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Good fortune is derided and underrated., but make a few tweaks, and you may find yourself the beneficiary of its oft-outsized blessings.

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THE NOBEL-PRIZE-WINNING behavioral economist Daniel Kahneman summed up this secret to professional success in what he has called his favorite formula:

Success = talent + luck

Great success = a little more talent + a lot of luck

The work of Kahneman backs up much other research that concludes that we humans drastically undervalue the influence of luck in many situations and overvalue it in others.

It has to do with something psychologists refer to as the “locus of control,” or how much you think you control the events happening around you. Most people have an internal locus when it comes to good things — they take credit for their success — but an external locus when things go wrong.

After all, it’s not hard to recall the countless times when you put in the effort to succeed: slogging through 14-hour days during the holiday season, preparing reams of documents for loan interviews, the drama of managing an unruly staff. By contrast, it’s genuinely difficult to perceive the ways you may have been fortunate: to open or expand a business at a time of historically low interest rates, to benefit from a global shift towards customization, to ride the back of 12 years of unbroken economic growth.

Here’s How to Make Your Own Luck in Business

There are reasons most business owners and managers don’t want to talk about the role of luck in their success. It’s not just that it takes some of the shine off their accomplishments, but also because in the purest sense, luck is random and thus boring. If it’s out of your control, why bother?

To be sure, there is a certain type of luck — dumb luck, winning-the-lottery luck — that is not worth giving much thought to. But the other kinds — the fortunes and misfortunes you prepare for, the luck that can be tapped through an understanding of probability or that comes from hard work — that can give your business a huge boost.

Indeed, Nassim Nicholas Taleb argued in his best-selling book, The Black Swan, that luck is the key force at the heart of our economic system, as the biggest rewards tend to come from the deepest unpredictability. The reason free markets work, he asserts, is because they allow people to be lucky thanks to aggressive trial and error, not by giving rewards or “incentives” for skill. When it comes to business, luck is almost like an evolutionary power rewarding random adaptiveness.

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It is this disconnect between skill and luck that is sometimes the hardest to understand. Counterintuitively, the more competitive and skilled the players in a marketplace or other segment in life, the more luck you need.

Billy Beane, the central character in Michael Lewis’ book Moneyball, about the improbable winning run of the Oakland A’s in the early 2000s, makes this surprising point as his undervalued team is about to embark on its first playoff run: His statistical analysis doesn’t work in the playoffs — their success will now come down to luck, he says. When the two best teams in the division or country face off, the difference in skill is often marginal. Luck matters more than ever.

Here’s How to Make Your Own Luck in Business

It’s this that partly explains why so few teams repeat as champs, why last year’s top fund managers underperform in the following year and why businesses rise and fall. Consider the 50 companies featured in three of the most popular business bestsellers of the past 40 years: In Search Of Excellence, Good To Great and the unfortunately named Built To Last. Of the 50, 16 failed within five years after the books in which they were featured were published, and 23 became mediocre as they underperformed the S&P 500 Index. It wasn’t because their managers or workers stopped trying or innovating. It was because things even out. Statisticians call it regression to mean. Normal people might just say their luck ran out.

That said, there is still much in life you do control, and luck, while it can’t be tamed, can be influenced.

Lucky people are skilled at creating, noticing, and acting upon chance opportunities. They do this by building and maintaining a strong network, adopting a chilled attitude to the vicissitudes of life, and being open to new experiences.

In the following pages, we provide some ideas on how to improve your odds in the face of such uncertainty. Good luck!

Keep an Open Mind
… and Relax a Little

Part of the challenge is that good-luck events often reveal themselves in ambiguous, trivial ways, which can make them hard to detect. As the saying goes, “Actual great opportunities do not have, ‘Great Opportunities’ in the subject line.” As a result, luck tends to favor the curious. “This is one of the most counterintuitive ideas,” says Richard Wiseman, a psychology professor at the University of Hertfordshire in the UK and author of THE LUCK FACTOR. “We are traditionally taught to be really focused, to be really driven, to try really hard at tasks. But in the real world, you’ve got opportunities all around you. And if you’re driven in one direction, you’re not going to spot the others. Unlucky people go to parties intent on finding their perfect partner and so miss opportunities to make good friends. They look through newspapers determined to find certain type of job advertisements and as a result miss other types of jobs. Lucky people are more relaxed and open, and therefore see what is there rather than just what they are looking for.”

