Catch Your Lucky Star
Good fortune is derided and underrated, but make a few tweaks, and you may find yourself the beneficiary of its oft-outsized blessings.
LET’S GET THIS out of the way: Much of your success in business is down to luck. Yes, it’s a little unpalatable but it’s true. And the more successful you’ve been, the luckier you’ve been. Wait! Don’t toss this month’s issue of Global Cannabis Times aside… at least not yet.
This success-luck feedack loop required some preconditions—you also happen to be skilled at what you do, and likely very hard-working.
The Nobel Prize-winning behavioral economist Daniel Kahneman sums up this secret to professional success in what he has called his favorite formula:
Success = talent + luck
Great success = a little more talent + a lot of luck
The work of Kahneman, best known for his studies into cognitive biases, backs up other research that shows we humans drastically undervalue the influence of luck in many situations, and overvalue it in others. It has to do with something psychologists refer to as the locus of control, or how much you think you control the events happening around you. Most people have an internal locus when it comes to good things. They take credit for their success. But an external locus often takes over when things go wrong. This is not just a robust ego at work. It’s also down to the “availability heuristic,” the bias whereby we attach more significance to things that are easier to call to mind.
It’s not hard to recall the countless times when you put in the effort to succeed: slogging through 14-hour days during the holiday season, preparing reams of documents for loan interviews, the drama of managing an unruly staff. By contrast, it’s genuinely difficult to perceive the ways you may have been fortunate—perhaps you opened or expanded your business at a time of historically low interest rates, benefited from a windfall, or simply were born with advantages or privilege that most people lack.
In truth, we control much less than we like to believe.
IT’S (ALMOST) ALL
DOWN TO LUCK
When it comes to CEOs of big corporations, one Harvard Business School study1 found their impact on company success ranges from just 2 to 22 percent, depending on the industry. Another study2 from the Frankfurt School put the figure at between 4 and 5 percent. The impact of owners or managers of small businesses is significantly higher, but success still tends to be distributed randomly. Indeed, studies3 have even shown zero correlation between the factors traditionally attributed to professional success—skill, intelligence, risk and hard work—and the degree of success by owners. In other words, a business owner who ranks higher in those attributes should, in theory, do better by a consistent degree than someone who scores lower—but no such correlation can be detected.
Even setting such studies aside, it doesn’t take much to notice that conventional success isn’t achieved solely through hard work and talent. If so, why do white men hold more than 90 percent of the C-level positions in corporate America?
There are reasons most business owners and managers don’t usually want to talk about the role of luck in their success. It’s not just that it takes some of the shine off their accomplishments, but because in the purest, blindest sense, luck is random and thus boring. If it’s out of your control, why bother? If you’re in the United States, such contemplation is also un-American! This is the country where your birth and circumstances aren’t supposed to matter. Ingenuity, optimism and grit are what count! The “Land of Opportunity” will take care of the rest. (And finally, if success were down to luck, shouldn’t the rich pay more tax? Most of the better-off would rather not get into that debate.)
LUCK YOU CAN
To be sure, there is a certain type of luck—dumb luck, winning-the-lottery luck—that is not worth giving much thought to. But the other kinds—the luck you provoke, the fortunes and misfortunes you prepare for, the luck that can be tapped through an understanding of probability, the luck that comes from hard work or your serendipitous networking—that is luck that when fostered, can give your business a huge boost.
“There’s no question that luck plays a big part in life and for anybody who has any degree of success. If a successful person tells you there was not a bit of luck involved, I don’t think they’re being truthful,” says Matt Darin, CEO of New York, NY-based Curaleaf.
But Darin also believes in a different kind of luck that we can control. Or at least attempt to tap into. The way he characterizes this kind of luck is similar to how Wayne Gretzky famously described scoring in ice hockey: “You miss 100 percent of the shots you don’t take.”
“Can we make our own luck? Yes. Luck doesn’t happen by accident. Luck happens by taking risks, by being curious, by putting yourself out there, by getting into uncomfortable situations at times,” Darin says.
