More luck than judgment - FT.com Lucky break: just as winning a game of chance relies on good fortune, many successful products are the result of events beyond any one person's control I am a great believer in luck," wrote Thomas Jefferson, "and I find that the harder I work, the more I have of it." Most business leaders will tell you that hard work and skill, rather than chance, are the keys to success. Luck does exist but it is something that must be mastered and controlled. "For the most part, I think you create your own luck in business," says John Cridland, director-general of the CBI, the UK employers" federation. In his book On Leadership, Allan Leighton, former Royal Mail chairman and chief executive of Asda, focuses on characteristics such as skill, determination, intuition and hard work as essential to success - with luck playing only a minor role. He quotes electronics retail entrepreneur Julian Richer as saying that "luck is taking advantage of opportunities." All this fits in well with our standard view of entrepreneurs and business leaders. They are at the centre of what happens. If they take purposeful action, and if they have the right skills and drive and the right team around them, success will follow. This concept can be traced back to the Enlightenment philosopher Immanuel Kant, who dismissed the role of luck in success. He argued that success is dependent on the morality and willpower of the agent, and that neither of these is affected by luck. We are in control; we make our own luck. Others question whether this is true. Long before Kant, Aristotle pointed out that our ability to do certain things depends in part on background factors, such as family life and education, over which we have no control. Accidental invention: the Post-it note The familiar Post-it note was the result of not one but several accidental incidents. The first was in 1968, when Spencer Silver, a research chemist at 3M, tried to develop a very strong adhesive. In fact, the result was a weak, reusable adhesive that held papers together but also let them be pulled apart. Mr Silver thought it might have commercial applications, but five years of lobbying his colleagues produced no response. Then, in 1973, his colleague Art Fry saw a demonstration and thought it could be used for bookmarks. Mr Fry is said to have tried the idea out on a hymn book at his local church. Even some small details were due to accident. The first Post-its were yellow because the development team used scrap paper to keep costs down, and yellow was the most common colour available. Was the Post-it's global success down to chance, or to skill? The expertise of Mr Silver, Mr Fry and colleagues - and the support they received at 3M, where innovation was rewarded - played a big role. Yet without Mr Silver's experiment-gone-wrong, and Fry's chance discovery of it, none of this would have happened. Jonathan Gosling of the Centre for Leadership Studies at the University of Exeter argues that this is still true. He notes how many successful entrepreneurs come from family backgrounds affected by tragedy. "Losing a parent at a young age is hardly good luck, but many entrepreneurs say their later business success is due to the self-reliance they learnt as a result," he says. "Luck plays a part in success of all kinds," says Prof Gosling. Staying on top takes luck as well as skill. But we often mistake one for the other. The economist Daniel Kahneman has noted that we often describe people as skilful - and, in business, re­ward them accordingly - whereas they have in fact been merely fortunate. In Thinking, Fast and Slow , Prof Kahneman argues that we need to get better at distinguishing expertise from luck, and to ack­nowledge the role the latter plays in business as well as in life. Should we be challenging the notion that we make our own luck? Ed Smith, the former England cricketer who has written widely on the role of luck in sport, including his book Luck: What it Means and Why it Matters , believes so. "Since luck consists of that which is beyond our control," he says, "making your own luck is an oxymoron. If you are making it, it is not exactly "luck," it is something else. It might mean putting yourself in the way of serendipity, but that is not exactly luck. R. Gopalakrishnan, executive director of Tata Sons, thinks part of the problem lies in the fact that we treat luck as a single phenomenon. He says there are, in fact, three kinds. First, there is what he calls "earned luck," which comes from preparation and flexibility - "all the good that comes from hard work and being alert." An athlete who puts in long hours of training and finally makes it to the final of a major sporting event is the recipient of earned luck. Then comes "unearned luck" - pure chance events that come out of the blue. The same athlete who wins the top prize when his main opponent is forced to withdraw because of injury is the recipient of unearned luck. Finally, says Mr Gopalakrishnan, there is a third "hybrid" category that consists of unexpected events that, thanks to our training and preparation, we are able to recognise, seize and take advantage of. It is here that there are striking examples of businesses that have seized on lucky chances and turned them into competitive advantage. Mr Cridland points to the development of Post-it notes (see panel) as an example of how serendipity can lead to great things. Mr Smith talks of the Ecofisk oilfield, discovered almost by accident after Phillips Petroleum had abandoned hope of finding oil and given orders to shut down the operation. Engineers on site went ahead with one last drill anyway - and struck oil. But do such game-changing discoveries come about because people are making their own luck, or is something more subtle happening? The 16th-century diplomat Niccolò Machiavelli argued in The Prince that luck, or fortuna, was impossible to control. However, fortuna sometimes offered opportunities to those who were clever and alert enough to spot them, and flexible enough to move quickly in response. This is not making your own luck; rather, it is spotting the chances offered by luck and moving to grasp them before they slip away. In order to manage luck, Mr Smith warns against being too prescriptive in strategic thinking. His experience as a cricket captain taught him that too much planning could be harmful and it was better to trust his players to react to what they found on the field. The same is true in business: "If you are committed to over-prescriptive, over-predictive, over-schematised courses of action then you are unable to react to serendipity. Sometimes, loosening rather than tightening and clarifying is the best way to expose yourself to opportunities. Mr Gopalakrishnan agrees. It is important to master luck as much as possible, he says, but earned luck and unearned luck have to be managed in different ways. "Earned luck has a road map," he says, "and there are certain methods you can follow. With unearned luck you are at sea, with only a compass to guide you. Here, all one need do is wait for a chance and then seize it with both hands. For Mr Gopalakrishnan, luck and skill are both important in this process. Mr Smith concurs: "Success comes when chance and skill interact, and create something quite new." But to manage luck in this way, it seems we need to recognise that we are all to some extent lucky. In tennis, most male professionals are now more than 6ft tall; anyone shorter than this is unlikely to make it. Yet we cannot choose how tall we are. Opera singers too are born with the potential to sing well, and those of us born with a singing voice like a frog in a rusty bucket have no hope of equalling them. Some with fine voices never realise their potential because they lack access to singing teachers and voice coaches. Again, success is down to the chance circumstances of birth and background. "Looking back," says Prof Gosling, "luck is how we account for the extraordinary fact that we have survived thus far. Any other explanation - for example, based on good sense and cleverness - is plausible only in the narrowest of perspectives. To succeed, it seems, we need to be two things: skilful, but also be lucky.