Feeling Lucky? How Rhythm Can Help Maximize Your Return on Luck
For their book Great By Choice, Jim Collins and Morten T. Hansen did some very interesting research on the impact that luck has on making some companies stand out above the rest. They discovered that the great companies in their study did not have more good luck or less bad luck than their competition. Leaders of great companies can’t control luck any more than the rest of us. What separated the great companies was how their leaders responded to the luck event. Leaders of the great companies were able to recognize the luck event (whether it was good luck or bad luck) and seize the opportunity to get a high return on luck at the pivotal moment so that their companies reap the benefits for years to come.
Rhythm’s Think Plan Do® framework fits perfectly with Collins’ recommendation to “zoom out” to evaluate the landscape for changing conditions or luck events that could cause a disruption to your business and then “zoom in” to “focus on supreme execution" of priorities to eventually achieve your BHAG.
Here’s how Rhythm can help you manage luck so you get the biggest return:
• Think Rhythm: Collins recommends “zooming out” to recognize luck events when they happen. Getting into a rhythm of thinking about your business strategies will give you the discipline to pick your head up on a regular basis and think about what’s happening in the marketplace and in the world that could potentially impact your business. Collins also stresses the importance of developing the wisdom to know when to let luck disrupt your plans and when to stay the course. Having this time to think carved out in your weekly schedule and setting aside time every quarter to think with your team about opportunities and threats will help you to recognize patterns and develop the muscle you need to exercise to know when it is time to adjust your strategy.
• Plan Rhythm: Collins also stresses the importance of preparing in advance to survive bad luck when it happens. According to Collins, great leaders are hypersensitive to changing conditions and continuously asking “What if…” While they can’t see the future, they do know that something bad will likely happen at some point, so they prepare by having a financial buffer and taking fewer risks that could potentially damage their company. Collins calls this kind of leadership “productive paranoia” and explains that it is critical to zoom out to identify potential bad luck events, determine the time frame in which they could cause risk to your company, and plan for the new conditions appropriately. Having your team in a quarterly planning rhythm of stepping out of the day to day operations of the company for two days a quarter to look at the landscape, note any changing conditions, and make needed adjustments to your strategy could potentially save you from disaster.
• Do Rhythm: Finally, Collins states that you have to execute the plan to create positive return on luck with discipline and focus. This is exactly what your Rhythm dashboards can help you achieve. Once you determine the plan and speed with which to respond to the luck event, Rhythm can help you communicate the plan to your organization and drive alignment to ensure that everyone is working on the right things to accomplish your plan. Your weekly adjustment meetings give you the opportunity to evaluate every week how the team is executing and whether you are seeing the results you thought you would from your strategy. You have the opportunity to make adjustments based on the data every week so that you aren’t stuck with a strategy that isn’t working until your next planning session.
Collins gives examples of companies that have had extraordinarily lucky events that should have propelled them forward, but since they lacked disciplined and precise execution they were not able to capitalize on the luck events leaving them stuck in mediocrity. The flip side is true as well; he cites companies that have had exceptionally bad luck that were able to take that event and use it to become a great company. So, get your team on a Think Plan Do rhythm to recognize luck events and changing conditions, plan for them, and make weekly adjustments to execute plans with precision. This way, you can get the maximum return on luck and be well on your way to becoming a great company.