Clicky

Tuesday, May 29, 2020

What do businesses and Las Vegas have in common?

Both typically produce big winners as a result of one or two lucky bets


Organizations fail because they rely more on repeating past successful behavior than risking failure by trying anything new. Individuals do the same. People are very poor at accepting the importance of chance and context in their lives. Focusing on your successes is a recipe for blindly repeating the past. Failures, however, always have a learning message and the potential for growth. Coyote explores why getting the reasons for success wrong dooms people and organizations to long-term mediocrity.

One of the enduring myths about the world of work is that effort is the key to success. Whether that effort comes in the form of long hours, constant endeavor, or sacrifice of much of the rest of what life has to offer, the belief that, somehow, hard work is always going to be rewarded is at the heart of much of the folklore that governs how people behave in the workplace.

This belief endures because it is both comforting and convenient: comforting to the individuals who do the hard work, and can always believe that it will help them win big one day—even if it hasn’t yet; and convenient to employers, who use it as a way to persuade staff to continue to make determined efforts on the basis of vague promises about the future.

But is it true?

Simple observation suggests that it is not—at least in most circumstances.

Of course, some degree of determination and persistence is important. Giving up too easily, or lacking determination enough to make the required effort, will doom almost any hopes of success. But they are rarely the prime reasons for success in themselves; and there are many, many instances where individuals and organizations have exerted themselves to an almost superhuman extent, only to fail. There are also many cases where someone, or some organization, has done very little, only to be “rewarded” with an amazing amount of success.

The decisions that count for most

Most businesses depend on a relatively small number of large, often risky, decisions. The launch of a new product line. Entry to a new market. Purchase of a competitor. Expansion overseas. To see these as “bets” is quite fair, because that’s what they are, however carefully they have been researched and discussed beforehand. An obvious, safe, incremental step isn’t going to produce large rewards, if only because everyone else will know about it too and probably already be doing it. It’s defensive, not a move to extend or enhance. Only decisions that aren’t obvious, carry risk, and take the organization into new territory stand a chance of creating significant profits and stealing a march on competitors.

The same is true for individuals. The solid, hard-working, cautious, risk-averse person who always does the obvious isn’t going to make it to the top—especially in competition with those willing to take bigger risks and flaunt their successes more openly.

These make-or-break decisions are bets on an uncertain future. Get a few right, and you’ll look like a genius—even if what won you that acclaim is almost entirely luck, or other factors outside your control. That’s why you often see high-profile leaders with a track-record of recent success suddenly run out of steam and appear clumsy and incompetent. They haven’t changed. They’ve just run out of their lucky streak, or found themselves in new circumstances unfavorable to their way of thinking or doing things.

Why success doesn’t help you learn

People are very poor at accepting the importance of chance and context in their lives—save when they are looking for an excuse for some bad mistake. We much prefer to believe that our successes are due to our own brilliance, while our failures are caused by bad luck and the mistakes of others.

This would be a harmless, if childish, failing were it not that it stops us from learning how to do better. Focusing on your successes is a recipe for continually repeating the past. There is not much to be learned from them, especially if you mis-attribute the reason for success to some personal action, when it was really the luck of being in the right place at the right time. Failures, however, always have a learning message—often one that is a vital step towards eventual success. But you cannot hear that message if you are always mis-attributing the reasons for your failures to bad luck, the errors of others, or unforeseeable events.

All the rush and haste of Hamburger Management leaves neither time nor inclination to sort out the true reasons for success or failure. Like the gambler in Las Vegas, the Hamburger Manager usually believes that he or she can somehow win over the odds consistently, even if no one else does. The result is the same in both cases: repeating the same behavior that once (supposedly) let you win big, until it causes you to lose even bigger. Organizations fail because they rely more on repeating past successful behavior than risking failure by trying anything new. Individuals do the same. It takes a long-term view to see the truth, but that’s something few people or organizations seem to possess.



Email Newsletter icon, E-mail Newsletter icon, Email List icon, E-mail List icon
Sign up for our Email Newsletter




Labels: , , ,

Add to Technorati Favorites Stumble Upon Toolbar

2 Comments:

Terry said...

And one day Google will come down to earth. Sure it's taking a long time but Microsoft is slowly coming down.

7:15 PM  
Carmine Coyote said...

I guess so. Very few organizations have the courage to keep changing. Very few people do either.

Keep reading, my friend.

9:25 PM  

Post a Comment

<< Home

Creative Commons License
This work is licensed under a  Creative Commons Attribution-NonCommercial-NoDerivs 2.5 License.