Planning- the Role of Luck
Two fine fellows set out to make $1 million in a year. They both write their business plans and get started. A year later the first fellow has made $500,000 and the second fellow made $10,000,000. Which one is the better businessman?
All things being equal (which they never are), most people would say the second fellow. After all, he made a bunch of money. I certainly would have liked to have had my money invested with good old number two. However, if you think about it, which one did a worse job in the upfront analysis. They both wrote plans. The first guy was off by about 50 percent of this plan to make $1 million. The second guy was off by 1000 percent! Clearly, the first guy was much closer to his goal. But we don’t keep score that way in business; we keep score by adding up all the money. If we kept score by a businessperson’s ability to properly plan and forecast we would have a much different set of business heroes.
So often we are confronted with experts from the ilk of man number two. They started a company that turned out to grow beyond their wildest dreams. Some were smart and were able to adjust their business plan for the windfall. Some let it go to their heads or wound up getting distracted only to ride the wave until it crashes on the beach. As entrepreneurs we need to aspire to me like man number one, but hope to be man number two. The challenge is to properly manage miscalculations that could blow the doors off your goals.
The above story doesn’t tell us what drove man number two towards $10,000,000 or what kept man number one at $500,000. However, there is a universal term for the events- luck. In the case of man number two we might say he had “good” luck. In the case of man number two we might say he had “bad” luck. However, I propose a different point of view that will help an entrepreneur better manage the role of luck in their business and in their life. That point of view is that there is no such thing as good luck or bad luck. Luck is luck.
Luck is simply anything that happens that you didn’t plan for. My friend’s house burned down a few years ago. He didn’t plan on that happening. Was the fire bad luck? Not when you consider the fact that he didn’t like the house anyway and wanted to remodel. His insurance was great and allowed him to rebuild the house just the way he wanted while renting a nice apartment downtown. Was the fire good luck? The answer is that it was neither; it was simply an event that my friend didn’t plan on. He integrated the event into his plans to remodel anyway and was able to accelerate meeting his goal.
If you are planning properly and outline your goals luck will be those things that either get you closer to your goals or further away from your goals. When it happens you need to see the event for what it is and adjust your expectations. When you allow luck to derail your plans altogether trouble starts.
Lots of people win the lottery only to be broke a few years later. Why? Because the event either derailed their life’s plans or they didn’t have a plan in the first place so the event took them into unknown territory. Many people have the goal of retirement at age 65. Their plans may not be that concrete, but they have a milestone to meet anyway. Winning the lottery might get you closer to retirement. But how much closer? How do you have to live in order to retire? Maybe the three houses, Ferraris and caviar snacks weren’t the best idea. Those were likely things that were never in your plan in the first place.
The moral of the story? Always plan carefully, set your goals and be prepared to adjust your plan if luck pushes you towards or away from your goals. Don’t abandon your goals just because of the unexpected. When we call things good luck or bad luck we treat them improperly. We feel good about good luck and bad about bad luck. When you treat them both the same, as challenges to be overcome, you will always be on the right track no matter what life throws your way.
