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Maximizing Your Return on Luck: The Key Strategic Insight www.gazelles.com Maximizing Your Return on Luck: The Key Strategic Insight Hunkering down in year-end strategic planning sessions, you and your team are probably thinking hard about what’s next for the economy and how that will affect your business. In the process, stay laser focused on maximizing what Jim Collins, in his book Great by Choice, calls your “return on luck” (ROL) – what I consider one of the most important business concepts ever articulated and critical to maximizing your return on investment (ROI). As Collins points out, great companies don’t have better luck than other companies. Sometimes, they get a bum deal. After all, they’re subject to the same economic forces as any other companies competing within the same regions. No matter what the economy does, they will find opportunity in it. But what differentiates the great companies is their attention to maximizing their return on luck. They look for opportunities in whatever hand they’ve been dealt – and then find ways to grow from the situation exponentially. ALWAYS OPPORTUNITY This point often comes into my mind when I am talking with growth-company CEOs. The standouts among them – the folks I consider the next Steve Jobs or Michael Dell – don’t view their Copyright © 2012 Verne Harnish. All Rights Reserved. vharnish@gazelles.com. 2
Maximizing Your Return on Luck: The Key Strategic Insight www.gazelles.com companies as victims of economic uncertainty or market forces. No matter what the economy does, they will find opportunity in it. They think like one of my mentors, who made a fortune in commercial real estate. He invested in an empty, commercial high-rise in Houston during the depths of a severe recession – and turned it into a thriving storage facility at a time when no one could find ways to rent out commercial properties in that market. That smart move enabled him to ride out the recession and, once it was over, make a bundle when he sold the building. When you’re thinking about your goals for 2013, it’s important to take a look back at your luck in 2012. Rapid changes in the global economy can shake up your company’s current situation at any time, so we all need to be prepared to maximize our return on whatever lucky, and unlucky, breaks we face. Once you and your entire leadership team start consciously thinking about doing so, every day, you will be surprised by how much power you can unleash by simply asking this question. MAXIMIZE ROL Your year-end strategic planning sessions are an ideal place to do this. When you’re thinking about your goals for 2013, it’s important to take a look back at your luck in 2012. Ask yourself and your team: Where did we maximize our return on luck And where did we fail to do this This will give you some ideas on what to continue doing – and lead you to untapped opportunities to act upon. Then look at the situations you’re facing currently. Where are you experiencing good luck – and bad luck How can you make the most of your current fate, and turn the situation to your advantage By incorporating your ideas into your plans for the year, you will find it easier to execute them rapidly. Copyright © 2012 Verne Harnish. All Rights Reserved. vharnish@gazelles.com. 3
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