If you want to learn how to do anything, it makes sense to learn from the best. It's no different in the pursuit of success. Why not learn from those who have climbed to the most rarified air --successful billionaires.
A new report from investment bank UBS and PricewaterhouseCoopers reveals an interesting conclusion. Billionaire-controlled companies perform twice as well as companies not controlled by a billionaire (yielding a 17.8 percent market return versus 9.1 percent, and are consistently more profitable). The study calls this phenomenon the "billionaire effect."
This effect happens because, the study determined, of three traits these magnates disproportionately tend to develop. Here are those three traits, and my perspective on how you can develop them too.
1. Smart risk-taking.
Taking smart risks isn't rocket science. It involves doing your homework, scenario planning, and having backup plans. The problem lies in getting people to take risks to begin with. The dumbest risk you can take is to not take risk.
A manager at a Vegas casino once told me about a problem they were having; one game in particular was clogging up the floors with unproductive traffic. Meaning, the ratio of people standing and watching the game to those stepping up and playing was out of whack --the game was causing a throughput problem (too much unprofitable traffic clogging things up). What was the game?
If you've ever seen a craps table, you know how wildly confusing it is (I play craps sometimes and I don't know how to play craps). People literally won't "step up and roll the dice" (a phrase coined in Vegas) because they don't understand the rules, so they don't want to risk their money.
Meanwhile, back at the office, people don't want to take risks because they don't understand the rules of risk taking. If you're a leader, establish the rules (if not, ask about them). Use these questions to start a conversation about risk taking and get clear on the rules. Better understanding leads to more, and smarter, risks taken.
- What constitutes a good risk?
- What constitutes a dumb risk?
- What happens if I take a risk and fail?
- What happens when I take a risk and succeed?
- What assumptions must be true to make the risk worth taking?
- What resources are in place to help me succeed with the risk?
- Who needs to be comfortable with the risk I take?
- What's the worst thing that could happen with this risk, and is it acceptable?
- What's the best thing that could happen with this risk, and is it exciting?
2. Obsessive about spotting opportunities.
The study calls it "business focus", seeing opportunities to grow the business, especially ones that others miss. That includes maintaining a long-term vision for the opportunities and where they might lead.
I've learned over the years that some of the best places to mine opportunity are where you find problems, frustrations, and adversity that your customers regularly face. Seek to determine their unarticulated needs and wants, as well.
It also helps to practice being open-minded and optimistic. The study specifically stated that "billionaire entrepreneurs have a very optimistic attitude" when it comes to both taking risk and identifying opportunities. They know you've got to break some eggs to make an omelet, and they're forever on an egg hunt.
The study also pointed out their subjects "are highly resilient, undeterred by failures and roadblocks." This is one of the most common traits I've seen in the most successful people I've worked with (even if they haven't reached billionaire status). The key here is that when you're falling short of a goal, don't abandon ship.
University of Toronto research among dieters showed that when dieters blew an interim dieting goal (by eating something they shouldn't have along the way), they were much more likely to throw in the towel and just go off the diet. This has broader application; the truth is, when we miss any interim goal, we're much more likely to throw in the towel rather than institute an acceptance and recovery mindset.
The best way to handle this is to think of the progress you've made to date and to know that all the positive steps you've taken moved you much farther forward than your misstep moved you back.
Nobody said being a billionaire is the be-all-to-end-all. But we all can learn something from them, especially when it comes to winning in business.