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How to Succeed with Certainty

2010 March 21

In 1983, Andy Grove knew that his company, Intel, was in trouble.  Its core business, DRAM memory chips, a technology they had pioneered, was facing stiff competition from the Japanese.  Both margins and market share were declining rapidly and the future seemed bleak.

Rather than stay and fight over what remained, Grove chose to bet the company on microprocessors.  The rest, as they say, is history and Intel’s dominance today can be traced back to that fateful decision.

How did he know for sure that he was making the right decision?  Is there a way to be certain?

Have a Clear Vision?

If you have a coherent and distinct idea about where you want to go, then the details should take care of themselves, right?  Even Einstein said that his imagination was more important than any intelligence he may have had.

On the other hand, Jeffery Skilling at Enron had a vision too.  So did Bernie Ebbers at Worldcom.  Both were responsible for historic flameouts.  It seems that big ideas end in disaster at least as often as they lead to success.  Visionary leaders are hailed; then often reviled.  The world moves on.

Even in Einstein’s case, his intuition led him astray.  It was his inability to abandon his conception of how the universe worked that led to deny the evidence of quantum mechanics, a field that he, in fact, had initiated.

“God doesn’t play dice with the universe,” he famously said.

“Einstein, stop telling God what to do!” Niels Bohr retorted.  Bohr, along his protégé Heisenberg, won the day and Einstein’s career was effectively finished. In much the same way, Einstein rose to fame in the first place because his predecessor, Max Planck, was blinded by his own vision.

Build up from Solid Principles?

Rene Descartes believed that you could be certain if you start with facts that you are sure of and build up from there.  That’s how he came up with the immortal phrase, Cogito Ergo Sum (I think, therefore I am).  Unfortunately, it never went any further than that and his Rationalist school was eventually abandoned.

Well, maybe not completely foresaken.  Many managers today go in search of the perfect system.  They develop rock solid operating principles and adhere to them religiously.  Inevitably, the system fails, they realize their mistake and make the necessary corrections to form a truly perfect system…until that one fails too.  On and on it goes…

In 1931, Kurt Gödel published his famous incompleteness theorems, which proved that any logical system built on axioms was bound to contradict itself.  In essence, every system is necessarily incomplete or inconsistent.  Every program is flawed and will crash given enough time, no matter how good the underlying principles are.

Wait and See?

One way you can be certain is to just simply watch events as they unfold.  I am certain, for instance, that the Soviet Union fell.  In that sense, I possess knowledge of events that the world’s best intelligence services, filled with thousands of people smarter than me, were unable to predict.

Unfortunately, you can’t do much about events that have passed, so this information is of limited value.  Andy Grove wasn’t 100% sure about microprocessors, but it was undeniable that Intel was getting killed by the Japanese in DRAM memory chips.

In other words, he was sure that if he did nothing, he would certainly fail.  He succeeded not because his path was clear, but because he had the guts to take it even though it was dimly lit.

Sustainable Risk Taking

A few years ago I was listening to some Hollywood guy get interviewed on the radio.  He was asked, “What makes the difference between success and failure in Hollywood?”   His answer was interesting.

He said that of all the people he knew starting out, everybody who lasted more than two years eventually made it.  It was only those that became discouraged and quit that failed.

Rick Chapman, in his excellent book In Search of Stupidity, argues that Microsoft became the world’s most dominant software company mainly by avoiding any huge mistakes that would kill or cripple the business.

He points to others, such as Borland and Ashton-Tate, who were no less promising, but bet everything on a stupid idea.  If you can’t be certain of your vision or your operating principles, it makes sense to hedge your bets so that you’ll be around to take more risks in the future.

A Tale of Ordinary Madness

At the age of 35, Charles Bukowski lay penniless and near death in a charity ward from a bleeding ulcer that was caused by more than a decade of heavy drinking, tawdry rooming houses and questionable women.

He later gained fame and fortune by writing about his sordid lifestyle and was even portrayed by Mickey Rourke in the movie, Barfly.  In his seventies, he was interviewed by a reporter who asked him look back and account for his life.  To what did he owe his enormous success?

“Endurance,” he said.

