Methods Based on Scientific Studies and Formal Logic
Being Successful in Business
What does it take to be successful in business? A great idea? Hard work? Driving ambition? Julius Rosenwald, the president of Sears, Roebuck and Company, an American chain of department stores, was president of the company in the early 1900s. One of the most successful businessmen of his era, he asserted that luck was the key factor in the success of any business.
‘Entirely too much stress is put on the making of money. That does not require brains. Some of the biggest fools I know are the wealthiest. As a matter of fact, I believe that success is 95% luck and 5% ability. Take my own case – I know that any number of men in my own business can run the business just as well as I can. They didn’t get the breaks – that’s the only difference between them and me.
’Julius Rosenwald, President, Sears, Roebuck and Company.
Although a radical statement at the time he said it, his insight has now been proven to be right on the money. But that isn’t the end of the story. Knowing that you need luck to be successful is one thing. Knowing exactly what luck is, and how to get it, is quite another.
What is luck?
Let’s start with an easy question. Would you like to be luckier in business? Well, of course. Every businessperson would answer in the affirmative. Now let’s go to another question that looks just as easy. What is luck? While it might be easy to rattle off a dictionary definition, you might be surprised to learn how many people don’t understand how luck works. Let’s look at some situations involving luck.
Monty Hall Problem
This brain teaser is based on the American game show, Let’s Make a Deal. You have a choice of 3 doors. Behind two of the doors is a goat. And there is a car behind one of the doors. Let’s say you choose Door 1. The role of the host includes these three rules AFTER you make your choice:
- The host must open a door not picked by you.
- The host must open a door to reveal a goat.
- The host must offer you the chance to stay with your original decision or choose the remaining closed door.
The host opens door 3, which has a goat behind it. Question: What are the odds of winning if you stay with your original decision as opposed to switching. Most people would say the odds are 50/50 – but actually, if you switch, you have a 2/3 chance of winning. Have a look at the picture below.
If you ask someone who buys lottery tickets why they buy them, a common answer is that someone has to win and it might be me. That may seem harmless – but it’s one of the worst ways to spend your money. This is because the chances of winning are so astronomically bad. Most people are not good at dealing with large numbers so it isn’t easy to grasp just how close to impossible winning a lottery is. You would be much luckier spending your money on almost any other investment – like stocks or real estate.
Have you ever been to a casino and watched people with a scorecard writing down dice rolls when they are playing craps? Why do you think casinos give out these scorecards? Simple – because the people using them get NO advantage. Previous performance, whether it be in dice or cards, is a very poor indicator of what will happen in the future. If you’re going to gamble, you’ll be luckier if you try games that involve at least some degree of skill like blackjack.
Two Excellent Books on Luck
If you’d like to learn more about luck, I recommend these two books:[widgetkit id=”9″]
How to be Lucky
Now that we’ve looked at what luck is (and isn’t), let’s examine how to get it. There have been millions of words written on the topic of how to be lucky, a lot of which is at best misleading and at worst complete nonsense.
So, what is the answer? Here we go…
Who are the luckiest people?
The luckiest people know how to strike a balance between logic
and emotion. They never let one predominate over the other.
Multiple studies have proven this to be true. But before we can follow this maxim, we first need to think about what logic and emotion are. Just like with the concept of luck, many people THINK they understand what logic and emotion are – but they don’t, or they only partly know.
The world is full of logical fallacies – reasoning that appears to be a valid argument but is actually false. It’s important to be able to discern the difference between a real valid argument and a logical fallacy that merely looks like one – otherwise you’ll never a balance between logic and emotion and you won’t be able to maximise your luck.
Examples of Logical Fallacies
Ad hominem argument (argumentum ad hominem in Latin) – this is where you make a personal attack against a person, rather than against what they are saying. Your attack is based on feelings of bias or prejudice, rather than reason, logic or facts.
Example: Using gender to attack an argument from the opposing gender.‘You’re a man. You can’t possibly understand this because it’s a female issue.’
Slippery Slope – this kind of argument is where you show concern for taking a relatively small first step because you assert it will lead to a series of more and more seriously negative outcomes, without showing any logical causal links
Example: ‘If we let people smoke marijuana recreationally, then it will be viewed as normal. If it is viewed as normal, that will increase the likelihood many children will not see any danger with it and try it. Then, as these children grow older and have children, their liberal views will become mainstream and there will be drugs everywhere. So, we shouldn’t legalise the use of recreational marijuana.
Fallacy Fallacy – some people call this one ‘Don’t shoot the message.’ Even if the messenger is wrong, that doesn’t mean the message is. Using false logic to support a conclusion is not proof that the conclusion is wrong.
Statement 1: If it’s raining, the sky is grey.
Statement 2: The sky is grey.
Conclusion: It’s raining
This argument contains a logical fallacy – it’s possible it’s not raining, even if the sky is grey. However, just because the argument is fallacious, that doesn’t mean the conclusion is automatically wrong – it is actually possible that it is currently raining.
Marketing = pure logical fallacy
In business, you can describe logical fallacies as marketing 101. You cannot build any marketing campaign without using them. This is because a scientific process based on logic and the process of convincing someone through emotion are two different things.
Logic is not important in marketing – emotion is. You appeal to people’s emotions, not to logic. People justify purchases with logic but buy with emotion.
Reviewing these dimensions is important because they are based on emotions. So, in order to attract more luck, it’s important to know which personality dimensions have a correlation with luck and which ones don’t. There are FIVE personality dimensions:
Only THREE of these have a correlation with luck.
Agreeableness = a personality trait manifesting itself in individual behavioural characteristics that are perceived as kind, sympathetic, cooperative, warm, and considerate.
Agreeableness HAS NO correlation with luck.
Conscientiousness = the quality of wishing to do one’s work or duty well and thoroughly.
Conscientiousness HAS NO correlation with luck.
Extroversion = how outgoing and social a person is.
Extroversion HAS A VERY POSITIVE effect on luck.
Introverts with learned extroversion skills are much more effective than anyone else because they are cautious at how they approach extroversion.
Learned extroversion can be achieved through Emotional Intelligence (EQ). Emotional Intelligence is a learned behaviour. EQ can be broadly classified into four categories:
- Self Awareness
- Self Management
- Social Awareness
- Relationship Management
Learned extroversion mostly falls into Social Awareness and Relationship Management categories as it involves working with others and maintaining personal and professional relationships. However, working with others does require individual Self Awareness and Self Management.
Neuroticism = an individual who is more likely than average to be moody and to experience feelings such as anxiety, worry, fear, anger, frustration, envy, jealousy, guilt, a depressed mood, and loneliness.
These feelings are normally categorized as Negative Emotions.
Neuroticism HAS A VERY NEGATIVE effect on luck.
Recovering quickly after failure is very important in business – failure happens all the time. It is the successes that count.
Resilience building after experiencing a failure or negative experience will help a business owner to bounce back quickly and grow.
Openness = a person who enjoys trying new things.
Openness HAS A VERY POSITIVE effect on luck.
When you are open to new opportunities and willing to risk, you will be luckier in business.
Ramifications for Your Business
I have used the information I have shared with you in my own business and have seen my level of luck grow exponentially. I can’t guarantee how much luck you will actually receive – but I can guarantee that if you take the time to focus on balancing logic and emotion, YOUR LUCK WILL MOST CERTAINLY IMPROVE.