Does Luck Matter in Business?

I had a professor in business school who said that some people were business determinists. They believed that the success or failure of a business had little to do with strategy or execution or anything else, it was just a matter of being in the right or wrong place at the right or wrong time. Naturally I think that is malarky, but in the back of my mind I have always wonder how much factors like luck play a role in business success.

Seth Godin wrote an excellent piece in the February issue of Fast Company about luck that dances around this question, but makes some good points.

Every time you launch a product or service, every time you apply for a job or start a nonprofit, you're either going to hit or not. If you get lucky, you're entitled to deny that luck had anything to do with it. But if you fail–and you probably will–understanding the role of the L factor will keep you sane. And if you've planned for it, it will keep you solvent as well. Solvent enough to try again and again, until you make it (and take all the credit).

This is on my mind today because I have been very lucky. When I started at the University of Kentucky, they had just begun a new program that allowed a handful of engineering students to get an MBA at the same time as the engineering degree by adding the classes. This meant I didn't have to have the typical 3+ years of work experience required for MBA programs. Because I was accepted into what was only the second class to go through the program, they hadn't worked out the details so I got some requirements waved and some nice perks that they probably don't give out anymore. Then I got into an internship at Lexmark, where I got some great experience for a college kid. My resume had been on file there for three years, and they never called. But finally I had an accounting professor who made us interview someone in our field as a project. The IEEE (a professional organization for EEs) put me in touch with a guy at Lexmark to interview for the project. That guy told me their co-op was leaving and they could use a new one. So I got the job and they never even looked at my resume. Pure luck. As luck would have it, the company was booming (this was '96 or '97) and there was a ton of work, so I got to do several co-op sessions, work full-time during the summer, and part-time during the school year doing all kinds of cool things that looked great on my resume. I was interviewing for jobs during the tech boom, which, being 23 and having a BS in Electrical Engineering and an MBA, made me a strong candidate. So I got hired and saw my salary go up nearly 29% my first year. I worked doing mostly digital design on a long-term government program, so when the economy went to hell, my job stayed put. Luck, luck, and more luck.

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After a few years of that I had an early mid-life crisis and realized I wanted to do something different. I wanted to build something. So I began looking for good business opportunities and networking like crazy. I found a good opportunity and after multiple rejections of my business plan, stumbled by dumb luck into my current business partner. I began working with him part-time and left my job in January to become a full-time entrepreneur. And to top it all off, the program I worked on at my last job just got cancelled. That's right. I designed parts of the graphic processing system for the Comanche helicopter, and five weeks after I left my job, the program is canceled. How lucky am I not to be there any more?

I'd like to think that some of this luck was created by me. If I think back, there are plenty of things that could have worked out but never did and I guess because I just kept my eyes open and kept working towards my goals, eventually luck and I were walking the same direction for awhile. It seems that luck, by definition, should be random, but I have to second guess that when I hear comments like "that guy has all the luck." Maybe that guy was just well prepared when the right opportunity came along.