How is it that some companies seem to get so lucky? London Business School professor of strategy Freek Vermeulen discusses the importance of chance events to business in his podcast.
Researching his study, “Fortune Favours the Prepared Firm”, Vermeulen discovered that business success often has an element of luck, especially during the early stages of a company’s development.
Chance or random events occur in business, but part of being lucky is simply recognising and exploiting great opportunities when they come along.
Take South West Airlines: in the early days, the budget airline faced financial difficulties and was forced to sell its fourth plane and cut back on costs and in-flight frills. But when the company was back in the black, founder Herb Kelleher didn’t return to the ‘old’ way of doing things. He recognised that they’d chanced upon an opportunity to do something innovative.
Likewise, a decade ago, toy-maker Hornby faced an uncertain future. It shifted its manufacturing base to China, which saved the company money, but reinvested it in producing finely detailed trains that are more for the hobbyist than a child. It was an element of luck that guided the company to concentrate on collectible models rather than toys, says Vermeulen.
So can you make your company a little more lucky? Vermeulen has the following advice:
- Be systematic. Organise your business in such a way that you’re running lots of small experiments that you can capitalise upon if one looks promising.
- Form alliances with other companies to create more opportunities for chance events to occur.
- Most of all, be open to new ideas and follow up on them, even if they mean doing things differently.
Photo: Kaibara87 CC 2.0
