Return on Luck

Luck creates opportunities. Preparation converts them into results.

Do you believe in luck?

Most successful leaders will tell you that luck matters. Being in the right place at the right time can undoubtedly influence outcomes. But I’ve always been more interested in a different question, “What is your return on luck?”

Kodak didn’t run out of luck. They ran out of strategy. Elon Musk didn’t build the world’s first globally scalable electric vehicle business through luck alone. Timing certainly helped, but vision, persistence and execution mattered far more. Decades ago, BHP made the bold decision to drill for oil in Bass Strait despite widespread advice to the contrary. One courageous leadership decision changed the trajectory of the company for decades.

Now for a personal story.

Recently, my wife and I sold our house. We were delighted with the result. Yet when I reflected on why things went so well, I realised success came from two distinct sources.

First, we had a plan.

Six months before the sale, I created a detailed list of everything that needed attention. It was extensive. We worked methodically against a clear deadline. We engaged specialists for the major projects, tracked progress in a spreadsheet, monitored budgets, and maintained momentum.

In just three weeks, we completed the major improvements and launched the campaign. Then something interesting happened.

We went to auction two days before Easter. During the campaign, interest rates increased. Geopolitical tensions escalated as conflict broke out involving Iran. The market slowed noticeably.
Our sale didn’t.
Second, we built trust. We invested heavily in our relationship with our agent. We didn’t haggle over every small decision. We aligned on the objective, trusted their expertise, and gave them room to perform. That trust was repaid many times over. The agent leveraged their network, identified two highly motivated buyers with cash available, and managed the process brilliantly.

Of course, there was luck involved.

Every open house seemed to coincide with perfect weather. The wind disappeared. The sun shone. The right buyers appeared at the right time, both able to move quickly without relying on bank approvals.

But here’s the key insight. Luck created opportunities. Preparation converted them into results.

Without the plan, the improvements wouldn’t have been completed. Without disciplined execution, the property wouldn’t have presented as well. Without trust, the agent wouldn’t have been able to maximise the opportunity.

The luck was real. But our ability to capture value was determined long before it arrived.

Jim Collins and Morten Hansen describe this idea as “Return on Luck” in their book Great by Choice. Their research found that exceptional organisations are not necessarily luckier than their competitors. They are simply better at extracting value from both good luck and bad luck when it occurs.

That idea resonates strongly with me.

In business, we often spend too much time hoping for favourable conditions and not enough time preparing for them. So, here’s a question worth considering “What does your plan look like?”. Is it robust? Has it been tested for rigour? Does it focus on the few things that will genuinely move the needle?

And most importantly, when luck eventually shows up, will you be ready to maximise the return?

At Stoke Consulting, we help businesses improve their return on luck. Not by hoping for better opportunities, but by building the strategy, capability and execution needed to make the most of them when they arrive.

The sailboat analogy, everyone may experience the same wind (luck), but some sailors use it more effectively and travel further.

If your organisation is ready to improve their return on luck contact the team at Stoke Consulting today.