Make your own luck shapiro
Smart risk-taking: 12 steps
Description
Predictive intelligence, the ability to act amidst uncertainty to shape your desired future, can be enhanced by following a four-step process: orient, organize, plan, and act. The first two steps, orienting and organizing, help you identify your goals and recognize opportunities. The latter two steps involve generating options, assessing their success probabilities, and taking action.
Predictive intelligence is not innate but can be developed through twelve specific skills. Every action we take is a gamble, investing time, effort, or money without guaranteed results. However, by leveraging predictive intelligence, we can increase the likelihood of our actions leading to desired outcomes, thereby creating our own luck and gaining more control over our destinities.
High predictive intelligence allows for agility in identifying and seizing opportunities, transforming luck into a consistent strategy towards achieving goals.
Table of contents
01The six orient and organize skills:
Set ambitious, clear future goals.
Recognizing your ultimate ambition from the beginning of your venture is essential for making strategic decisions and compromises. It's crucial to have a clear vision of the end goal you're striving for, and then align your choices with that vision. In any situation, you're constrained by various resources – such as time, money, reputation, effort, etc. If you allocate these resources to secondary goals, you might miss the opportunity to achieve what truly matters to you. Therefore, it's important to focus all your efforts on the future you wish to realize.
To apply this concept: First, quickly list all your potential goals – every possibility you can think of. At this stage, don't sort or prioritize; just draft a preliminary list. Next, identify your primary goals – sift through your list to determine which one or two goals are absolutely essential. If this is difficult, select your top three or four goals. Then, plan backwards from your primary goals – map out how you will move from where you are now to where you want to be. Accept that your plans may evolve, but eliminate distractions and focus on a single path that seems viable. This approach will clarify your thinking and reduce the feeling of being overwhelmed by options.
Identify any "emotion loops" – these are emotional or psychological needs that can drain your resources if not managed carefully. We all have emotional distractions that hinder our productivity. Understanding what drives these distractions can help you plan to mitigate them in the future.
Consider the question of being stranded on a desert island and whom you would choose to have with you. Answers vary, including one's spouse, a philosopher, a movie star, or a storyteller. Dean Kamen, the inventor of the Segway, chose the world's best boat builder. This highlights the first skill of Predictive Intelligence: identifying your Big Goals by envisioning the future you want to create and what your life or company must look like to achieve these goals. This step is about basing your decision-making on the future you wish to create, which is equally applicable to personal, career, and business decisions. To bet smart, start by sketching the future you want for yourself or your company.
Ensure the goal is worthwhile.
When evaluating the allocation of resources, it's essential to steer clear of scenarios where potential losses outweigh possible gains or where the rules are beyond your influence. In such cases, it's prudent to return to the drawing board and create a new opportunity where you can have a say in the outcome. Before committing to any venture, make sure it's in line with your personal principles and values. A well-considered decision requires a balance of potential rewards against risks and an understanding of who is in charge of the rules. Here's a systematic method for assessing new opportunities: Start by outlining all the potential benefits that could come your way if everything goes as planned. This initial step is crucial for grasping the full extent of the opportunity and recognizing any costs of postponing your decision. Next, take into account all the possible losses. Ask yourself what the consequences would be if things don't pan out and whether the potential loss is something you can afford or is too much to risk. Then, gauge the most likely outcome, given that the current rules and the key players enforcing them stay the same. Consider how much trust you have in this prediction. After that, analyze who holds, or could hold, the power over the rules. Anticipate whether any changes on the horizon could work in your favor or against it. Think about how power shifts might impact your potential gains and losses. Finally, consider the possibility of you taking the reins and setting the rules. Evaluate if you have the capability to take control and steer the direction of the game. Individuals and organizations differ in their views on what's an acceptable trade-off between potential gains, possible losses, and control over the rules. This is a subjective decision. The objective is to make choices based on knowledge rather than going in blind. In any endeavor, personal or corporate, you're essentially wagering on what the future holds. Successful individuals or entities aim to allocate their resources where the balance of rewards, risks, and control is most favorable to them, according to their own assessments and preferences. On the flip side, it's advisable to refrain from investing where the risks could overshadow the benefits, or where the rules are, or might become, controlled by others with opposing agendas. In such instances, it's better to pause and rethink your approach, or even come up with a new strategy where you can have more influence on the outcome. If, after careful consideration, you conclude that the optimal scenario is still unattractive, or if you believe you can't gain control over the rules to change the outcomes, then simply weighing the potential benefits might be enough for you to decide that this isn't a game you want to play by your rules.
02The six plan and act skills :
Predict outcomes of emerging trends.
In strategic decision-making, understanding the relationship between vision and agility is key, often outweighing brute strength. To forge your own success, it's essential to spot trends early, gaining a competitive advantage by identifying opportunities and making well-informed choices. Creating prediction maps that assess factors for their potential impact and associated uncertainty can help in this endeavor.
For high impact, low uncertainty scenarios, use these near certainties to your advantage, much like leveraging the constant presence of wallpaper in a room. In low impact, low uncertainty situations, akin to an ant colony's collective strength, focus on the small details that can lead to significant gains. High impact, high uncertainty events are the wild cards, like the unpredictable outcomes of product approvals by regulatory bodies, which can either boost sales or send you back to the drawing board. Conversely, low impact, high uncertainty factors are strategic sinkholes, unlikely to affect outcomes significantly and not worth extensive debate.
Contrary to popular belief, higher returns don't always require higher risks. By quickly identifying and acting on emerging patterns, you can often find yourself in favorable positions, enhancing your chances of success.
To create prediction maps, set a time frame, swiftly compile a list of potential impacting factors, prioritize by impact on a scale of 1 to 10, assess each factor's uncertainty, reevaluate to set thresholds for low and high impact and uncertainty, and map the factors onto a grid. Adjust as needed for accuracy.
Eileen Shapiro and Howard Stevenson stress that perfection in prediction maps isn't the goal; speed is. They advise considering key external factors and learning from forecasting outcomes to improve prediction skills. Disciplined forecasters look beyond immediate desires, considering long-term implications and emerging patterns to inform their decisions, balancing risk and return effectively.
Maximize your surefire opportunities.
Astute gamblers know the importance of maximizing low-risk wagers, understanding probabilities, and aligning bets with the house's expectations. In business, this translates to investing in "Wallpaper zone" wagers—those with low risk and high impact. Identifying these wagers involves envisioning advantageous scenarios, using empathy to foresee potential pitfalls, and contrasting ideal wagers with current strategies to determine the best course of action. For instance, Jack Welch's leadership at General Electric focused on improving business unit performance, leading to increased stock prices as a natural outcome. A low-risk strategy in technology sectors involves quickly establishing a de facto industry standard, as Microsoft did with its operating system software for the IBM personal computer. Wallpaper factors, representing key future conditions, guide investments towards trends that aid goals or address inevitable situations, creating one's own fortune by aligning with new rules. Success is defined as achieving desired outcomes, and satisfaction comes from understanding future desires and making wagers to achieve them, as noted by Eileen Shapiro and Howard Stevenson. This approach emphasizes strategic alignment with future trends and rules, maximizing return on investment with minimal uncertainty.
Related books