– Greg

19 Responses
  1. March 21, 2010

    Endurance, vision and intuition (in my book at least) are the three prime keys to business success. The problem comes when the culture of a company as a whole does not support those characteristics. I faced that problem within my own company with my own business partners. Closed minds, assumptions based only on things that have already been, and too much reliance on data, all can have disastrous results on a business. Especially in an entrepreneurial start ups, those elements need to be in place for ultimate success. Choose your partners wisely….
    .-= Cheryl Andonian´s last blog ..The American Idol Guide to Brand Building =-.

    Greg Reply:

    Good advice.

    Thanks, Cheryl.

    – Greg

  2. Oscar permalink
    March 22, 2010

    Greg, good point. Theres is a great misunderstanding about the role of uncertainty in business decisions and in particular in entrepreneurship. Most people believe they can predict future outcomes either because once something has happened it seems totally predictable or because you only learn about successful outcomes but rarely about failures. These bias are well-address by Taleb in The Black Swan who is criticized for stating the obvious. Somehow the obvious continues to be ignored.

    Greg Reply:

    Oscar,

    I agree. Taleb, although a bit more shrill than he needs to be, has done a wonderful job of putting Mandelbrot front and center, where he should be.

    – Greg

  3. March 22, 2010

    Greg;
    Another great post – thanks for sharing. I agree with you and Cheryl: Endurance, vision and intuition are incredibly important in achieving success. I’m assuming, by the way, that you both include hard work in your definition of Endurance, right?
    I’d like to add to the list, the concept of commitment. There’s a well-known story in the computer industry about the Pig and the Hen and one’s breakfast. When you next sit down to a breakfast of bacon and eggs, think of the Hen as a Contributor, but the Pig was Committed. I tell anyone who is thinking of starting a business that they must be the Pig and not the Hen. I’ve started 5 businesses in my life – one was a resounding failure, a few were successful and the last is just getting underway, and is thus too early to judge. But I have no doubts about its success because, unlike the one which failed, I am being the Pig in this one.
    It’s a bit like that guy who leapt off the burning oil rig into a sea of flames and when asked how he found the courage to do that, said that he got too hot where he was. Andy Grove got too hot – the pressure forced the bold move. And reacting like this under pressure is where the commitment becomes important.
    .-= Eric Goldman´s last blog ..B2B Print Publishing: Looking for a Lifeboat =-.

    Greg Reply:

    Eric,

    Thanks for sharing your insight. Good luck with your newest business!

    – Greg

  4. March 25, 2010

    Hi Greg,

    Simple points executed perfectly!

    Endurance, tenacity, thick skin, perseverance, diligence…there’s many expressions to sum up the character of an individual who consciously and purposefully steps out of what they’ve been used to (monthly pay check, happy wife/partner, comfortable life) in pursuit of a dream, that ultimately turns the previous sedentary existence on it’s head…hopefully, only for a relatively short period.

    Starting your own business/following your belief and confronting the unknown, often investing much of your life savings or those of your family and friends is a daunting prospect, with no guarantee of return or indeed of hanging on to those friends/family/wife/partner should it not turn out as you’d planned. The daily pressure of potential personal disaster and financial ruin is what keeps that business idea as only a dream for most people, but, for those who take the risk, and face fear, they have a chance to do something for themselves that is liberating, challenging, enormously hard work both physically and mentally, but one day, that dream may become reality.

    If you have an idea and it is based on your knowledge and experience of a particular market, and you’ve spent time looking at all the perspectives of the industry, competition and still think it’s a winner, then the next step of getting on with it, instead of being daunting becomes exciting and you get up each day ready to take on those challenges and uncertainties knowing that the decisions you make are contributing to progress.

    If you keep your end objectives clear, but are prepared to absorb market and consumer changes along the way to keep the business relevant, then, given time, success is there for the taking.

    “Who Dares Wins!” ;o)

    Cheers,

    Jeremy.

    Greg Reply:

    Jeremy,

    Damn right!

    btw. How is your business going?

    – Greg

    Jeremy Reply:

    …I would have got more immediate graification by putting the money in to a really nice burger van rather than websites – at least I’d have been able to eliminate the bugs with a rolled up newspaper…!