Indeed, Nassim Nicholas Taleb argues in his best-selling book, The Black Swan, that luck is the key force at the heart of our economic system, as the biggest rewards tend come from the deepest unpredictability. The reason free markets work, he asserts, is because they allow people to be lucky, thanks to aggressive trial and error, not by giving rewards or “incentives” for skill. When it comes to business, luck is almost like an evolutionary power rewarding random adaptiveness.
It is this disconnect between skill and luck that is sometimes the hardest to understand. Counterintuitively, the more competitive and skilled the players are in a marketplace, the more luck factors into success and failure.Advertisement
KNOWING WHEN SKILL
ENDS AND LUCK BEGINS
Billy Beane, the central character in Michael Lewis’ book Moneyball, the tale of the improbable winning run of the cash-strapped Oakland A’s in the early 2000s, makes a surprising point as his undervalued baseball team is about to embark on a playoff run. Beane predicts that his analytical prowess—which lets him leverage arbitrage opportunities to acquire players with value that other clubs don’t appreciate—won’t work in the playoffs.
His team’s success will now come down to luck, he tells Lewis. When the two best teams in the league face off in one game, the difference in skill is often marginal and alone will not guarantee the final score. If the ability of two lineups is roughly equal, the slightly better of the two lineups will usually prevail over a long, 162-game season. But in a short playoff series of five or seven games maximum, luck suddenly plays a much bigger role.
The immense power of luck in extremely competitive endeavors explains why so few top-flight professional sports teams repeat as champs. It’s why last year’s top hedge fund managers frequently underperform the following year and why businesses rise and fall.
Consider the 50 companies featured in three of the most popular business bestsellers of the past 40 years: In Search Of Excellence, Good to Great and the unfortunately named Built to Last. Of the 50, 16 failed within five years after the books in which they were featured were published. And 23 more became mediocre as they underperformed the S&P 500 Index. It wasn’t because their managers or workers stopped trying or innovating. It was because things even out. If you get an extreme result in one period, the next result will probably drift back toward the average. Statisticians call it regression to mean. Normal people might just say their luck ran out.
All this is not to imply that you are helpless before fate or that you should bet the coming month’s payroll on the roulette table the next time you’re in Vegas for a trade show. There is still much in life you do control.
Luck, while it can’t be tamed, can be influenced. Among people who study variance, chance and fortune—a surprisingly eclectic lot that includes psychologists, poker players, stock market quants, modern Stoics and Buddhist monks—there is a common view that luck is neither bad nor good nor personal. Without us to supply meaning, it’s simply “noise.” It’s how we deal with luck that matters. Indeed, it is managing this interplay between chance and skill that makes life so interesting.
In the following pages, we provide some ideas shared by your fellow cannabis professionals, experts in this field and from our own reading, on how to improve your odds in the face of such uncertainty. Good luck and godspeed.
1. BE ON THE
1 It starts with observation. “You’re not lucky because more good things are actually happening; you’re lucky because you’re alert to them when they do,” psychology writer Maria Konnikova writes in The Biggest Bluff: How I Learned To Pay Attention, Master Myself, And Win. “If we want to be successful, we need to train our powers of observation, to cultivate that attitude of mind towards being constantly on the lookout for the unexpected and to make a habit of examining every clue that chance presents.” Most people are simply not open to what’s around them. And no wonder—we live in an age of constant distraction and never-ending connectivity to algorithm-honed media designed to keep us in our lanes.
2. KEEP AN OPEN MIND…
AND RELAX A LITTLE
Part of the challenge is that good-luck events often reveal themselves in ambiguous, trivial ways. This can make them hard to detect. As the saying goes, “Actual great opportunities do not have, ‘Great Opportunity!’ in the subject line.” As a result, luck tends to favor the curious. “This is one of the most counterintuitive ideas,” says Richard Wiseman, a psychology professor at the University of Hertfordshire in the UK, and author of The Luck Factor. “We are traditionally taught to be really focused, to be really driven, to try really hard at tasks. But in the real world, you’ve got opportunities all around you. And if you’re driven in one direction, you’re not going to spot the others. Unlucky people go to parties intent on finding their perfect partner and so miss opportunities to make good friends. They look through newspapers determined to find certain type of job advertisements and as a result miss other types of jobs. Lucky people are more relaxed and open, and therefore see the range of what is there rather than just what they are looking for.”
