, in the first few series of Byker Grove, with Ant and Dec. The legacy of that was that I realised that I wanted to be a director – or a writer and director – so I actually went to Cambridge, ostensibly to study economics, but really to do all that with ‘The Footlights’, and that kind of thing. Up until the age of twenty-five that was my sole career goal. And at twenty-five, I found myself in Los Angeles and doing a lot of work over there; but at that point I sort of became disillusioned, and thought I want to do something different with my life.
Obviously, being in America I’d been through to Las Vegas and was aware of this thing called poker, and thought I would give it a go. Actually, I thought I’d spend about six months there, something a bit crazy to do, and I ended up doing it for three years. It was doing that that taught me what I now talk about and think about, which is how and why and when we take risk. It was that that made me want to set up my own company – a media production company – which I eventually sold to Bob Geldof. So it was the juxtaposition of those two experiences; the poker and the business, that made me realise that they had much more in common than people thought.
I think now, it’s not necessarily passé, but it’s quite a common perception, and people understand that poker players are quite strategic investors – or at least they’re not gamblers in the traditional sense. But at that time it was quite a different way of thinking. Initially, I used to talk about the relationship between poker and business, and I think that gradually over the ten years I have done this, I have moved away from that, to take some things from poker and really focus them on business and what we can learn about that.
When did you realise you could make a living playing poker?
I realised you could make a living playing poker the first day I ever saw it, encountered it, and played it. During my sessions I talk about something called the butterfly effect – the fact that tiny things can have a huge impact on your life. A lot of people have this experience – someone they have never met before, they’ve never met since, who said something, which changed the course of the rest of their life.
I had this person – I don’t know his name – who explained poker to me in terms that made sense to an economist; about how every table is a little crucible and market, within which we are all trying to get the edge and maximize our returns on investments. I just got this, so I immediately understood and realised that you could make a living and a profit – although doing it is much more difficult than understanding the theory! But I resolved on that day to go and do this thing; again, I thought initially for a little while, but it was such good fun at first that I ended up doing it for three years.
How does poker relate to business?
The relevance between poker and business? For me, the two are so similar, they just happen to take place in slightly different places. It all comes down to one or two fundamental concepts. Business and poker are just a series of decisions – investment decisions; resource allocation decisions; in a world of uncertainty. That’s what we do.
When you talk about business, you can talk about how to motivate, how to build a team, how to sell; but all of those, everything, will come down to the decisions that you make. That’s ultimately what will decide your success or failure. And poker, essentially, is just a series of resource allocation decisions, where the deck of cards represents the uncertainty; the terrain of the world; and other people’s feelings and opinions, and actions; and what we are trying to do is navigate that uncertainty and get the edge over our competition. Because each poker table is like a little market, in which we’re looking for the inefficiencies of that market, in poker, it’s actually other people’s bad play and when we see it we must exploit it by taking action and having the courage to do so.
As a former economist from Cambridge, poker sort of revealed itself as that to me immediately. I just saw that you could make a profit and a living by applying actually generic classical and behavioural-economics principles. Poker, in many ways, is the terrain of business without the office, without the phone, without paying the bills, without the clients – just laid bare. It’s what we’re doing at a fundamental level and so it is just like the perfect metaphor and crucible within which to explore who we are as people and why we do what we do.
Are certain people more wired to take risks?
There is sometimes a question about whether entrepreneurs, for example, are made or born. I am of the feeling that the evidence points to the fact that our brains are not blank slates.
There are differences in us, even at the point of birth, genetically. In fact, there is strong evidence, for example, that Americans are generically genetically different from the European populations that spawned them; because they’re descended from the people who got on the boats – who went in search of new adventure. So, what is sometimes a cliché, that Americans tend to be more risk-tolerant, is based on quite accessible science; they are genetically predisposed, and therefore culturally more disposed to trying new and different things, some of which will fail. So, I think that’s definitely true.
However, it is also the case that entrepreneurs live and work in different environments to people in corporate life. If you are an entrepreneur, how much of the upside do you get if you take a risk and it works? All of it. But if you’re working in a huge department you might get a small bonus, you might not even get that. Actually, incentivisation is critical to the decisions that people make when it comes to risk. If you’re an entrepreneur, or a poker player, and you try something and it all goes completely wrong and you’re broke, what happens?... Well, sometimes the community will lend you money to get back in to the game, but you know, that’s not going to happen if you’re working in a department or if the company goes under. So, I think, like all things, our ability to take risk, and our propensity and our willingness to do so, is a function of both our nature and that nurture; and that debate will rage on. But let’s try to think about both if we want to motivate ourselves and others to change.
How important is taking risk in business?
I think that risk is fundamental to the results that we achieve and enjoy in our lives, or rather our ability and propensity to take risk, because again, a business is just a machine for taking risk.
You might say an individual person is just a machine for taking risk. I just can’t think of anyone who is successful, who has achieved extraordinary things in life, who hasn’t at some point along that journey taken risks. This is a really important point – that doesn’t mean that they’ve endangered life or limb; it doesn’t mean that they were reckless, or dangerous, or stupid. So many of my audiences within the first three minutes – and so I tackle it at that point – think that risk-taking involves doing things that are merely unacceptable; and in fact, it precisely doesn’t! Risk management means defining what is unacceptable, at the very first stage, and asking therefore what kind of latitude do we have before we get to that point. The interesting thing is that the answer is that there is usually quite a lot.
