Jim Collins says that “Return on Luck” is one of the significant factors in extreme success.
It is not that successful companies or people have more luck… it is how they follow through on their lucky breaks that makes the difference.
One person might meet someone who could open a door of massive opportunity… but doubt and confusion mean that they don’t pursue the chance.
Another might meet the same person… and have the motivation, vision and competence to take the opportunity and turn it into a gold mine. Whether you are lucky or not today, you can invest in developing your clarity of vision, your competence, your network of trusted relationships – to be ready to maximise your return on luck when an opportunity comes to you.
Where Opportunities come from
“Stand in the traffic”
Prof Paris de l’Etraz, IE Business School, Madrid
Whilst luck is not controllable… there is something that I can do to increase the chances of lucky breaks occurring.
Prof Paris de l’Etraz of IE Business School in Madrid teaches a course on managing your life. One of his sessions is titled “Stand in the Traffic“. He says that it is important to place yourself physically and mentally where many opportunities are likely to flow. Your sofa at home is comfortable… but no opportunities are flowing past. If you spend your days at a business school… a lot of people, ideas and opportunities flow past.
Lucky Opportunities tend to be Stumbled Upon
The author of the Atomic Habits book, James Clear, has a wonderful weekly email newsletter. Here is a thought that he shared on opportunities…
from James Clear…
“Lucky opportunities tend to be stumbled upon, not handed out.
If you’re waiting for someone to hand deliver an excellent opportunity to you, it’s unlikely to happen. But if you are exploring and moving—if you’re in the mix and engaged—then you’ll stumble upon many opportunities.
The active mind comes across a lot. Keep tilling the soil and you will occasionally unearth something wonderful.”
What is your relationship to success and failure? I have been reflecting these recent weeks about how I respond to “failure” – when things do not turn out as I hoped or wished.
The video below shares my thinking about a better way of approaching failure in our lives.
How I let failures derail me…
I let small failures easily put me in a state of frustration and stop me making progress (and then checking social media and seeking out other simple distractions).
I take small setbacks incredibly personally.
I’ve been reflecting on why I let these small failure events have such an effect on me.
I realised that I was telling myself that all setbacks are bad.
This is not a great story to tell myself. A new story is that failures are a sign that I am working towards important goals. A lack of setbacks would be a demonstration that I am only working towards easy, unimportant goals that don’t push me to grow as a person.
Warren Buffett often says that he is less scared by the errors he has made than by the sheer enormity of all the opportunities that he never even saw as they passed him by.
Your progress in life is far less linked to whether you execute perfectly on the things you actually act on, and far more linked to whether you are able to see great opportunities as they pass you by.
In psychology we define 2 types of error:
Type 1 – poor execution and
Type 2 – never even seeing the opportunity to act
Our psychological makeup has us much more worried about the type 1 errors – because we are fully aware of them. We should be much more worried about the type 2 errors, because they are the ones that make the biggest impact on our trajectory through life.
“Every opportunity is attached to a person. Opportunities do not float like clouds in the sky. They’re attached to people. If you’re looking for an opportunity — including one that has a financial payoff — you’re really looking for a person.”
My life is an example of this quote in action. The most transformational opportunities in my life have come to me through people. I would not be teaching at IESE without Brian Leggett opening the door for me… not just to teaching, but even to the idea that I might be able to teach. I would not be involved with Vistage without Verne Harnish.
In both of these cases, I didn’t even know that the opportunity even existed. I was not looking for the opportunity. It took the vision of the other person to see a path for me that I would never have seen myself.
The power of people luck is that others can often see an opportunity that you cannot see yourself.
Return on Luck (especially People luck)
I had the privilege to meet Jim Collins a few years back in San Diego. A powerful idea that Jim has shared is “Return on Luck”. Over several years, Jim and his team investigated the hypothesis that “successful people/companies are just luckier”. They defined what it would mean for a life event to be considered “luck”:
A luck event is one that meets 3 criteria:
outside of my control
Jim and his team looked at successful and unsuccessful companies, and leaders, and identified every luck event that had occurred. They found no difference in the absolute number of luck events.