3. PREPARE, PREPARE,
PREPARE SOME MORE
Derek Besenius of LabCanna in Nashville, TN says one of his lifelong sayings is, “Better lucky than good.” But he says it’s more of a mindset for being ready for luck than a dependence on random chance. “Luck is often described as when preparation meets opportunity. There is no other industry where this is more apt. With the variety of applications and industries that cannabis has the power to disrupt, it has been my mission as a leader to ensure that our team is prepared for all scenarios,” he says. “From entering new business verticals, adapting our educational marketing messages, or pivoting due to regulatory shifts—being prepared for these factors allows us to capture greater opportunities whenever they arise.” Preparation is the job of the LabCanna team, Besenius says. The opportunities that present themselves “are the luck portion.”
4. HIT THE BOOKS
4 Entrepreneurially lucky people regularly question norms and seek continuous improvements in their business and in themselves, says Anthony Tjan, author of Heart, Smarts, Guts, And Luck. “They read new things, try new experiences and are open-minded to a variety of relationships because they are curious. All of these things increase the probability for circumstantial luck… You will simply see more—and therefore increase your chances of finding luck—if you adopt the mindset that ‘there is always more to see and more to learn’.”
5. DON’T BE TOO
QUICK TO JUDGE
5 To be lucky, you want to change your relationship with ideas, says Stanford Engineering School professor Tina Seelig. “Most people look at new ideas that come their way and they judge them, ‘That’s a great idea’ or ‘That’s a terrible idea’. But it’s actually much more nuanced. Ideas are neither good nor bad. And in fact, the seeds of terrible ideas are often something truly remarkable,” she says in her widely viewed TED talk on luck. “You look around at the companies that are really innovative, the ones that we now take for granted, that have changed our life—well, you know what? They all started out as crazy ideas, ideas that when pitched to other people, most people said, ‘That’s crazy, it will never work’.”
6. SQUEEZE THOSE LEMONS
6 According to Wiseman, lucky people are certain that the future will be bright. Over time, that expectation becomes a self-fulfilling prophecy because it helps them persist in the face of failure and positively shapes their interactions with other people. When things go awry, they “turn bad luck into good” by seeing how they can squeeze some benefit from the misfortune. Asked how they’d react to being shot in the arm, according to Wiseman, they might reply, “Well, I’d be relieved I wasn’t shot in the head.” Psychologists refer to this ability to imagine what might have happened, rather than what actually did happen, as “counter-factual.” In doing this, such people feel better about themselves and their lives. This, in turn, helps keep their expectations about the future high, and increases the likelihood of them continuing to live a “lucky life.”Advertisement
7. THINK OF YOURSELF
AS AN ‘ALMOST-VICTOR’
7 When bad luck strikes, Konnikova recommends thinking of yourself as an “almost-victor” who thought correctly and did everything possible in terms of the things you could control. “No matter: you will have other opportunities, and if you keep thinking correctly, eventually it will even out. These are the seeds of resilience, of being able to overcome the bad beats that you can’t avoid and mentally position yourself to be prepared for the next time,” she writes in The Big Bluff. “People share things with you: if you’ve lost your job, your social network thinks of you when new jobs come up; if you’re recently divorced or separated or bereaved, and someone single who may be a good match pops up, you’re top of mind. This attitude is what I think of as a luck amplifier.”
8. WORK ALL
8 “Luck is a big part of success but the legal cannabis industry is also a game of 3D chess with many moving parts,” says Ali Jamalian, co-founder of San Francisco, CA-based cannabis manufacturer Sunset Connect. Jamalian advises cannabis startups to really understand just how complex the market they’ve entered is. “I do believe it requires a very sophisticated entrepreneur with the skills to navigate an ambiguous regulatory landscape where predatory practices abound, all while battling the implications of 280E, lack of banking and the immense upfront capital needed to get across the permitting finish line, and that’s just the start. Now you have to build a successful company in an extremely competitive market. Luck plays a big role, but not nearly as big of a role as the skill set of the leaders and teams in a company.”
