Luck in Business

My entire journey into the science of luck began during an entrepreneurial lecture series at Yeshiva University in 2003.  While looking around through some of my old files and documents, I found a copy of my first research paper on luck that I wrote as a final assignment for the lecture series.  Since this paper is what got me started thinking and focusing on luck, I figured that it was very appropriate to post it on Get Lucky.  I don’t think this is the final version of the paper but the information is there and will do until I find the original.  Good Luck!

 

Luck in Business

 

The Webster’s Dictionary defines “luck” as

1. The chance happening of fortunate or adverse events; fortune: They met one day out of pure luck.
2. Good fortune or prosperity; success: We wish you luck.
3. One’s personal fate or lot: It was just my luck to win a trip I couldn’t take.

It also mentions that when a person is in luck, it means that he is “enjoying success; fortunate”.  When a person is out of luck, he is “lacking good fortune.”

The most obvious questions about luck are “What is Luck? And where does it come from?”  You can also ask “Are you born with luck? Can you learn luck? Can you influence the amount of luck you have?”

If you can change your luck or do something about it, why don’t people do it?  Is it too hard? Is it some secret that no one knows except for some guy inIndiawho meditates all day and speaks three words each year?

The truth is that people do seek out luck and search for their best luck.  Some people do this by constantly playing the lottery, thinking that they will eventually get lucky.  Some people use good luck charms such as horse shoes, lucky pennies and four leaf clovers.  There is even a special good luck formula for business of putting equal parts of random objects into a draw string bag, consecrating it and keeping it in your pocket.  Some people hope and pray each day to get lucky or to change their luck.

Many of the speakers, who spoke in the Doris & Dr. Ira Kukin Entrepreneurial Lecture Series, spoke about luck.  They mentioned that sometimes you need luck or to be lucky.  None of them mentioned that all you need is luck though.  They just mentioned it as a side point that luck needs to be there.

Now we are back to the original question; “what is luck?”

An outsider looking at a group of business people can decide for himself who is lucky and who is not.  He can come to a decision about how some people are millionaires and other people doing the exact same job are struggling to make ends meet.  Luck would very often come to mind but is it really just that?

After hearing all the speakers in the lecture series and doing some research of my own, I learned that Luck and chance are two completely different things.  Chance is winning the lottery or other events like that.  Luck on the other hand is mostly what you make of it.  Luck is made up of a few ingredients; hard work, attitude and mostly keeping your eyes open and looking at the big picture.

Hard work in time pays off and gives you your reward but your attitude must stay positive and you must always look at the bright side of things.  Always know that things can be worse and that you are fortunate that they are not.  Know that things happen for a reason and will pick up when they are down and get better when they are already good.  Keeping your eyes open to the big picture is what allows the hard work and the attitude to pay off.  I once heard a story of a man who could not see the forest because there were too many trees in the way.  If he would have taken a step back, he would have realized that all the trees in front of him, made up the forest.

Part of keeping your eyes open at the big picture is seeing the opportunity wherever it is.  Professor Wiseman gives the example of an apple orchard that on the first day wherever you go, you will find apples but if you take the same path on the second day, there won’t be as many apples.  You have to take another route so that you can gather more apples.  So too in business, you have to find the opportunity.  There is plenty of opportunity out there but if you always take the same route, you will use up that opportunity.

Luck can be deceptive according to Holly Cotter, an author and successful entrepreneur and business coach.  You can look at two people that quit their jobs and start their own company in the basement of their respective homes.  They both start the same type of business and work just as hard, putting in the same effort and amount of time.  At the end of 3 months, one of them is turning a huge profit while the other is just barely making ends meet.  To the outsider, one of them is luckier than the other since his business is turning a profit.  The truth in the matter is that the business that is turning a profit was started off with the owners $100,000 worth of savings while the other business started from nothing.  The first business could pay for tons of advertising to get their name out to the world while the second business is still struggling to get started.  Luck can often be very deceptive to the outside onlooker.

