Sure, sometimes you’re the lucky recipient of spontaneous innovation, but according to business gurus, consistently good innovators actually have strategies for leveraging luck (the good and the bad) when it trips across their paths.
In “Great by Choice” Jim Collins and Morten Hansen have unearthed a fabulous idea they’re calling Return on Luck, and we all have something to learn from this concept.
There is power in recognizing reality, even when you can’t explain it.
The first brilliance of Return on Luck is that the researchers noticed it at all. Luck holds a position in business school lexicon somewhere near “magic,” i.e., somewhere near the bottom. But Collins and Morten recognized that just because it’s not predictable doesn’t mean it’s not real – or a function of business success.
After what sounds like exhaustive analysis on whether successful companies are luckier than others (they’re not), whether luck is a rare occurrence (it’s not) and whether luck is quantifiable (it is), they discovered that the luck itself wasn’t the interesting phenomenon.
It is a companies’ response to a “luck event” that matters.
When you’re thirsty it doesn’t matter if the glass is half empty or half full.
It turns out that the most successful companies accepted that good and bad luck occurs naturally and – rather than moaning, crowing or treating luck as an anomaly – they consistently asked themselves, “how can we turn this to our advantage?” The answer to that question often turned out to be a huge win for them regardless of the type of luck they experienced. Collins and Hansen cite the example of how Progressive Insurance used a bad luck event (a political referendum that dealt them a huge financial blow) to catalyze a massive change effort that overhauled the company.
This makes sense, doesn’t it? When we look at luck’s patterns, even randomness is ok once we’ve accepted the reality that a luck event changes the rules and – for a brief period at least – the appetite, need and desire for larger change has increased. If part of your leadership strategy is change, this is great news.
The research proves that, more often than not, those who don’t waste luck live to reap its return.