It’s human nature to want to attribute success, in business or any other endeavour, to our actions, not to good luck, but often luck is a perfectly adequate explanation.
We live in a deterministic world, a world of cause and effect. Actions have consequences. And while that may be true it is not that simple. The networks of causes and effects are so vastly, mind-blowingly complex that our ability to predict outcomes is severely limited. Which is where the concept of luck comes in. But how do you incorporate luck into you marketing plans?
Humans have a deep-rooted need for a sense of control and comprehension. In many ways this is a good thing. It drives us to understand the world we live in and to find explanations for how everything works, but the need for control is a double-edged sword.
When we fail to accurately predict an outcome, or are surprised by an event, we don’t often attribute it to our lack of predictive ability, we attribute it, instead, to luck. Luck is really shorthand for “Don’t ask me”.
Luck usually comes in one of two flavours; good luck, which is how we describe the success of others, and bad luck, which is how we explain our own failures. You can see how to appropriate luck in the following handy guide.
Ok that’s not universally true but it’s often the case. If you read an annual report for a company that has had a great year you will see comments along the lines of “…thanks to the continued focus on cost controls and significant investment in product development we maintained margins at 12% while growing revenue by 18%”. Contrast that with a company coming off a bad year “…due to the global economic conditions and adverse exchange rate environment, and other factors outside of our control, we have seen a reduction in margins of 2% and a fall in revenue of 3%”. Luck it seems is quite subjective.
In business we really can’t seem to accept luck as anything other than a way to explain things we couldn’t have been expected to predict. Motivational posters adorn office walls, featuring a famous golfer along with the quote “The more I practice the luckier I get”. Directly, if quite passively, denouncing the very idea that luck even exists. Luck, in the opinion of many, is simply the manifestation of hard work.
This sentiment is not new, a 16th century proverb stated “diligence is the mother of good luck” and several variations on this theme have been used since. Thomas Jefferson is often credited with the phrase “I am great believer in luck, and I find the harder I work the more of it I have”. Unsurprisingly he never said any such thing but the sentiment still resonates with people who like to take their advice from famous dead people. That’s not to say that diligence, preparedness and hard work are not important factors in success, they are vital. But denying luck a seat at the table is a mistake.
Take Richard Branson’s breakthrough in the USA as a case in point. His Virgin record label had a massive UK hit with its first album, Tubular Bells by Mike Oldfield. Despite the albums initial success he was having trouble getting a US distributor. He tried to convince the legendary head of Atlantic Records, Ahmet Ertegun, that an instrumental record would sell in North America but to no avail.
Ahmet liked the album personally but didn’t see any commercial potential. He played it for his friend, the movie director William Friedkin who coincidently was looking for music for a film he was working on, which just happened to be The Exorcist. The rest, as they say, is history. Friedkin got his soundtrack and Branson got his record deal. None of this was in the marketing plan.
If you draw a Venn diagram made up of three overlapping circles representing luck, strategy and skill you can visualize the idea and identify examples of the sorts of activities that exist in each intersection.
In the part of the luck circle that doesn’t intersect with any other circle you could place a casino game such as roulette, where that ball ends up is purely a matter of chance, no skill or strategy, just the random spin of a wheel.
In the skill only area you could place an individual sport such as the 100m, no team interaction, no contact, just the fastest person to run 100m wins, pure skill and ability.
The strategy only circle represents a small problem as no regular human activity meets the criteria of pure strategy, but fear not, researchers have invented a game of pure strategy called, not very imaginatively, GOPS which uses a regular deck of playing cards that I occasionally use in workshops, so that will be our placeholder here.
What about the areas where two circles intersect? In the skill/luck overlap you could place motor racing, you obviously need to be a skilled driver but mechanical failure, sudden change in weather, another driver running you off the road etc. means luck plays a significant role.
The Luck/strategy intersection could contain blackjack; luck determines which cards you are dealt but there exists a perfect strategic game based on the cards you have been dealt and the dealers ‘up’ card that give you the best odds of success.
Skill/strategy could be chess, a game, when played at the highest level, has no place for luck.
In the middle of the chart, where skill, strategy and luck all play their part, you could place your business.
In business you clearly need to have the requisite skills to compete in your chosen market. You need to be good at something, you need to develop and maintain critical capabilities that allow you to deliver value to your customers. These skills could be in manufacturing, distribution, brand building and product quality, selling or any number of other traditional business disciplines. But while skills are necessary they are not sufficient.
You also need a strategy. Where you will focus, how you deploy your resources, who are you competing against and how, what position are you aiming for in the market? What alliances and partnerships will you build and so on. But even with a robust strategy supported by strong skills you need one other element to succeed.
Which brings us back to luck; the events that you can’t control that may have a huge impact on your future success. And remember we are not just talking about good luck but the other side of the probability coin, bad luck. Sometimes events will help you other times they will hurt you.
Maybe you are ready to accept that luck plays a part in business success, maybe a bigger part than you are comfortable in admitting. But so what? Admitting its significance is one thing but how are you supposed to incorporate it into your planning? Put a lucky horseshoe on your desk? Acquire a black cat? Probably not.
You can’t make your own luck, despite what the pithy aphorisms say. If luck was totally in your control, well, it wouldn’t be luck would it. But you can anticipate it, prepare for it and in some cases affect the probability of it happening.
Incorporating luck is not about fortune telling it is simply considering what could happen and being prepared to act quickly if it does happen. To do this, list all the things that you can’t control but may effect your business and assess the probability that they will happen and the impact they would have if they do happen. Don’t hold back, try to think of any remotely plausible event that could impact your business. This is harder than you might think so stick at it. You then plot these on a chart with probability of occurrence on one axis and potential impact on the other.
Prioritise those that have the highest impact and highest probability first, and where possible, take whatever steps will likely increase the chance they might come to pass (or not in the case of bad luck!). In workshops I call this process “exposing yourself to the possibility of success”.
If you can’t exert influence at least put in place the discipline to monitor and create an early warning system and be prepared to act rapidly as events unfold.
Luck is the third element of a business plan and it is a real and impactful as your skills and strategy. Once you have embraced that idea make sure it is part of your planning process.
Obviously you can only have one plan but make sure it is not rigid and inflexible. It is a starting point and nothing more. Life doesn’t run along straight paths and your actual journey will be shaped by unexpected events. Consider what could happen, spend time thinking of different scenarios, prepare your response and be ready to move quickly.
You can’t predict the future but you can reduce your vulnerability to being surprised by it and, just occasionally, you might be able to stack the odds in your favour.
Good luck!