There’s an enormous amount of things between our comfort zone, where we spend most of our time, and the line of unacceptability; which we should believe is sacrosanct. It all comes down to return on investment – you will get greater returns on investment the more risk you are prepared to take. You will also endure more volatility, more confusion, more discombobulation. But think about the great success stories that we tell – anyone from Olympic gold medal winners to entrepreneurs; it is their ability to deal with that confusion, and that volatility, and that slightly different standard and style of life, that will ultimately determine their long-term success.
What can businesses do to encourage risk taking?
The question is: how can we get people in our organisations and teams to be prepared to take more risk? And ultimately, the answer has to come back to, if not the leadership of those teams, then at least an interaction between the two. This has to be a joint effort. You can’t just say to people, “change what you are doing”, without changing the circumstances, the situations, the rewards etc.
I think there is a three-stage process, or three key things. The first of which is alignment, ‘A’, for alignment. That is, people understanding what it is they want to achieve. And here is the key: what price they are prepared to pay in order to achieve it? There has to be a downside, there has to be a cost. If any change is going to be enacted, there is going to be a process of confusion along the way; so accepting that price, and that cost, is a really important thing for that team to do together.
The next thing is, ‘I’, for incentives. You have to change the incentives if you want people to step outside their comfort zone and do more different things. You have to take away some of the fear of the downside, and you have to increase the rewards and the upside for doing so. Otherwise, why would people do it? They are just going to stay doing what they have always done, because, as we know, they will get what they have always got, and if that’s not so bad, then who cares?
And then the third stage, I think, is ‘D’ (AID) – you can see where I am going with this – ‘D’ is for delineate, demarcate. If you think about areas in our world where people take risk – let’s think of an idea generation session, or let’s think of Google’s ‘twenty-percent time’ – what do those things have in common? Well, they’re delineated – it’s a day a week in Google’s case, it’s the next two hours when we’re generating ideas. It’s not forever, and it’s not everyone. It’s not let’s go mad and crazy. It’s within this period of time, or within these four walls, or in saying, ‘this team have a license to fail… they have a license to take more risk’, and we understand that in the process of doing that, they will fail more often. It’s not great, we don’t love that, but we accept that that’s going to happen if we want them to engage in that process, to get to where we want to get to.
So, ‘A’ for alignment, ‘I’ incentives, ‘D’ for demarcate – First AID.
How much is our decision making governed by the subconscious?
One of the aspects of decision making that I love is the extent to which we’re in control of it, or not. A lot of speakers are trying to ultimately answer the question of why we do what we do; because if we can do that in a corporate context, then we can get people to change. And I think the fascinating thing about decision making is that, as human beings, we love to think we are rational. And certainly in organisations, in companies, we love to think we are rational – we have got our spreadsheets, we’ve got the numbers, we can prove a case for it.
One of my favourite clients I ever worked with was a member of big acquisitions team, and he said, ”yes, Caspar, but we make billion-dollar acquisitions, we’ll sit there for days talking about it, and quite soon on the first day someone will take the report, toss it aside and go, ‘how do we feel about them?’” Do you know what I mean?... Ultimately, all of our decisions go through a filter of emotions. I mean it doesn’t matter that this number on the page is four thousand, or four million, or four billion; it’s how people feel about that that matters. You know, Richard Branson is going to make a different decision, with respect to an upside, when compared with someone who is in forty-grand worth of debt. They’re going to make different decisions, because their life situations are different. That doesn’t mean to say that either of them are right or wrong; they’re making decisions that are appropriate to their context. In other words, we are ultimately emotional beings, and what the behavioural economists did, about thirty years ago now, which has eventually seeped in to our greater consciousness, is to show that we’re not rational, in the classical sense.
We are emotional, but there is power in that; there is power in our instincts and our intuitions, and that’s good. So, my key message, ultimately, is to embrace that; embrace our intuitions; embrace gut-level decision-making; embrace system-one thinking – the old limbic brain – because it’s extraordinarily powerful. But use what is unique about our human psyche; use our neocortex; use our conscious mind; use boardroom decision making to probe it, to challenge it; to ask if it’s really the right thing to do. Use the two together, constantly, and that’s how you make great decisions, that’s how a poker player makes great decisions. Listen to the little voice, ask if the bias is too far one way or the other, and then execute.
How do you like your audience to feel after one of your speeches?
I think at the end of any presentation an audience should feel invigorated and motivated: there should be a desire to embrace some of those ideas. But honestly, what I try and do is to stimulate them intellectually as well.
Alfred Hitchcock used to talk about the thing that will get them talking on the way to the car park; there should be something about the story that was still a bit of a mystery – I call it a ‘wrinkle’. At the end of the day, we have to accept that nine times out of ten, people are going to listen to it, hopefully they enjoyed it, hopefully they were stimulated, but a lot of people are going to forget about it – unless you have really changed a part of the culture of that organisation, such that they want to bring you in again, you know when they really want to make fundamental changes – you have only got forty-five minutes. But the wrinkle is crucial, because the wrinkle is four days later, someone turning to someone at the water cooler and going, “we should talk about that, we should talk about what he said, because it’s stayed with me, there is something about it where life hasn’t returned to normal”. So, I think, even more important than as they filter out to coffee, that wrinkle is what will affect long lasting change.
If you're interested in booking Caspar Berry, you can enquire online, email us or pick up the phone and speak to one of our booking agents. For further information about Caspar, speech topics, client testimonials and video clips of recent talks view his profile.
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