9. DON’T WALLOW
9 Seeing yourself as a victim can be a luck-dampener, says Konnikova: “Because you’re wallowing in your misfortune, you fail to see the things you could be doing to overcome it. Opportunities pass you by, people get tired of hearing you complain,” she says. To be sure, perspective-shifting tricks won’t solve all your issues if you’ve really had bad luck. But they can provide breathing space, a little room to maneuver—and some days that’s all you need.
10. VIEW LIFE AS A FLOW OF LUCKY EVENTS
10 “It helps to view life as a river in which lucky events—good and bad—will flow your way. It’s neither good nor bad. It just is,” writes Great by Choice co-author Morten T. Hansen in a blog on the Harvard Business Review website. “When you start having this ‘luck flow’ mindset, you can start managing those events to your advantage, but only then.” This view recalls the Stoic approach to life that has been popularized in recent years: It’s not the events that happen in life, it’s our reaction to them that matters.
11. BE PREPARED
TO ACT ON LUCK
11 One of the most oft-cited quotes about luck comes from Louis Pasteur: “Chance favors the prepared mind.” The actual statement was a little different: “Where observation is concerned, chance favors only the prepared mind.” It’s not enough just to spot a good-luck event; you need to be prepared to alter your plans to act on it. When faced with a luck opportunity, Hansen recommends doing what a lot of the best decision-makers do: apply the “zoom out, then zoom in” principle. When confronted with a luck event, small or large, take a moment to zoom out (“What are we really trying to accomplish here?”), then zoom in (“Are we getting the details right?”). Similarly, prudent leaders prepare for that unexpected event that comes out of nowhere (like a global pandemic, perhaps). Prepare for bad luck events by incorporating safety margins (take an earlier flight to that trade show; add two extra days to your next deadline), acquire options (line up that backup supplier), and invest in a strong network of people who will help when things go bad.Advertisement
12. CARE CREATES LUCK
12 A commitment to quality is the foundation on which good results are built, says Dr. Hervé Damas of Dr. Damas Wellness in Miami, FL. “Winning practices start with a focus on quality. We make sure that everything we have is organic and single-sourced. Then we focus on education. We spend a lot of time making sure our small team is well-versed on our products. This allows us to take time with each customer to educate them and make them comfortable. As for luck, we’ve been lucky to connect with so many great people who provide the inspiration, opportunity and meaningful feedback that allow us to grow toward the light.”
13. RISK IT… FORTUNE
FAVORS THE BRAVE
13 “You gotta be in it to win it” is a better example of great advertising than applied math, but it is accurate: even winning the lottery—the ultimate example of dumb luck—requires you to go out and buy a ticket, or at least open your phone. Taking action releases energy and luck typically requires a catalyst and taking at least a small risk. As the salesperson’s creed goes, every time you don’t ask, the answer is no. Good luck also has a multiplier effect. Opportunities lead to opportunities. Says Curaleaf CEO Matt Darin: “I coach the younger people that I work with that if you want good things to happen, you’ve got to create your own luck. Sometimes good things occur by happenstance, but more often than not they happen because you’ve taken an action that puts you in a position to be able to take advantage of the lucky break.”
14. PICK LUCK OR
14 Echoing Billy Beane, Michael Mauboussin writes in The Success Equation that the closest you can come to making your own luck is to work in a field where the variation in skills remains wide—which, by and large, means new industries like cannabis rather than established ones. Keep in mind that wherever luck is powerful, short-term outcomes will be poor indicators of whether you’re on the right track. Ventures involving lots of creative variance are by their nature riskier. Taleb argues that $1 million earned as a dentist is not the same as $1 million earned as a rock star because success as an artist depends much more on chance. If you imagine a game of “career roulette,” you end up a starving artist 99 times for every time you end up a rock star. If you want to minimize the chance of bad luck, he says, be a dentist.
15. PROVOKE LUCK
15 The core strategy of anyone looking to enhance their luck is to expose yourself to as much randomness and “good uncertainty” as you can. Break your daily routine, take a different route to work, go to a party with a goal of only talking to people wearing red. “This type of behavior will actually increase the amount of chance opportunities in people’s lives,” says Wiseman. “It’s easy for people to exhaust the opportunities in their life. Keep on talking to the same people in the same way. Keep going to the same places on vacation. But new or even random experiences introduce the potential for new opportunities.”
