Luck + Risk

Did luck really have it?

When I landed the job as the Managing Director of Puma India at the age of 27, many people thought I was lucky. The same was hinted by a few friends when I got in to INSEAD. Several times in our lives we attribute our success to luck than to consistent effort. To get anywhere, a lot of small acts and feats need to sum up to an eventual outcome. In The Psychology of Money, Morgan Housel makes a point to state that luck and risk are two sides of the same coin. They both go hand in hand. I took a big gamble bowing out of a final round of McKinsey while graduating from INSEAD without even having cleared ANY rounds for Puma. But as "luck" would have it, I made it. I took, maybe, an even greater risk by not applying to ANY American MBA program, largely relying on INSEAD and LSE. And again as "luck" would have it, I got in to INSEAD.

A Long Shot

It is a widely known fact that Bill Gates had a lucky advantage to have gained access to a computer at the age of 10. Statistically it works out to be a 1 in a million chance. But as they often say, "what got you here will not get you there!" It is one thing to have a first mover advantage but it is altogether another to make something out of it. All students in the school that Bill went to had an equal opportunity to use the computer. Bill Gates went that extra mile to ensure he spent all his free time in the computer lab. He risked his future in order to pursue his dream of building a software company. When the Puma job description was floated in class by our Prof, it was an equal opportunity for all the Indian nationals in that cohort, but none of the others applied. I was the only candidate. Was I lucky or were the others risk averse? Most Indians come to INSEAD to get OUT of India and settle abroad, while I came to INSEAD to go BACK to India. Most engineers at INSEAD are attracted by the shine & glamour of the consulting world while I was clearly attracted by the title and the location of the job. The Puma job description read like, "minimum 35 years of age, 7 years + experience in the sports industry etc." Reading this, my Indian colleagues assumed it to be a no as they did not fit the criteria. For them it was a long shot.

Consistent Effort

Yes, I was lucky that no one else applied to the Puma job. But was I lucky to have passed 10 hours of gruelling interviews? Here is where I would like to offer my version of The Psychology of Hardwork. Luck and Hardwork are both directly proportional. The more hardwork you do, the more lucky you feel. Similarly most successful people attribute their success equally to luck and hardwork. You can be lucky to have been admitted to the best of the private schools, but to come out as valedictorian is only because you worked hard at it. You can be lucky to have the best tennis coach at your disposal, but if you win the grand slam, then it is only because you worked hard. Hardwork is making the same effort everyday without getting bored. Boring is good when it comes to becoming good at something. Give your children access to the best facilities for education and sports but teach them the importance of consistency. I spent two to three hours everyday for two whole weeks making a business plan for the Puma interview. They had not asked me for it but I knew that this was my only shot and I had to put my best foot forward. Martyn, who interviewed me and later became my boss, told me, "Rajiv, your business plan was rubbish when it came to numbers. And rightly so since you had no clue about the industry. But what impressed me was the effort and the thought process that you put in." Maybe that is what got me the second round interview. "There is a lot of good waiting for you on the other side of tired. Get yourself tired..." - Andre Agassi, OPEN

Appetite for Risk

Ever wondered about the phrase, "appetite for risk"? Is it something we can eat? Do we have to digest risk? Why do we call it an appetite? I believe that a person's nature decides his or her ability to take risks in life. And what might form the person's nature? The way you are brought up, the decade that you grew up in and the friends you kept. All of these will become part of your nature. When we brothers grew up, we both were given the same teachings, the same opportunities and we both chose risky career paths. My father in his life took bold decisions such as a love marriage, leaving a job at Wipro to start a business, leaving the flourishing business to start a stock broking firm and so on and so forth. We subconsciously imbibed some of his "boldness". For us, this was normal. My brother went to the USA for his high school on full scholarship and completely on his own merit. My parents let him. He chose to pursue philosophy and education as a major as against a typical engineer/doctor/lawyer routine for immigrant Indians. I went to France at the age of 16, for one whole year, as an exchange student. For both of us, these were normal decisions to make. I do remember a lot of close relatives and friends scaring our parents and advising them against sending us out of India at such young ages. But my father always swam against the tide. Without his appetite for risk, we would not have been lucky, to be where we are today. And we all know that risk and reward are both directly proportional too.

Failure

Morgan Housel wrote a letter to his son on his birth where he mentions, "But realize that not all success is due to hard work, and not all poverty is due to laziness. Keep this in mind when judging people, including yourself." What a beautiful thing to have said. Indians look down on failure. Right from school till you die people are judging you and your failures more than applauding your successes. A child repeating a class is shameful for the parents, a son not getting admitted to a school of his parents' choice; again shameful. A girl not getting married young enough or choosing a career over marriage; failure. A boy not getting promoted or getting laid off; failure. We are quick to attribute the failure to the inability of the person rather than anything else. I chose to get in to the restaurant business in 2012. I opened three restaurants in Bangalore with a partner. Very quickly we ran out of money and we had to shut them down. It was risky. It was lazy and there was no consistent effort. I knew that a bold step involved a greater magnitude of both success as well as failure. Despite that I did not follow through with consistent effort. I chose to let my partner and the employees manage it rather than "making the effort" of doing it myself. I let it take second priority over my family. There was definitely luck at the beginning when we got good malls deals, but without consistent effort, our luck ran out. Contrary to my story, there are several startups and businesses where the founders take the risks, put in their efforts and yet fail. That is ok. Not all failures are caused by mistakes. So next time you decide to take risks, make sure that you are prepared to fail and learn along the way. As Thomas Edison famously said, "I have not failed 10,000 times—I’ve successfully found 10,000 ways that will not work."

Luck = Long Term Optimism

If you feel that you are lucky, then over a long period of time you have believed that favorable outcomes will come along your way. This is optimism. While pessimism and optimism seem to be antonyms, they are slightly different. Pessimism involves taking swift action as there is a doom & gloom situation that is being thought of or predicted. While optimism is thinking that things will work out and hence not requiring immediate action. The world view in general is optimistic, no matter where you live. We all believe that our children will have a better world that we did. Even if we cannot see it now, we believe in it and have been working towards it. Why would we otherwise bother about the planet if not to leave it cleaner for our progeny? Why would you save and invest if not for their future and leave a nest egg for them? Why would you teach them the difference between the good and the bad if not to ensure that they all together are good? So next time you see someone getting worked up about the future, just tell them and it all works out in the end. If someone tells you that your success has to do with luck, remind yourself of those hours you spent away from your family. If someone blames you for your failure, remind yourself that to have tried and failed is far better than to have never tried. And if someone tells you that you are taking a risk, then remind them of every successful company's founder.