The Paradox of Skill and Luck
How do we know which of our successes and failures can be attributed to either skill or luck? That is the question that investment strategist Michael J. Mauboussin explores in his book The Success Equation: Untangling Skill and Luck in Business, Sports, and Investing. In a recent Wharton School interview, Mauboussin made some interesting observations:
“The Paradox of Skill and Luck says that in activities where skill and luck define outcomes, as skill improves, luck becomes more important in determining outcomes. More skill means more luck. [This comes] from Stephen Jay Gould, the very eminent biologist at Harvard. To say it differently, not all skilled [athletes] have streaks, but all streaks are held by skillful players. You can almost be assured that whenever you see really, really good results, it’s skill and luck combined.”
Mauboussin’s observations are key to understanding – and becoming – effective leaders and managers. It is more than the ‘things that you do’, it is in fact, where you come from (context) about what you do (content). Skill is developed either quickly (through intense effort) or over time. But how many managers have we met in our lives who have competence but have not been able to apply it? Too many.
It is the context – ground of being, approach, perspective, field – out of which the content – actions, logistics, etc – is created. The context defines and determines the result. Mauboussin identifies that there is both good and bad luck, and that people (or organizations or teams), no matter the level of competence, can attract either one. So the game plan for creating “luck” is to: 1) uncover your current context (tell the truth about where you are and how it is working), and 2) develop/create the intention for a new context. Easy to say, sometimes more difficult to accomplish.
What is your experience with luck? Has it “just happened” in your life or does it follow focus, intention and personal clarity?