How much success can be attributed to skill or luck?
The Paradox of Skill is simply this – the closer in abilities two people are, the larger role luck plays in determining the outcome. Olympic sprinters are extremely skilled and the differences in their abilities are minute. So a very minor thing, like an inopportune muscle twitch, can change the outcome of a race. Now, if I were to race an Olympic sprinter, I would require luck on the scale of a meteorite striking at the right moment to win. So skill would be triumphant and I would probably require a medic.
In this sense, I am using luck to describe randomness – things outside of your control.
The same applies to competing companies. The less difference in their services, the greater the role of luck in their sales outcomes (Wow! Our VP and their VP went to the same college. What are the odds?) Companies continuously try to match each other on price and service. So aside from old fraternity ties, what could reduce the role of luck?
Better knowledge can help in one of two ways:
- Knowledge about the potential Client and their industry. Have specific ideas about the Client, not generic market information.
- Knowledge about yourself. The better you know yourself, the better you can react to a Client’s needs and differentiate from competitors.
Utilizing the vast amounts of available data, and applying analytics and Data Science approaches can generate insight. That insight can improve your skills, so to speak, and make luck less of a factor. Companies that can harness (no pun intended) the ability to generate insight will win.