Here’s How to Make Your Own Luck in Business

Hit the Books

Entrepreneurially lucky people who regularly question the norm and who seek both continuous improvements in their business and in themselves end up being luckier because they want to learn, says Anthony Tjan, author of HEART, SMARTS, GUTS, AND LUCK. “They read new things, try new experiences and are open-minded to a variety of relationships because they are curious. All of these things increase the probability for circumstantial luck … You will simply see more — and therefore increase your chances of finding luck — if you adopt the mindset that ‘there is always more to see and more to learn.’”

Don’t Be Too
Quick to Judge

To be lucky, you want to change your relationship with ideas, says Stanford engineering school professor Tina Seelig. “Most people look at new ideas that come their way and they judge them, ‘That’s a great idea’ or ‘That’s a terrible idea’. But it’s actually much more nuanced. Ideas are neither good nor bad. And in fact, the seeds of terrible ideas are often something truly remarkable,” she says in her widely viewed TED talk on luck. “You look around at the companies, the ventures that are really innovative, the ones that we now take for granted that have changed our life, well, you know what? They all started out as crazy ideas, ideas that when pitched to other people, most people said, ‘That’s crazy, it will never work.’”

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Squeeze Those Lemons

According to Wiseman, lucky people are certain that the future will be bright. Over time, that expectation becomes a self-fulfilling prophecy because it helps them persist in the face of failure and positively shapes their interactions with other people. When things go awry, they “turn bad luck into good” by seeing how they can squeeze some benefit from the misfortune. Asked how they’d react to being shot in the arm, according to Wiseman, they typically reply, “Well, I’d be relieved I wasn’t shot in the head. Maybe I can sell my story to the media.” Psychologists refer to this ability to imagine what might have happened, rather than what actually did happen, as “counter-factual.” In doing this, such people feel better about themselves and their lives. This, in turn, helps keep their expectations about the future high, and increases the likelihood of them continuing to live a “lucky life.”

View Life as a Flow
of Luck Events

“It helps to view life as a river in which lucky events — good and bad — will flow your way. It’s neither good nor bad. It just is,” writes Morten T. Hansen, co-author of GREAT BY CHOICE in a blog on the Harvard Business Review website. “When you start having this ‘luck flow’ mindset, you can start managing those events to your advantage.” This view recalls the Stoic approach to life that has been popularized in recent years: It’s not the events that happen in life, it’s our reaction to them that matters.

Here’s How to Make Your Own Luck in Business

Keep a Luck Diary
… or Spreadsheet

To build these positive skills, Wiseman recommends keeping a “luck diary”: At the end of each day, spend a couple of moments writing down the lucky things that happened. “After doing that for a month, it’s difficult not to be thinking about the good things that are happening.” If you want to take it to the next level, do something professional poker players do: Create a spreadsheet. Each time something happens, jot it down in a “Situation Trigger” column. In the next column, write a description of your thoughts, emotional reactions, and how you subsequently behaved. Next column, give your best assessment of what was the underlying flaw, and finally, write a “logic statement” that you can use to inject some rationality the next time you’re faced with a turn in luck.

Feel Lucky
Through Subtraction

Don’t want to keep a diary? The Journal of Personality And Social Psychology suggests this exercise in simple subtraction, which is a bit like the pivotal scene in IT’S A WONDERFUL LIFE: You think about the positives in your life — your family, your business, your community, your health — and then you start thinking about all the small events that had to take place for you to get to this point. What if your father hadn’t taken that summer job and met your mother, what if your great-grandfather hadn’t opted to try his luck in America, what if penicillin hadn’t been invented … and so it goes. It deepens your appreciation for what is happening your life at this moment and allows you to count your blessings.

Think of Yourself as
the “Almost-Victor”

When bad luck strikes, Konnikova recommends thinking of yourself as an “almost-victor” who thought correctly and did everything possible in terms of the things you could control but was foiled by Fate’s cruel hand. “You will have other opportunities, and if you keep thinking correctly, eventually it will even out. These are the seeds of resilience, of being able to overcome the bad beats that you can’t avoid and mentally position yourself to be prepared for the next time,” she writes in the BIG BLUFF. “People share things with you: if you’ve lost your job, your social network thinks of you when new jobs come up; if you’re recently divorced or separated or bereaved, and someone single who may be a good match pops up, you’re top of mind. This attitude is what I think of as a luck amplifier.”

Here’s How to Make Your Own Luck in Business

Be Prepared
to Act

One of the most often-cited quotes about luck comes from Louis Pasteur: “Chance favors the prepared mind.” The actual statement was a little different: “Where observation is concerned, chance favors ONLY the prepared mind.” It’s not enough just to spot a good-luck event; you need to be prepared to alter your plans to act on it. When faced with a luck opportunity, Morton recommends doing what a lot of the best corporate leaders do: apply the “zoom out, then zoom in” principle. When confronted with a luck event, small or large, take a moment to zoom out (“What are we really trying to accomplish here?”), then zoom in (get the details right). Similarly, prudent leaders prepare for that unexpected event that comes out of nowhere (Had you honestly heard of Wuhan before 2019?). Prepare for bad luck events by incorporating safety margins (take an earlier flight to that trade show; add two extra days to your next deadline), acquire options (line up that backup supplier), and invest in a strong network of people who will help when things go bad.