Holly’s ingredients for success in starting your own business are consistency, persistence, and patience.  All of which include a great amount of hard work.

Joshua Piven, author of “As Luck Would Have It” has done much research on the subject of luck.  while doing research for his previous books he always heard from his sources about how they had “gotten lucky” in a particular survival situation. He found it odd that people who had trained to survive harrowing encounters often attributed their success to luck. Why didn’t they credit their skills, or preparation, or their vast mental file of knowledge?

One of the main points Joshua made in his writing was that people defiantly put themselves in positions to get lucky.

He asked why are there some people spectacularly successful in business?  Over his research Joshua became well acquainted with Al Kahn, who’s company makes Cabbage Patch Dolls and Pokemon.  It would seem that Al was extremely lucky with these two entities but Joshua said “he is one of the most socially savvy people I have ever met. He just intuitively understands how to deal with people. After understanding this, I think the conclusions drawn in the book about business relationships are even more valid: luck in business often results from a keen appreciation and a broad understanding of relationships and a commitment to keeping them healthy”.  Joshua said that he actually learned quite a bit about his own business relationships from Al’s story.  “He may have been lucky, but he’s also really, really smart”.

In his book, Joshua talks about what he likes to call “Luck Management”.  People find themselves in all kinds of situations but they can be made to work for them based on the choices they make and the actions they take.

Since we cannot control luck, we need ways to deal with its effects, and luck management is a strategy for doing this. Without giving away too much, luck management is a series of steps that make it much more likely that we will benefit from good luck. Things like understanding how our ties to other people and groups operate, how to harness anxiety, how our emotions help us prepare for events, how optimism and faith work, and even how we can “generate” good luck through a broad base of knowledge about our chosen fields of work.
Richard Wiseman is a 37 year old Professor who is the head of the psychology department at theUniversity ofHertfordshire inEngland.  He has been researching Luck over the past ten years and he says that “to a large extent, people make their own good and bad fortune. The results also show that it is possible to enhance the amount of luck that people encounter in their lives”.

Professor Wiseman tells the story of Barnett Helzberg Jr. who he says is a lucky man. By 1994 he had built up a chain of highly successful jewelry stores with an annual revenue of around $300 million. One day he was walking past the Plaza Hotel inNew Yorkwhen he heard a woman call out, “Mr. Buffett” to the man next to him. Helzberg wondered whether the man might be Warren Buffett–one of the most successful investors inAmerica. Helzberg had never met Buffett, but had read about the financial criteria that Buffett used when buying a company. Helzberg had recently turned sixty, was thinking of selling his company, and realized that this might be the type of company that would interest Buffett. Helzberg seized the opportunity, walked over to the stranger and introduced himself.

The man did indeed turn out to be Warren Buffett, and the chance meeting proved highly fortuitous because about a year later Buffett agreed to buy Helzberg’s chain of stores. And all because Helzberg just happened to be walking by as a woman called out Buffett’s name on a street corner inNew York.

Wiseman’s research revealed that lucky people generate their own good fortune via four basic principles. They are skilled at creating and noticing chance opportunities, make lucky decisions by listening to their intuition, create self-fulfilling prophesies via positive expectations, and adopt a resilient attitude that transforms bad luck into good.

Professor Wiseman conducted an  experiment that asked subjects to flip through a news-paper that had photographs in it. All they had to do was count the number of photographs. That’s it. Luck wasn’t on their minds, just some silly task. They’d go through, and after about three pages, there’d be a massive half-page advert saying, “stop counting! There are 43 photographs in this newspaper” It was next to a photo, so we knew they were looking at that area. A few pages later, there was another massive advert that said, “stop counting. Tell the experimenter you’ve seen this and win 150 pounds.

For the most part, the unlucky would just flip past these things. Lucky people would flip through and laugh and say, “There are 43 photos. That’s what it says. Do you want me to bother counting?” They’d say, “Yeah, carry on.” They’d flip some more and say, “Do I get my 150 pounds?” Most of the unlucky people didn’t notice.

