As I sat down quietly to listen to a radio conversation about the current Finance Minister’s position over his decision to initially reject the IMF programme but subsequently accept it brought to mind how the game called poker is played.
Pot committed is a term used in playing the poker game. It is a concept in which you invest heavily – almost all your holdings into your current pot, and even if your hand is a bad hand, you keep on playing it with the hope that one of your competitors will pull out at some point.
Generally speaking, being pot committed means being at a point where one believes that at this juncture there is nothing I can do, considering other alternatives at my disposal because of the earlier declared commitment.
This is the very reason why large organisation are not good at disrupting themselves.
And it is because they are so committed to a single line of thought or strategy, and even though they realise that they have to do something by changing – selling, merging and so on.
For example, in the fashion industry, one of the largest and most iconic brands, Versace, was acquired by another brand called Michael Kors for US$2.2billion.
Michael Kors will now change its name into Capri Holdings while still maintaining and growing the Versace brand worldwide.
Michael Kors has been able to do this because they decided to let go of their pot committed attitude.
Michael Kors is a handbag maker yet they dropped that single line of strategy to acquire the Versace fashion house.
This move has enabled Michael Kors to launch into the exclusive European luxury market.
By courtesy of this move, Michael Kors has insulated itself from future recessions because the clientele of Versace still do their purchases in such periods.
Michael Kors made his first foray into European fashion last year by buying the shoe brand Jimmy Choo.
Now there are a lot of pot committed attitudes being exhibited by various institutions.
They are so much inclined to single-theme of strategies, which are very difficult to drop even though they know they have to change some of their strategies to embrace new dynamic ones. But due to their confirmed biases, they will not temper with their status quo.
Again, most of us are pot committed to certain projects. It doesn’t matter how much you have heavily invested into that project, there are still other alternatives or options available.
For instance, you cannot go on for almost four years writing letters of employment to institutions to hire you, do not say I have invested a lot into acquiring degrees; hence, I cannot do anything else except being employed by an institution.
How to deal with pot commitment
- No matter how formidable an organisation is, don’t hope that it will get better or improve without deliberate steps to disrupt it.
- Drop the biases of junior verses senior status quo mentality.
It is said that the only constant in life is change and nothing else, so change constantly!