Take Risks

“You gotta be in it to win it” is a better example of great advertising than applied math, but it is accurate: Even winning the lottery — the ultimate example of dumb luck — requires you to go out and buy a ticket, or at least open your phone. Taking action releases energy, and luck typically requires a catalyst and taking at least a small risk. As the salesperson’s creed goes, every time you don’t ask, the answer is no.

Good luck also has a multiplier effect. Opportunities lead to opportunities. “Of course I was lucky,” says Seelig, “But that luck resulted from a series of small risks I took. And anyone can do this, no matter where you are in your life, no matter where you are in the world, you can do this by taking little risks that get you out of your comfort zone. You start building a sail to capture luck.”

And let’s not forget that NOT doing something is also a choice. “There’s a false sense of security in passivity. You think that you can’t get into too much trouble — but really, every passive decision leads to a slow but steady loss … Hanging back only seems like an easy solution. In truth, it can be the seed of far bigger problems,” writes Konnikova.

Here’s How to Make Your Own Luck in Business

Provoke Luck

The core strategy of anyone looking to enhance their luck is to expose yourself to as much randomness and “good uncertainty” as you can. Break your daily routines, take a different route to work, go to a party with a goal of only talking to people wearing red, attend conferences no one else in your field is attending, read books and blogs no one else is reading. “Although it may seem strange, under certain circumstances, this type of behavior will actually increase the amount of chance opportunities in people’s lives,” says Wiseman. It’s like living in an orchard, he says. Keep going back to the same trees and soon you’ll harvest no apples. “It is easy for people to exhaust the opportunities in their life. Keep on talking to the same people in the same way. Keep taking the same route to and from work. Keep going to the same places on vacation. But new or even random experiences introduce the potential for new opportunities.”

Close the Loop

Showing gratitude has a close relationship with luck, says Seelig, an understanding she has instituted into daily practice. “At the end of every single day, I look at my calendar and I review all the people I met with, and I send thank-you notes to every single person. It only takes a few minutes, but at the end of every day, I feel incredibly grateful and appreciative, and I promise you it has increased my luck. You need to understand that everyone who helps you on your journey is playing a huge role in getting you to your goals. And if you don’t show appreciation, not only are you not closing the loop, but you’re missing an opportunity. When someone does something for you, they’re taking that time that they could be spending on themselves or someone else, and you need to acknowledge what they’re doing.”

Create Your Own
Chaos Monkey

A decade ago, software engineers at Netflix created Chaos Monkey, a system that randomly disables Netflix servers. The idea was to push the company’s engineers to think more broadly and build more resilient systems. Like Lockheed Martin’s Skunk Works program that freed some designers to pursue ideas that were sometimes at odds with what the main company was working on, Chaos Monkey showed a recognition that while the conventional gradual evolutionary approach to design will eventually yield results, throwing a wrench in the works can help you find a way that leap frogs you into the future. Add some randomness to your systems to see what happens.

Here’s How to Make Your Own Luck in Business

Build a
Lucky Network

Studies show that the people who can help you the most in business often aren’t those closest to you: They are the secondary contacts, the friend of a friend, the associate of a key client, or some other person who you know only tangentially. The reason is two-fold — a secondary contact has nothing much invested in recommending you to someone else (the old saw about not letting business and friends mix) and because this person is not from your inner circle, they expose you to a wider network based on interests or connections you don’t have. Your hairdresser’s son, for example, may just be the person to build your website. Tjan says the best way to practice what he calls “serendipitous networking” is to be open and authentically interested in people. “A Lucky Network is not something that can premeditated. It is not a targeted list of must-have relationships, but rather it is a set of relationships built out of curiosity and friendship that somehow ends up encompassing people who turn out to be pivotal. In our research, 86 percent of the luck-dominant credit a key part of their success to an ‘openness to new things and people,’” he writes in an HBR blog.

Believe in Luck

Luck and hope have a complicated relationship. As a business strategy, you never want to rely on good fortune. Lady Luck is capricious at the best of times. Having said that, it’s actually good for your salespeople, especially the younger ones. to believe in luck — not dumb luck, but the kind that comes from getting out there and provoking it. “The greater a salesperson’s belief that success is a combination of luck and effort and that good luck will come along sooner or later, the greater his or her sales activities, such as making phone calls, meeting prospects, qualifying prospects, and gathering intelligence about prospects and competitors. And ultimately the higher their performance,” writes marketing professor Joel LeBon in a Harvard Business Review Online article. LeBon says the salespeople he has studied attributed 60 percent of their sales to luck. They need to believe.