Successful People & Companies are not Luckier
There is no difference in the absolute number of luck events in the lives of successful or unsuccessful companies or leaders.
However, Jim and his team did find a difference in what happened after the luck event… Once luck happens… how do you respond?
Jim calls this “Return on luck”. Once a “luck event” has happened, there is a big difference in how successful and unsuccessful companies and leaders respond.
The luck event happens… then what? You meet the girl of your dreams and say “Nice to meet you” or you say “I want a coffee, will you join me?” You meet a key person in the company you dream of working for… what do you do with this moment?
When something lucky happens in your life, do you seize it and take action? Are consistently getting prepared for future luck events in your life?
I heard a recent Jordan Peterson video where he expounded on the concept “Choose your Hard”. This video has some of my reflections on the choice. Choosing hard today makes a difference. Not choosing hard is a choice… and it has consequences.
Take a moment to reflect on this question. I imagined myself in a room full of entrepreneurs, leaders, teachers… and wasn’t sure I could give a completely confident answer.
Now imagine that you have 20 years before you step into that room… What do you want to be able to say in 20 years that you have done the work to truly be a master, to have established a reputation for excellence, to have made a difference? Write that down.
I’ve spent the last 16 years working with CEOs and entrepreneurs to help them get clear on their purpose, get great people around them, execute their decisions and enjoy their life in the process.
The fact that you are reading this indicates that you are purposeful. The challenge for leaders is how this effectiveness leads to an enhanced quality of life.
How to be happier and more purposeful in 2020 and beyond
Author and Harvard professor David Maister says “success is enjoying your life. If you don’t enjoy what you do, the company of the people you do it with, and the impact you are making in the world… it cannot be considered success.”
A happy life is not the absence of pain. In achieving anything of significance: pain is guaranteed, but misery is optional. Anyone who has climbed Everest has been through a lot of pain. All significant achievements of meaning require the willing acceptance of the pain necessary to make the journey, to do the work, to learn the skills.
7 mindsets that connect a purposeful life to a happy life
Think about what you can achieve in 10 years, not in a week. We so underestimate what we can achieve in a decade, and we so overestimate what we can achieve in a day or a week. Shift your focus to what you can achieve over the next decade. Where can your health, your relationships, your financial wellbeing, your skill mastery be in a decade? It is far more inspiring to see a decade of achievement than a weeks worth of tasks.
Think in terms of who you will become (character), not what you will have (possessions.) I have been running leadership retreats for many years now. As we come to the end of any year, one of the questions that I ask leaders to reflect and share during the retreat is “what three words represent who you will become in 2020?” It forces thinking about how I will be, rather than what I will accomplish. My three words for 2020 are Generous, Focused and Kind. What three words would you choose?
Think in terms of process goals, not results goals. I spent over a decade leading sales organisations… and we are taught not to let sales people share results, but activity. A results goal could be to grow my business by 20%. A process goal is to make two more calls per day. A results goal is to lose 10 kilograms. A process goal is to leave two bites unfinished on every plate.
Think about changes in your environment, not your willpower. If you want to eat less chocolate, don’t have it in your home. If you want to do more exercise, put your sports gear on as soon as you wake up. If want to use Facebook less, delete the app. High performers don’t have greater willpower, they remove the distractions from their life.
Don’t negotiate with your excuses. As soon as you decide to take any action, your mind will come up with reasons why not to do it. Don’t engage in this discussion. Your excuses have access to all of your intelligence and they will win.
Fix the little things, and the big things can take care of themselves. Over the last 3 years I’ve had a habit of noting down each afternoon my “love/hate” list. I note everything that has added to my enjoyment of life on the left, and everthing (and everyone) who has detracted from my life on the right. It is often small things that detract. I have acted to remove anything that consistently appears in my “hate” list from my environment.
Think why, who, how… not what, when, how…. In every Vistage CEO decision coaching process, the first question we ask is “why is this important to you?” And we will stay with this question until we truly understand why… before we move to who can help and how to execute. Start with why. Do what is important, not what is convenient.
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