Personality tests revealed that unlucky people are generally much more tense and anxious than lucky people, and research has shown that anxiety disrupts people’s ability to notice the unexpected. In one experiment, people were asked to watch a moving dot in the center of a computer screen. Without warning, large dots would occasionally be flashed at the edges of the screen. Nearly all participants noticed these large dots. The experiment was then repeated with a second group of people, who were offered a large financial reward for accurately watching the center dot. This time, people were far more anxious about the whole situation. They became very focused on the center dot and over a third of them missed the large dots when they appeared on the screen. The harder they looked, the less they saw. And so it is with luck–unlucky people miss chance opportunities because they are too focused on looking for something else. They 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 types 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.

Although it may seem strange, under certain circumstances, this type of behavior will actually increase the amount of chance opportunities in people’s lives. Again, we look at the Apple orchard scenario.  Each day you have to venture into the orchard and collect a large basket of apples. The first few times it won’t matter where you decide to visit. All parts of the orchard will have apples and so you will be able to find them wherever you go. But as time goes on it will become more and more difficult to find apples in the places that you have visited before. And the more you return to the same locations, the harder it will be to find apples there. But if you decide to always go to parts of the orchard that you have never visited before, or even randomly decide where to go, your chances of finding apples will be dramatically increased. And it is exactly the same with luck. 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.

Wiseman wondered whether lucky people might be using counterfactual thinking to soften the emotional impact of the ill fortune that they experienced in their lives. To find out, he decided to present lucky and unlucky people with some unlucky scenarios and see how they reacted. He asked lucky and unlucky people to imagine that they were waiting to be served in a bank. Suddenly, an armed robber enters the bank, fires a shot, and the bullet hits them in the arm. Would this event be lucky or unlucky? Unlucky people tended to say that this would be enormously unlucky and it would be just their bad luck to be in the bank during the robbery. In contrast, lucky people viewed the scenario as being far luckier, and often spontaneously commented on how the situation could have been far worse. As one lucky participant commented, “It’s lucky because you could have been shot in the head–also, you could sell your story to the newspapers and make some money.”

The differences between the lucky and unlucky people were striking. Lucky people tend to imagine spontaneously how the bad luck they encounter could have been worse and, in doing so; they feel much 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.

There’s a big distinction though between luck and chance. Chance events are like winning the lottery. They’re events over which we have no control, other than buying a ticket. They don’t consistently happen to the same person. They may be formative events in people’s lives, but they’re not frequent. When people say that they consistently experience good fortune, I think that, by definition, it has to be because of something they are doing.

Wiseman argues that we have far more control over events than was thought previously. You might say, “Fifty percent of my life is due to chance events.” Wiseman says, “it’s not. Maybe 10% is. That other 40% that you think you’re having no influence over at all is actually defined by the way you think.”

One way that lucky and unlucky people think differently is that the trick is to be open to new experiences. Unlucky people are stuck in routines. When they see something new, they want no part of it. Lucky people always want something new. They’re prepared to take risks and relaxed enough to see the opportunities in the first place.

One of the most counterintuitive ideas about this theory is that 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. It’s about getting people to have various game plans running in their heads. Unlucky people, if they go to a party wanting to meet the love of their life, end up not meeting people who might become close friends or people who might help them in their careers. Being relaxed and open allows lucky people to see what’s around them and to maximize what’s around them.

Lucky people practice “counterfactual thinking.” The degree to which you think that something is fortunate or not is the degree to which you generate alternatives that are better or worse.

Unlucky people say, “I can’t believe I’ve been in another car accident.” Lucky people go, “Wonderful. Yes, I had a car accident, but I wasn’t killed. And I met the guy in the other car, and we got on really well, and there might be a relationship there.” What’s interesting is that both ways of thinking are unconscious and automatic. It would never occur to the unlucky people to see it a different way.

According to Richard Wiseman, these four principles can create good fortune in your life and career.

1. Maximize Chance Opportunities

Lucky people are skilled at creating, noticing, and acting upon chance opportunities. They do this in various ways, which include building and maintaining a strong network, adopting a relaxed attitude to life, and being open to new experiences.

