A friend of mine knows an angel investor who has an interesting way of tackling the heap of business proposals that end up on his desk every month from hopefuls seeking finance.
He arbitrarily divides the heap into two equal piles and sweeps one straight into the bin. The proposals left he quickly scans, taking seriously only those few that have all the qualities he’s looking for.
"I want to invest in lucky businesses," he explains. "The ones that avoid the bin have at least got that."
Whether truth or urban myth, the story does a great job of illuminating the realities of luck in business, the first of which is that it really does exist and it really is random – despite the protestations of those revisionists who find it impossible to reflect on their success without insisting that they "made their own luck".
Aside from the semantic absurdity – if luck could be "made", it would cease to be luck – there is more than a touch of hubris in believing that a mere mortal can control the uncontrollable, along with everything else in a hyper-successful life. And it’s revealing that no-one claims to have made their own bad luck – that just happens.
Another pervasive illusion is that you can wait for luck to come along and grab it with both hands once it does, as though it always has the good grace to announce its impending arrival. As the story shows, your good – or bad – luck may have happened some way back in the chain of causal connection, without your knowing.
The implication is daunting: most of what you need to do to "play" your luck will already have been done. Which takes us to the third point illustrated by the two-piles tale.
Most elements of business, luck included, are multiplicative, not additive. This sounds exciting but actually isn’t because, once any element gets a zero, out of whatever possible score you like, the product of all the elements will be zero.
So – the angel investor looks for profitability, scalability and business-team strength. Plus luck.
Let’s assign scores for each, from zero to five, for one of the proposals he glances at. Well, luck is binary in this case, and it escaped the bin, so it got a five.
Let’s say profitability and business-team strength are also fives, but scalability just isn’t there. It’s a zero. In situations like this, managers will often think they stand a chance because they add the scores, and 15 out of 20 doesn’t seem too bad. But multiply them and it’s zero.
Even when luck’s on your side, it doesn’t count unless everything else is positive too. That’s why, of all the habits in business life, switching from additive to multiplicative thinking is probably the best inbuilt advantage you can give yourself.
There’s a nice marketing story from this summer that pretty much shows all the above in action. Venerable men’s tailoring brand Moss Bros reported stellar figures, thanks in no small part to a fortunate trend that has "become colossal", in the words of its chief executive, Brian Brick.
British schools and universities have adopted the US tradition of big, year-end leaver parties – or "proms". The girls go in fabulous dresses and the guys go in formal suits – which they hire in their thousands from Moss Bros.
That’s the luck bit. Now look at what Moss Bros had already done to improve its business, as part of a modernising drive started in 2008: revamped its stores; broadened out from its thick, dated, "bulletproof" dinner jackets to stylish lounge suits in luxurious materials; and created an exciting, customised digital experience.
If it had waited for a trend nobody knew would happen before making those changes, it would have started too late. If just one of those improvements hadn’t gone ahead – still scoring a zero, say, for digital – the teenagers would have found somewhere else.
It made it into "the right pile", at the right time – with the right stuff. It’s tempting to conclude that Moss Bros "deserves" its fabulous stroke of luck but even this is to fall prey to the illusion of agency where none exists.
There will be other businesses that have done things every bit as well without getting the lucky break – or which have seen fortune turn against them. Luck: zero. It’s random. The world isn’t fair. None of us – especially those with "strategy" in our titles – likes to think that our greatest successes are partly down to sheer chance, but it would be more grown-up if we could.
Certainly, if I were hiring, and there were a candidate prepared to admit as much, I would be jolted into taking them seriously. They’re honest. That’s good. And they’re lucky! If I’m going to invest my hard-earned money in a bright young analyst, I wouldn’t say no to that.
Lenses on luck
Luck is not something you can mention in the presence of self-made men." EB White
"The more I practise, the luckier I get." Gary Player
"Life’s outcomes, while not entirely random, have a huge amount of luck baked into them. Above all, recognise that if you have had success, you have also had luck – and with luck comes obligation. You owe a debt, and not just to your gods. You owe a debt to the unlucky." Michael Lewis
"I believe in luck: how else can you explain the success of those you dislike?" Jean Cocteau.
Helen Edwards is the former PPA business columnist of the year. She has a PhD in marketing, an MBA from London Business School and is a partner at Passionbrand.