    The world presents a new “learning opportunity” each day…we’re getting there!

    Cheers,

    J.

    Greg Reply:

    Good luck!

    – Greg

  5. March 26, 2010

    Greg,

    Nice summary of what has made some people successful or unsuccessful. I can add some others like being in the right place at the right time, playing on your key strengths, chance, etc. but I would agree there is no certain recipe for success. Moreover – success has different faces, and what is failure from one perspective may be success from another…

  6. April 18, 2010

    Mickey Rourke, Bernie Ebbers, and Jeff Skilling all mentioned in one post?! I am subscribing to your newsfeed.

    Rourke is probably the most interesting actor since Brando. There’s an hour long interview with him on YT by that Brit whose name I can never remember. (Pers Morgan? Piers Morgan? Something like that.) It worth listening to. Very inspirational.

    The opening chapter of Om Malik’s Broadbandits contains a superb account of what led Worldcom to blow up. It was partly due to Bernie falling for the lie that Internet users were doubling every 100 days. Bernie also suffered from an integrity deficit.

    Regarding Jeff Skilling, have you seen “Enron: The Smartest Guys in the Room”? When it first opened, I made a 150 mile round trip to see it. Since then I have bought a copy and seen it another six or seven times. It’s one of the best business documentaries ever produced and focuses on Skilling and Lay.

    With regards to Bukowski, I am reminded of a favorite quote:

    “If I had listened to the critics, I’d have died drunk in the gutter” – Chekov

    Greg Reply:

    Peter,

    Thanks for the great references. I did not see the movie (it’s a bit tough to get out here) and did not read the book. I read another, but can’t remember the name. It was some years ago and the book is still in another country (I recently moved).

    I’ll try to pick up broadbandits.

    Thanks again!

    – Greg

  7. April 24, 2010

    Hey Greg:

    Part of your post brought back memories of my read on Malcolm Gladwell’s The Outliers. Gladwell argues that success, in part, may be due to… LUCK.

    He cites any number of examples; the most instructive of which is Bill Gates. Gates grew up near the University of Washington, and regularly walked pass a building that contained a computer lab — very rudimentary early examples of mainframes. If I remember correctly, the UW had a relationship with Gates’ high school, and he was able to access the lab. Purely being at the right place at the right time. Luck. But for Gates’ proximity to UW’s computer lab, we likely would not have a Microsoft.

    Notwithstanding the above, Gates became obsessed with programing –especially as a teenager. During those times he would devote up to 24 hours a day to his programming passion. In the current issue of Wired Magazine, Gates recants those times.

    Thanks for the article. Play hard this weekend.

    Greg Reply:

    Ibrahim,

    Thanks. Have a nice weekend as well.

    – Greg

  8. Satinder permalink
    May 19, 2010

    In the end, nothing succeeds like success. You can only have post(mortem) analysis what contributed to success/failure.

    Greg Reply:

    Satinder,

    Thanks for sharing your perspective.

    – Greg

  9. May 19, 2010

    Hello Greg,
    Another good article. I enjoyed reading it and the comments.
    My two cents:
    1. Dont let your principles become rules. Most people are flexible about their approach, when they start out, because they are really not sure about what will work. Eventually, as they find success, they tend to become rigid and convert their principles to rules. I subscribe to the idea of not re-inventing the wheel (sometimes), but I also believe that its best to always stick to your principles and let these guide your rules (which may change with time).

    2. I love what you say about guts. In my experience, I am yet to see the forecast and business intelligence figures that have hit the bulls-eye. Don’t get me wrong, I am one for conducting research and ensuring that there is potential in any business venture. But I have also learnt that sometimes, if your passion is strong enough, you can swim against the tide and guarantee success. Just make sure you are listening and responding to the dynamics of your market.

    Again, I ask for your permission to ‘retweet’ this in my blog (www.ubigen.org).

    Greg Reply:

    Greg,

    Thanks. You make some great points! Jim Collins is goes to great lengths to promote the fact that many great companies start without a plan (i.e. Sony, Hewlett Packard, etc.) and failed with their first products.

    Yes, feel free to share.

    Thanks again.

    – Greg

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