16. CLOSE THE LOOP
16 Showing gratitude in particular has a close relationship with luck, says Stanford’s Seelig, an understanding she has instituted into a daily practice. “At the end of every single day, I look at my calendar and I review all the people I met with, and I send thank-you notes to every single person. It only takes a few minutes, but at the end of every day, I feel incredibly grateful and appreciative, and I promise you it has increased my luck. You need to understand that everyone who helps you on your journey is playing a huge role in getting you to your goals. And if you don’t show appreciation, not only are you not closing the loop, but you’re missing an opportunity.”
17. BUILD A LUCKY NETWORK
17 Studies show that the people who can help you the most in business often aren’t those closest to you—they are the secondary contacts, the friend of a friend, the associate of a key client, or some other person who you know only tangentially. Indeed, continuously building a network is the best luck to be had, says Andrés Correa, owner of Plant Spirits in Envigado, Colombia. “These are the people that help us grow our projects,” he says. The reason is two-fold—a secondary contact has nothing much invested in recommending you to someone else (the old saw about not letting business and friends mix) and because this person is not from your inner circle, they expose you to a wider network based on interests or connections you don’t have. Your hairdresser’s son, for example, may just be the person to build your website. Tjan says the best way to practice what he calls “serendipitous networking” is to be open and authentically interested in people. “A ‘Lucky Network’ is not something that is premeditated. It is not a targeted list of must-have relationships, but rather it is a set of relationships built out of curiosity and friendship that somehow ends up encompassing people who turn out to be pivotal. In our research, 86 percent of the luck-dominant credit a key part of their success to an ‘openness to new things and people’,” he writes in an HBR blog.
18. LEARN FROM BAD
AND GOOD LUCK
18 In nearly all luck events, there are elements you did control, ways you reacted that could have been handled differently, things you can learn to do better next time. If you keep making the same mistakes, that’s not bad luck—it’s a failure to learn. Conversely, when things are going well, it’s a good idea to test whether your success is entirely the result of wise decision-making or due in some part to good fortune. “One of the things about good luck if you’re not careful is that it can go to your head,” says Konnikova. “Because when you’re winning, it’s just too easy to not stop and analyze your process. Why bother if things are going well? When it comes to learning, triumph is the real foe; it’s disaster that’s your teacher. It’s disaster that brings objectivity. It’s disaster that’s the antidote to the greatest of delusions, overconfidence,” she writes, paraphrasing Rudyard Kipling. The most dangerous situations are where people believe they have attained a certain control over luck, she says, citing studies of investors. “The more people overestimate their own skill relative to luck, the less they learn from what the environment is telling them, and the worse their decisions become. After a good streak, participants grew increasingly less likely to switch to winning stocks, instead doubling down on losers.”
19. BUT LUCK IS
NOT A STRATEGY!
19 Last lesson: Luck and hope have a complicated relationship. As a business strategy, you never want to rely on good fortune. Lady Luck is capricious at the best of times. Having said that, it’s actually good for your salespeople, especially the younger ones to believe in luck—not dumb luck, but the kind that comes from getting out there and provoking it. “The greater a salesperson’s belief that success is a combination of luck and effort—and that good luck will come along sooner or later—the greater his or her sales activities, such as making phone calls, meeting prospects, qualifying prospects, and gathering intelligence about prospects and competitors. And ultimately the higher their performance,” writes marketing professor Joel LeBon in a Harvard Business Review article. LeBon says the salespeople he has studied attributed 60 percent of their sales to luck. They need to believe good fortune is right around the corner… and so do you.
Cannaconvo with Peter Su of Green Check Verified
Cannabis Last Week with Jon Purow interviews Peter Su of Green Check Verified. Peter Su is a Senior Vice President with Green Check Verified, the top cannabis banking compliance software/consultancy in the space. A 20+ year veteran of the banking industry, Peter serves on the Banking & Financial Services committee of the National Cannabis Industry Association. He chairs the Banking and Financial Services Committee for the NYCCIA & HVCIA. He is an official member of the Rolling Stone Cannabis Culture Council. And, he is on the board of the Asian Cannabis Roundtable, serving as treasurer.
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