2. Listen to Your Lucky Hunches

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.

3. Expect Good Fortune

Lucky people are certain that the future will be bright. Over time, that expectation becomes a self-fulfilling prophecy because it helps lucky people persist in the face of failure and positively shapes their interactions with other people.

4. Turn Bad Luck Into Good

Lucky people employ various psychological techniques to cope with, and even thrive upon, the ill fortune that comes their way. For example, they spontaneously imagine how things could have been worse, they don’t dwell on the ill fortune, and they take control of the situation.

Ilan Kaufthal started off his lecture by saying that “you can’t over-plan life”.  He says that you must “work hard, you need luck, and you will end up where you never expected”.  “Five and ten year plans don’t work”.

Ilan mentioned that he was supposed to acceptColumbiaUniversity’s scholarship and go there for his Masters of Business Administration.    He was even in their Student directory already, but last minute he got a call from Professor Edward Altman from New York University who offered him a full scholarship and an internship offer which changed his mind and Ilan ended up at New York University.

Ilan explains that a good part of his career was luck. For example, when he was working for National Lead, they bought an oil company a year before the oil prices sky rocketed.  Nobody could have predicted it, it was “pure luck”.

Later in his Career, Ilan became the sole advisor of a Mormon company because he made a connection with a high person in the Mormon Church who asked him if Ilan was an Israeli name and if he ever goes toJerusalem.

Bear Sterns, Ilan’s Company makes top executives sign a contract to give at least four percent of their income to Charity each year.  Ilan is more charitable than that with his income as well as with himself by being active in the community and sitting on many boards.

At the beginning Ilan mentioned luck quite a few times but at the end of the speech, he didn’t mention it once.  He said that “you should learn from your mistakes, treat your secretary with the same respect you give your top executive” and most of all “work hard, work your you know what off”, because it’s the smart hard working nice guy, that finishes first.”

Ilan closed by saying that “common sense is most important”, just “know your facts”.

Jerry Levin did not emphasize as much on luck but he did mention some things in his career that were “lucky”.   He said that he “never knew what was coming next”.  He would just have to hope for the best.

Levin said that when they built Pillsbury Co., they made fifteen million dollars and then lost it all.  Everyone told him that he should sell it but he decided to hold on to it for a while.  The company is now worth Billions of dollars.  Because of this turnaround event, Jerry now had a passion for the first time in his life.  He wanted to be a “turnaround” business person.  This started Jerry’s career and brought him to where he is today.

Jerry Levin gives us advice on how to succeed.  He says “integrity, honesty, morality, ethics, when people know that you are straight, they will listen to you”.  He ends by saying “never bend the rules of your principles, no job is that important”.

Jay Forman did not mention luck during his lecture but he did give us his formula for success.  Jay says that the three main ingredients of successful entrepreneurship are “focus, determination and sacrifice”.  He then tells us other important advice that helped him along the way.  “Don’t burn bridges”, Jay could not express it enough.  His whole career was in the toy industry moving from one company to another and dealing with the same people.  He says that you never know who you are going to need later down the line.  Always “keep good relationships with everyone”.

Another piece of advice that Jay gave us was that if you hear rumors that your company is closing down or being sold and they tell you not to worry, that nothing is going to happen, you should “get your resumes ready”.  Rumors have to come from somewhere.

Jay said that “by moving from one job to another, you get more pay increases”.  Jay not only moved from job to job but he moved from city to city.  He got his experience from all over, everywhere he went.  He kept moving to new places, always searching for new “luck” or opportunity.  Even recently since he spoke to us, he sold his company and moved on.

The last piece of advice Jay gave us was in his words exactly “don’t be a putz, be good to people you work with and people that work for you.  What goes around comes around.”

Lillian Vernon is a woman of few words.  She likes to give one word answers and keep things simple and short but she told us that in life we should “do all the things that you want to do, don’t give anything up.”  Lillian was telling us we should do everything we want to do because otherwise we could be passing up some great opportunities.

