June 9, 2008

Good day, team,

Today’s challenge is about the psychology behind winning and the lessons we can learn from realizing that there’s no such thing as a sure thing.

Yesterday, a horse named “Big Brown” ran the Belmont Stakes. This horse had already won the Kentucky Derby and the Preakness. He won his first five races by a combined total of 39 lengths. In every race, he blew all the other horses away, and so everyone was convinced that the Triple Crown (winning all three races) was his for the taking (or the running, so to speak).

Big Brown’s trainer and owner boasted all week about how it was a foregone conclusion that their horse would win. They were certain that they would be celebrating the first Triple Crown win in 30 years and were excitedly looking forward to stud fees of up to $120 million afterward.

But the universe has a way of humbling us. Yesterday, Big Brown came in last. A horse named “Da’Tara” won the race.  The odds were 38 to 1, and the return paid $79 on a $2 ticket. As the famous anonymous quote says, “Never bet on a sure thing unless you can afford to lose.”

Over the last year, I’ve watched a local company lose a great deal by making wrong assumptions and bad decisions about its business. The leaders had a healthy, viable business. It had taken them 10 years to create a company that was growing slowly but surely, and the future looked very good.

Strangely enough, the CEO became convinced, partly as a result of naive internal advisor’s, greedy external consultants and self-delusion, that he should completely change the business model and take his company in a different direction. He couldn’t quite explain what the new business was or how it would work, but his advisor’s convinced him that if he changed the model, he could get into a different market and make millions.

He began to hire people who parroted back just what he wanted to hear. He convinced himself that he could only win and that the old business wasn’t going to grow fast enough or make enough money. Sadly, he never questioned the assumptions he or his consultants made, and his business is slowly dying as a result. The only real business left is the one that had been grown previously, and there are no new sales.

Your challenge this week is to question your assumptions about anything being a sure thing. If you think your product is the best out there, think again. Perhaps you’re convinced that you have no competition or that the competition has a much weaker position than you do. Maybe you and your team are absolutely sure that the direction you want to take is the only possible solution, without questioning whether your initial assumptions are completely accurate.

My grandfather used to go to the horse races on occasion. He was not a betting man, but he liked the excitement of the crowd as the horses rounded the last bend and raced to the finish line. He loved this quote from W.C. Fields: “Horse sense is the thing a horse has which keeps it from betting on people.” I think about that quote when I’ve convinced myself that my team, or the team I’m working with, is already in the winner’s circle.

Have a great week!