Beating the Odds
by Phil Liebman
Here’s news - ripped straight from the headlines: Apple’s CEO Tim Cook was distinguished top among the world’s greatest leaders by Fortune Magazine. He is one of my newest heroes! ( I strongly suggest you read the article http://fortune.com/2015/03/26/tim-cook/)
Not a bad way to fill Steve Job’s shoes - especially in the face of the enormous expectations that were laid before him. So if the announcement appears on the front page of one of the most widely respected and read business publications - you may rightfully wonder, “What’s the secret?” that qualifies this to appear in Mikki-Leaks?
I’ve been told that the influence of leadership on any organization - either good or bad - may have a net impact of perhaps 15% of the total performance. Now 15% is nothing to sneeze at - but it also doesn't account for the ongoing and seemingly unstoppable performance of Apple. From a philosophical (Phil-O’Sophical - as some of my friends, Vistage members and clients will remind me) perspective - it isn’t the percentage or the odds that matters - it’s whether you win or lose in the end that counts. One in a million are nice odds - if you happen to be that one. Not so much if you are swimming with the rest. The secret is being prepared to step into that position if it should happen to present itself as available to you.
Clearly - Tim Cook seems to be entirely prepared for most anything that comes his way. Still, he might be the luckiest man on earth. And if he is, chances are he's earned that. Being prepared is a combination of being competent and being conscientious and driven with a clear and palpable sense of purpose.
Chance plays an enormous role in our success. In fact, profit is almost inextricably linked to risk. It’s a basic theory of investment strategy: the direct correlation of risk to reward. The lower the risk one is willing to take the lower the rewards you would expect. Safe bets are either a table set for small returns on your investments or are rigged to direct a big payoff by design. Large risks can yield huge rewards simply because of the increased odds that you will lose. Smart investors seem to know this and dumb gamblers never learn this. But as a CEO or any business leader it is vital that you understand that perhaps your single most important job is to manage the risk against the potential of the yield you are aiming (not hoping) for. Remember the old adage that “hope is not a strategy”? Ao hoping for a return on investment is not a sufficient means to managing the inherent risks of running a business, where you place all your assets at risk every day you engage, or even prepare to engage your enterprise with the market. Your real capital, human capital and reputation capital are all exposed to risk that you cannot control. And the things you seemingly can control and choose to risk in pursuit of whatever vision you have for the potential, are the future you design for your organization. Tim Cook does a phenomenal job of this at Apple. You would do well to do an exemplary job of this at your company too.
I tend to define the term “entrepreneur” differently from most people. I don’t choose to accept the view that it has anything to do with the age or size of a company, or whether it is breaking molds, disrupting markets or changing the world. Those may be the results of the idealism that is wrapped up in entrepreneurialism but not the basic foundation. I believe that an entrepreneur is simply someone who chooses to take extraordinary risk in pursuit of unreasonable expectations of returns.
Now, by definition, start-ups place everything they invest at risk. The raw numbers provide clear evidence of the overwhelming risk of failure in virtually any business one starts. I also believe that most actually fail because the founder simply doesn’t understand the dynamics of this risk, and approaches the daunting odds entirely unprepared to manage them at all. Or they fail because they play not to lose. By attempting to avoid risks they don't get the lift of the returns that would get their capital restored and make growth possible. When they do succeed it is often simply by accident.
My goal is to help people become deliberate in their pursuit of success, and take those who have beat the odds on The Journey from Accidental Success.
We can all learn from Mr. Cook, in the enormous risks he has embraced, and the intelligent ways he has then taken to managing them.
Now, here’s my parting shot: Can you beat the odds? And is this even politically correct? Or these days are we supposed to reason with them? Talk them down? Or somehow rehabilitate them? Be careful. You don’t want people pointing at you and whispering to their friends, colleagues or family, “That person over there is an unrepentant odds beater.”
Like they say about the lottery: “Hey, you never know.”
Phil Liebman is the CEO, Founder and Chief Leadership Catalyst at The BullFrog Group, where he has the privilege to work with heroic leaders to help create a world that is made better through the efforts of the men and women who lead and run successful businesses. He is also a freelance writer, speaker, Vistage Chair and a Fellow at the Thayer Institute for Leadership Virtuosity.