When looking for a job, Lillian says that we should “know exactly what you want to do”.  That way you will go directly for your goal and not be distracted by anything else.

We see that although many of the speakers spoke of luck and being lucky, each one of them had success down to a science.  They told us what we should do to be successful and how we should do it.  Each of the speakers in our lecture series was living proof that there is a science to success.  If you work hard and do the right things, success will come to you.

Every speaker told their story but in the end, in their own words, they were all telling us the same thing, you need to work hard.  You have to stay ahead of the game.  Once again as Ilan Kaufthal said “work your you know what off”.  That is the main ingredient for success.  If you are just an average worker, you will end up being below average in outcome. Peter Kash said that “’A’ people, surround themselves with ‘A’ people and ‘B’ people, surround themselves with ‘C’ people”.  If you don’t go for the top and strive to stay there, you will fall and end up close to the bottom.

Joel Mael was the same as all the other speakers he got to where he was through hard work.  He said to get into graduate school, you have to know how to sell yourself.  That is what he did when he got into Harvard Business school straight fromYeshivaCollege.  He was the only one in his class at Harvard that got in straight from college without prior work experience.

When he applied to Harvard, he spent 2 months, day and night working on his application making sure it was perfect.  When he got his first job, it was because he offered to work for free and prove himself.  He was asked for two letters of recommendation, he sent nine.  He was always doing things way above and beyond the average, or even above average worker.

Peter M. Kash wrote a book “Making your own Luck” which sums up what luck really is.  This book is a practical guide for getting the most from what you have. This book is really a feel good kind of book not based on heavily researched scientific fact.
Peter Kash reminds the reader of old platitudes and gives antidotal evidence support these platitudes. Yet in the hustle and bustle of everyday life these reminders are welcome and help realign the compass guiding our lives.
Kash reminds us that life is full of unexplained coincidences. If we notice and engage (rather then ignore) these coincidences we can usually find opportunity knocking. Make your own luck covers topics such as failure (required to succeed), rejection (required to succeed), finding a purpose in work and specialization (which can be a path to success).
The underlying tone is the golden rule. Do unto others as you would have them do unto you. Peter adds the concept of the “web of life”, which could be described as “what goes around comes around”.

Peter Kash makes the point in his highly entertaining and instructive book, Make Your Own Luck, that for the most part we make our own luck. “I’ve worked at my marriage and my financial practice, and the harder I worked, the luckier I got”. Kash is convinced that good luck in business and in life just doesn’t happen. Good luck can happen to anyone who works at it.

The author tells stories of serendipitous opportunities, unexplainable coincidences and chance encounters that have opened new doors to him and others. Some would call it luck. Some would call it seizing the moment. His book effectively illustrates that anyone can make his own luck by learning to recognize the signs of opportunity knocking.

Most people enter the work force for financial reasons. Sooner or later they may find that they want more out of life than a paycheck. They want to become their best selves. Make Your Own Luck is a practical guide to helping turn an everyday job into a rewarding and fulfilling life.

The first step, Kash says, is to be clear about what you want from your career. The second is to know what you must do to accomplish this.

Kash says that opportunities usually show up as coincidences, many times in humble packaging. And he provides guidance on how to recognize these situations, when to surge ahead and when to hold back. The author makes one guarantee: We will fail again and again. Failure is an essential experience on the path to success. All success is based on our actions in the wake of failure.

Kash outlines five rules for turning failure into success:

1. Listen to your heart. Once you know your heart’s desire, never give up.
2. Listen to your critics. Don’t take the criticism personally, but learn from it.
3. Stay on the path to your goal. The route to our dreams has obstacles. It’s our job to overcome the roadblocks on the road to success.
4. Pay the price.
5. Have complete faith in yourself.

The author says that to create opportunity, you need to specialize and become an expert in one area of your profession. Developing knowledge and skills in a specific area is one way to accrue power and wealth. “This seems to work because I have done this in my own career. I started out selling life and property and casualty insurance to anyone who would give me five minutes. Since then, I’ve narrowed my area of specialization to deferred compensation planning for executives of nonprofit organizations. Contrary to logic, limiting me has opened unimagined doors.”

