"Don't confuse luck with skill when judging others, and especially when judging yourself." Carl Icahn, self-made American mogul, investor, corporate raider, billionaire, 18th on 2007's Forbes 400
At this moment, Icahn has a net worth of nearly $15 billion. With that cash surplus you could give a million and a half dollars to a thousand of your closest friends! His name is found on the same page as other more well-known Forbes fellows like Mike Bloomberg, Paul Allen and Michael Dell. That's good company. His words above are clear; don't ignore the luck that was an integral part of every Forbes 400 member's story of success. He's telling you that an honest, financially successful person will embrace, rather than downplay, the role that luck played in their ascension. Good fortune contributed to their great fortune. Put another way: even billionaires get lucky sometimes.
His message is most stinging when he instructs us not to confuse our lucky selves with Harvard MBAs and Mensa members blessed with the Midas touch. We've all been lucky and luck has the power to make even a disastrous decision appear brilliant. What's the saying? I'd rather be lucky than smart? In other words, don't believe the hype — especially your own!
Everyone has had good fortune along the way — but is it acknowledged as it should be? Do we see the presence of environmental luck, as well as the presence of highly influential outside opinion (which often is mixed in like a spice, seasoning the outcome of our decisions)? Do we carefully track our misjudgments and check ourselves for biased fact finding and/or reaching early faulty conclusions? Is the luck that's woven into so many outcomes, and the help we receive from other sources, factored into the business score card we clutch (and sometimes proudly display), or do we just believe our own hype? There's new evidence that would strongly suggest the majority of owners, managers, supervisors and executives ignore some of the less celebrated components of success so they may more fully believe they are among the very best of the top performers in their organizational role.
Leaders Tend To Overrate Their Performance
Just two months ago, Business Week magazine published the results of a new study. The finding? Business leaders consistently overrate their performance. An impossible 90 percent of managers think they're among the top 10 percent in the workplace. Do you think the workers they manage would agree? Based on the fact that most instances of employee turnover are the result of staff dissatisfaction with their managers and supervisors, I would say the managers responding to the study were off the mark. It gets worse. Among owners and executives, 97 percent consider themselves an industry shining star. Only three in 100 owners consider themselves anything but an A-list, top performer. Obviously, they believe the hype. As a result, they are overconfident. This kind of misguided personal assessment can lead to all kinds of trouble for themselves, the people they supervise, customers, colleagues and the bottom line. Unfortunately, there's no law that limits the overconfident to one per company. Your company may suffer from an infestation of overrated performers. In fact, you could be one yourself — undermining through overconfidence.
Each of us has attended industry conferences, expositions and panel discussions with rooms full of very active, hands-on owners of fabrication shops, surfacing manufacturers, consultants and vendors of all types. We've listened to questions and answers and spent hours talking business with our fellow movers and shakers. With all due respect for everyone's hard work and diligence, our industry is not fronting 97 managerial scholars out of every 100 top dogs. No industry does. Could all of this overconfidence by leader-types be the reason why so many risky operations, in proven high-risk industries, open up all the time? Every town seems to have a handful of very well-known bad luck commercial properties that perpetually fail regardless of the business that opens up. Do these cash sinkholes attract 97 percenters?
We Can't All Be Above Average, Can We?
No, we can't. The world is made up of all kinds of people sporting all kinds of gray matter. As with most measured groups, there tends to be a fairly recognizable distribution of I.Q. types. If you imagine a 3-D bar on its side, then you can roughly imagine how "smarts" plays out. No surprise here; either end of the bar would be capped by folks whose capacity is outside the norm. The left cap (15 to 20 percent) would be underblessed in terms of I.Q. The bar's middle span, representing the lion's share of the population, would occupy the big mediocre middle (60 to 70 percent) and the right cap (the final 15 to 20 percent) corresponds to the sharpest slice of people. Were you to plot this on an X,Y axis, you would end up with the famous bell curve. The small group forming the right-hand cap is the only one that can legitimately call themselves "above average." Not 97 percent of us, not 90 percent of us . . . on a good day, with a big bowl of Wheaties and a Red Bull in our bellies, the brainiac population might reach 20 percent of us.
Successful People Rate Themselves Positively Perfect
"We swallow with one gulp the lie that flatters us, and drink drop
by drop the truth which is bitter to us." Denis Diderot, French philosopher and writer
According to Marshall Goldsmith, a well-known consultant interested in self-assessment, successful people consistently overrate their performance relative to their professional peers. Most would agree that entrepreneurs and those who reach the trusted level of manager are successful people. Fabricating firms are headed up by those same people — logic holds that our industry, and others like us, is populated with the overconfident. Goldsmith has interviewed more than 10,000 successful business people, asking them to rate themselves relative to their peers. He reports 80 to 85 percent of this group rated themselves in the top 20 percent of their peer group. Interestingly, the exercise was constructed so that, statistically, their peer group was just as successful as they were. Increasing the thickness of these cement-skulled business braggarts is the added fact that successful people have great difficulty accepting input from others regarding their performance or behavior. If the feedback does not agree with their own perception of themselves, they tend to deny the information for any one of three reasons: