I asked a wealthy client about the beginnings of his fortune. As a child, he accumulated $600 through odd jobs and gifts. While in college in the early 1960s, he invested this savings into the stock market. By the time he got out of school he had multiplied his stake into enough cash to support himself for years, travel to Europe, and finance his first business.
I remarked, “Even in the go-go bull market of the 60s, that is an amazing return. You must have made some very smart investments. Why didn’t you continue onto a career in investing?”
My client is not a modest or self-effacing man, but he does see events clearly. He replied, “I did make some good investments, but I was smart enough to know I was lucky.”
Maybe this is why we use the same word, fortune, for both “chance” and “wealth.”
During the Internet bubble, I assisted with a large event for entrepreneurs by working the registration desk. It was busy until a few minutes after the speech began, a How I Did It presentation by an executive at a suddenly large dotcom.
One of the organizers said, “I can handle the late arrivals. Go in to hear the talk.”
“That’s okay,” I replied. “You go.”
“Don’t you want to hear it? He’s one of the founders!”
“Why would I want to hear him? All he can tell me is what he thinks is the reason it worked, but he doesn’t actually know. He got lucky but believes he’s a genius.”
Too many successful business people do not realize that being struck by lightning doesn’t make you an expert on electricity.
We all make thousands of decisions and take millions of actions. After assessing the results as a “failure” or a “success,” we attribute the outcome either to (more…)
People are often surprised that I do not read popular business magazines, the latest management books, or eagerly attend speeches by top executives and successful entrepreneurs. I am certainly not knowledge averse; I read a great deal and love information. I am very interested in business and know a lot about it. Clients know that there is seldom an aspect of their enterprise I can not comment upon usefully. I just do not get my data from the usual sources.
…it’s easy for pundits and professors to claim that someone blundered. Decisions that turned out badly are castigated as bad decisions. However, these sorts of judgments are erroneous, made retrospectively in light of what we know to have happened subsequently. These errors are surprisingly widespread in the business world. They affect not only journalistic accounts about specific companies, but also undermine the data used for large-scale studies about company performance. They lead to a broad misunderstanding of the forces that drive company success and failure. As we will see below, some of the most popular business studies in recent years are undermined by fundamental problems of data integrity.
strategy is about choice, and choice involves risk. There are no easy formulas to apply, no tidy plug-and-play solutions that offer a blueprint for success.
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