Keeping Up with the Billionaires or How to Be Successful with a Lot of Lucky Breaks

Recently I started a new assignment and discovered a past colleague would join me for part of it. We’d not worked together for more than 10 years and I immediately looked forward to catching up. His answer to, “what have you been up to, lately?” was a dizzying catalogue of attempts and failures. Each of them was framed in the same way: the new project looked great at the start, he worked tirelessly, he rigorously applied his intellect and experience, and just as success was within reach, something (or someone) came into the picture and fouled everything up.

This mindset is a common bias (explained later). It’s held – in varying degrees – by nearly everyone in the world at some point. It’s all too easy to rationalize our own behaviors by focusing on the few things we did right and not the tremendous number of things we did wrong. Lefty Gomez, a baseball player from the 1930’s New York Yankee’s, may have said it the best: "I'd rather be lucky than good." He was right.


The Myth of Meritocracy

In the modern, Western-influenced world of business, we tend to think that hard work and intellect are the biggest drivers of success, especially if success is defined in financial terms. But consider this: intelligence across a population has a natural Gaussian distribution. In other words, it looks like a standard bell curve.

Figure 1: Normal Distribution of Intelligence

Figure 1: Normal Distribution of Intelligence

That means that intelligence is equally distributed across the population and that about half the population will have intelligence above the midpoint and the other half below the midpoint. Figure 1 is an example of how intelligence is distributed. The vertical or Y-axis represents the count or number of people at all the points along the horizontal or X-axis. The middle of the bell, the highest point, represents the largest number of people (by way of the Y-axis) at the horizontal middle of the X-axis (relative intelligence).  It also indicates that the super smart on the very far right of X-axis has a small number of people and is relatively similar to the number of people who are the opposite end of the curve with very low intelligence.

Figure 2: Skewed Distribution of Wealth

Figure 2: Skewed Distribution of Wealth

However, financial success (wealth) is not so equally distributed. There are far fewer wealthy people than there are poor. The distribution of wealth looks something like curve in Figure 2.  with the very far right side of the X-axis – the wealthiest in the population – is represented by the lowest numbers and the tallest part of the curve, where the highest numbers of people exist, are on the left side of the X axis, which represent the smallest amount of wealth.

It looks skewed and uneven and nothing like the symmetrical bell curve for intelligence. This begs the question: are intelligence and wealth really linked? Is success available to anyone who’s smart enough and driven enough?

If we lived in a pure meritocracy – one in which people with the greatest intelligence rose to the top – then the distribution of wealth would about the same as the distribution of intelligence. The curves would look similar, rather than so dramatically different.

As an example of how the myth of meritocracy is alive and well was when Forbes recently announced that Kylie Jenner is a self-made billionaire. Stephen Johnson wrote a piece in the Big Think calling bullshit on this claim.  “Calling Kylie Jenner self-made without acknowledging anywhere the incredible head start she had is what allows people to turn around and look at poor people and ask them why they haven't become billionaires yet…Her story is not inspiring or motivating for anyone.” He’s right.

The same is true for Bill Gates and Steve Jobs. Both men are gifted with tremendous intellectual abilities, personal drive and responsibility; however, their circumstances afforded them tremendous luck, according to Jim Collins and Morten Hansen. Gates and Jobs grew up with abundance and without financial worry. They had luck on their side. To put a firm tag on the term luck, Collins and Hansen established guidelines in this way: “We defined a ‘luck event’ as one that meets three tests. First, some significant aspect of the event occurs largely or entirely independent of the actions of the enterprise’s main actors. Second, the event has a potentially significant consequence — good or bad. And, third, it has some element of unpredictability.”

With this definition and some reflection, we can all see the impact of luck in our lives as a factor that exists outside our sheer intelligence.


Supportive Research

Recently, some Italian scientists conducted a real-world simulation over several years with a group of individuals building new businesses. After intense data collection and analysis, the authors discovered that the people who amassed the greatest wealth during the study were not the smartest. It was noted that “the correlation between the amount of luck and overall wealth was clear, with the luckiest clustering near the top, and the unluckiest clustering near the bottom.”

In their paper, “Talent vs Luck: the role of randomness in success and failure,” [July 9, 2018] the team of Pluchino, Biondo and Rapisarda noted that, “…if it is true that some degree of talent is necessary to be successful in life, almost never the most talented people reach the highest peaks of success, being overtaken by mediocre but sensibly luckier individuals.”


It’s Cool

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The false belief system that (a) our actions typically lead to success and (b) we fail only at the hands of a cruel world is ready to be put to bed. Known as survivorship bias, it focuses our attention on the things we did correctly (which are often due to luck and are few in number) and we dismiss the many things we did incorrectly. Hence, we focus only on the ‘surviving’ elements in our success story and not the failures. Kylie Jenner’s wins have been largely situational and a result of tremendously good fortune in her life. Her success is not replicable because it wasn’t a result of intelligent strategies and brilliant execution. She started the race with a head start.

In analyses conducted by colleagues on top-performance sales reps, the biggest winners were found to be more correlated with territory than to specific people. It’s not that top performers aren’t really good – they are. But they are more than just good: they’re lucky, too, and we generally fail to acknowledge that.

Hand in hand with such a misconception is the blind spot bias, where we have the tendency to see ourselves as less biased than other people, or to be able to identify more cognitive biases in others than in ourselves. My old colleague is operating with an extremely high degree of blind spot bias. In truth, we’re all operating with a large set of biases that influence our decision making and behaviors. That said, a clearer lens on our actual behaviors can more accurately illuminate the drivers of our own achievements. By limiting the effect of the blind spot bias, it’s possible we become better performers in all aspects of our lives.

And worse than the blind spot bias is the licensing effect, whereby increased confidence and security in our self-image or self-concept tends to make us worry less about the consequences of subsequent immoral behavior and, therefore, more likely to make immoral choices and act immorally. However, these correlations are my impressions, not on scientific evidence.

There’s no reason to feel guilty about being lucky or condemning it in others. It just happens. And, clearly, some have more of it than others. Regardless of the quality and quantity of lucky experiences, how we process those experiences will have lasting consequences on our self-image.

Our world could be easier to live in if we didn’t believe that being smart is all we need to become successful and that bad luck is the only thing keeping us from great riches.  My old colleague might enjoy a more positive and successful future if he could gain a clearer view of his work habits and his circumstances. His future could be more profitable if he could eliminate the fables and identify the factors contributing to his failures, as well as his successes. By dispensing with the myths, it might even make him happier.