Hunkering down in year-end strategic planning sessions, you are probably thinking about what’s next for the economy and how that will affect your business.
Slow down. You should be laser focused on maximizing what Jim Collins, in his book “Great by Choice,” calls your “return on luck” – one of the most important business concepts ever articulated.
Collins notes that great companies don’t have better luck than other companies. Sometimes, they get a bum deal. What differentiates the great companies is their attention to maximizing their return on luck. They look for opportunities in whatever hand they’ve been dealt – and then find ways to grow from the situation exponentially.
They think like one of my mentors, who made a fortune in commercial real estate. He invested in an empty, commercial high-rise in Houston during the depths of a severe recession – and turned it into a thriving storage facility at a time when no one could find ways to rent out commercial properties. That move enabled him to ride out the recession and, once it was over, make a bundle when he sold the building.
When you’re thinking about your goals for 2013, it’s important to take a look back at your luck in 2012. Ask your team: Where did we maximize our return on luck? And where did we fail to do this? This will give you some ideas on what to continue doing – and lead you to untapped opportunities to act upon.
Then look at the situations you’re facing currently. Where are you experiencing good luck – and bad luck? How can you make the most of your current fate, and turn the situation to your advantage? By incorporating your ideas into your plans for the year, you will find it easier to execute them rapidly.
Strategy will only get you so far; execution is key when it comes to maximizing your return on luck. You must be ready to act on your ideas for maximizing your luck all the time, or you will miss out on valuable opportunities.
Build a “luck network” by bringing more successful people into your professional network – perhaps by taking a leadership role in an industry organization or through social media.
Create a “luck investment account.” Often, it takes capital to invest in new ideas. If you don’t have any cash on hand, you’ll miss out, which ties to one of the other findings in “Great by Choice” – the winners had multitudes more cash reserves than the comparable companies – and thus had enough staying power to weather the bad luck and capitalize on the good luck.
The time to start tucking money into your account is long before you find yourself with a great idea to pursue.
Once you get in the mind-set of maximizing your return on luck – whether it’s good luck or bad luck – you’ll be surprised by how quickly you can grow your company.
Harnish is the founder of Gazelles. Synk is the founder of In-Synk and is the Gazelles Coach in Memphis. Contact Michael at firstname.lastname@example.org.