Although Spielberg attended CaliforniaStateUniversityin Long Beachstudying English, he couldn’t get into a traditional film school. As with anything, Spielberg wasn’t going to let that stop him. Breaking into the movie industry, for Spielberg was said to be a very literal thing. Spielberg disappeared into the Universal lot while on a tour. He apparently found an abandoned janitors closet, cleaned it up, and turned it into a presentable office. Every day Spielberg would walk right past the security guards at the gate, wearing a suit and tie.  The guards just assumed that he worked there and did not want to bother Spielberg because he seemed important.

While on the inside, Spielberg started production on Amblin. It was a 24 minute movie about a pair of hitchhikers. The $15,000 budget came from a friend of his, who was also trying to break into the movie business. Amblin won several film festival awards, and more importantly, got him the attention of Universal Studios.

Seinfeld and Cheers were both among the greatest television shows of our time and they were both supposed to be canceled after the first season.

 

Walt Disney, the creator of Disney world, Mickey Mouse and many other famous characters that children grow up with went bankrupt with his first cartoon.

 

Paul Cunningham was burned badly and his parents were told that he would not live.  He survived and started to recover but the doctors said he would never walk.  When he started to walk, the doctors said he will never run.  Paul Cunningham turned out to be the first American ever to run the four minute mile.

 

Kurt Warner was a Super Bowl MVP.  Not many people know that he started his career throwing paper towels down the aisles at the grocery store he worked at.

 

Steven Jobs was rejected from Hewlett Packard.  He told them that he was willing to take any job, even in the mail room and they can have his idea for a new computer for free.  They did not want to know from it.  Steven Jobs was the creator of the Apple computer.

 

The Beatles were one of the greatest music groups ever but Decca recordingCo.rejected them and told them they have a sound that no one will listen to.

 

The business plan for FedEx got a “C” grade in Yale because the teacher thought it was not feasible.  I’m sure that professor regrets that now that it is one of the most successful businesses of its type.

 

Mary Kay was one of the best encyclopedia salespeople in her company but they would not promote her to a management position because she was a woman.  She decided to leave them and start her own very successful cosmetics company.

 

One of the best examples of failure being the next step towards success is one of theUnited States’ greatest Presidents ever, Abraham Lincoln.  He tried business and failed.  He tried politics and failed.  He tried each of those again and again, failing each time until he finally became President of theUnited States.  He was quoted as saying “You have to do your own growing no matter how tall your grandfather was.”

 

Morry Wiess of American Greetings was the last speaker in the lecture series.  He told us that he tries to keep his company ahead of the game by following what Wayne Gretzky said that made him such a great player.  He said he goes to where the puck is going, not to where the puck is.  Morry likes to keep the company moving by going to where the industry is going.  They take new routes to get to new areas and that keeps them “lucky”.

 

“Good Luck” is one of the most used greetings that people give to wish their family friends and peers success.  Luck is looked at as success.  Having good luck or being lucky means that you are successful.  Having bad luck or not being lucky means you are not successful.

Many speakers spoke about luck but in the end, somebody else with their same fortune would not end up down the same road.  The word “luck” is a cover-up for knowing what to do, when to do it and how to do it.

 

The speakers often spoke about how they went from job to job or career to career but they didn’t necessarily mention the difficulty or the process they went through to get to where they were.  They put in actual time, sweat and frustration in to getting their next job or moving to their next city.

 

Charity and work in the community outside of your business life gives people better luck because it brings them to new places and gives them new experiences.  Most of the speakers in our lecture series were very active in their community and extremely charitable.

 

We see from many examples how luck in business as defined by the dictionary is really just chance and real luck is just a state of mind and not an uncontrollable fate.  We saw how you can make your own luck and finish up on top.  We learned that failure is part of the path to success and that with hard work and the right attitude, you can get to your goal.  As Peter Kash said, “The journey is more important than the destination”.