Listen to Your
Lucky Hunches

Gut is another tricky one. Intuition can help, but your emotions aren’t always your friend when it comes to making decisions. Wiseman argues lucky people make effective decisions by listening to their intuition and gut feelings. They also take steps to actively boost their intuitive abilities — for example, by meditating and clearing their mind of other thoughts. “You don’t want to broadly say that whenever you get an intuitive feeling, it’s right and you should go with it. But you could be missing out on a massive font of knowledge that you’ve built up over the years. We are amazingly good at detecting patterns. That’s what our brains are set up to do,” he says.

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See the World
Probabilistically

For gamblers, life is about probability. Yes, luck may rule their world, but they thrive when they can narrow the odds. Such an approach means not expecting you’re due anything. Probability has no memory. Because a coin-toss comes up heads three times in a row has no bearing on the fourth toss. But it’s something most people struggle with. In the battle between Walmart and the plucky independent, the big box invariably wins. When people get into trouble taking life or career bets, it’s often because they didn’t understand the risks. Don’t try crossing the road blindfolded.

Be on the
Lookout for Luck

It starts with observation. “You’re not lucky because more good things are actually happening; you’re lucky because you’re alert to them when they do,” psychology writer Maria Konnikova writes in THE BIGGEST BLUFF: HOW I LEARNED TO PAY ATTENTION, MASTER MYSELF, AND WIN. “If we want to be successful, we need to train our powers of observation, to cultivate that attitude of mind of being constantly on the lookout for the unexpected and make a habit of examining every clue that chance presents.” Most people are simply not open to what’s around them — something that is becoming harder to do in our age of constant distraction and never-ending connectivity.

Here’s How to Make Your Own Luck in Business

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Learn From Luck

In nearly all luck events, there are elements you did control, ways you reacted that could have been handled differently, things you can learn to do better next time. If you keep making the same mistakes, that’s not bad luck — it’s a failure to learn. Conversely, when things are going well, it’s a good idea to test whether your success is entirely the result of wise decision-making or due in some part to good fortune. “One of the things about good luck if you’re not careful is that it can go to your head,” says Konnikova. “Because when you’re winning, it’s just too easy not to stop and analyze your process. Why bother if things are going well? When it comes to learning, Triumph is the real foe; it’s Disaster that’s your teacher. It’s Disaster that brings objectivity. It’s Disaster that’s the antidote to the greatest of delusions, overconfidence,” she writes, paraphrasing Kipling. The most dangerous situations are where people believe they have attained a certain control over luck, she says, citing studies of investors. “The more people overestimate their own skill relative to luck, the less they learned from what the environment was trying to tell them, and the worse their decisions became: The participants grew increasingly less likely to switch to winning stocks, instead doubling down on losers or gravitating entirely toward bonds.”

Focus on the Process,
Reward the Effort

To some bosses, the only thing that matters when it comes to the contributions of their workers is the outcome, not how they got there. Economists refer to it as the “tournament” approach, based on the idea that the only thing that matters for a player in, say, the U.S. Open is that he or she is holding up the trophy at the end. Degree of effort, style, boldness, initiative … none of that is of consequence. But in business, outcomes aren’t always in your control. And as such, it’s better to set targets and a system that rewards effort, innovation and prudent risk-taking. Focus more on the process and not solely on the results. To do otherwise is to create an overly conservative environment where people don’t dare make a mistake. “Consider the psychic costs of coming up short in a philosophical system that disclaims the role of luck, timing or competition, and admits no obstacles that cannot be conquered by the sheer application of will,” the educator and essayist Steve Salerno writes in his book SHAM.

Run Experiments

What the venture capitalists of Silicon Valley figured out early was the rewards of luck are huge, that money is often made from things you weren’t even looking for, and you don’t have to bet the house. Top VC firms will typically invest in 20 start-ups with the expectation only one or two will prosper. But you don’t need to have a billion dollars behind you to take such an approach — any modest and reversible experiment counts, says Tim Harford, the author of FREAKONOMICS. Writing in the FINANCIAL TIMES, he says: “An experimental thinker views the uncertainties of the world as something to be resolved through tentative trial and error.” Try something modest, he says. “Many of the decisions we make are reversible. Only our stubbornness makes them permanent.”

Chris Burslem is Group Managing Editor at SmartWork Media.

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