In the final extract from his book, The Second Bounce of the Ball, pioneering venture capitalist Sir Ronald Cohen explains why, in business, the harder you work the luckier you get — and why integrity is key to your success
LUCK AND PERSEVERANCE
THE FIRST rule of luck in business is that you should persevere in doing the right thing. Opportunities will come your way if you do. Entertainment entrepreneur Haim Saban provides an example. He was in Japan when, by chance, he saw Power Rangers on television. He realised that the programme would have international appeal and bought the worldwide rights to it. He sold it to broadcasters all over the world and
You could say that Haim Saban was lucky to see Power Rangers when he did, before someone else bought it. But his competitors were not as assiduous in their travels as Saban. They were not in Japan. Those who were did not see in Power Rangers what he was able to see in it. The fact that he was in the right place at the right time was a matter of perseverance, not luck. Haim Saban was in search of a product that would have mass appeal. He was constantly on the lookout. He found what he wanted in Power Rangers.
The second element in making your own luck is networking. I would say that luck is directly proportional to the size and appropriateness of your network. The more people you know in your sector, the more often you will encounter circumstances that help your cause.
Thirdly, you must put yourself in a position to benefit from events and circumstances more than your competitors, to become “luckier” than them by grasping better the opportunities that present themselves.
The fourth element is being flexible enough to respond quickly to changes in the market. You must live and breathe the strategy of your business, trying to push it forward in a direction that will give you the ultimate prize of leader of the sector.
The final element may well be the most important. From time to time, change will be harshly imposed on you. A competitor might come up with a threatening product or service. One of your important resources might walk out of the door: a key partner might leave. You need to rise to the challenge every time that happens. It is not a question of just coping with that event; it is a question of turning it to your advantage. This is a fundamental precept of entrepreneurial leadership.
EGO AND INTUITION
DEEP DOWN, most entrepreneurs are driven by the desire to make a mark. This driver is all about ego. But there is a difference between immediate gratification, which is what the self-regarding entrepreneur most craves, and the recognition that comes from long-term achievement.
For the entrepreneur, harnessing ego is an essential discipline for success, but this discipline is not always maintained.
Sinclair had enjoyed success with his electronic calculators, computers and portable televisions, management was not his strength. He tried to do everything himself. In addition, he insisted on the infallibility of his own reading of the market.
He wanted to revolutionise the car thought he could do it because he believed he was the man who could revolutionise everything. He designed the car was a failure as a result. In the event, we succeeded and two other non-executive directors eventually resigned from the board because we felt that, despite his undoubted talent, it would be impossible for him to succeed.
To keep ego out of the driving seat, the entrepreneur must give priority to intellect and intuition. Intellect is relatively easy to identify: it is about calm, rational analysis of the evidence before arriving at a decision.
But you should also follow your intuition. Why? Because intuition subsumes intellect. The more analytical work you have done, the more experience you have, the more reliable will be your intuition.
Finding the balance between ego, intellect and intuition is especially important when it comes to recruitment. In my experience, women tend to be more intuitive than men. Because I believe that intuition plays a crucial role in business, I have always tried to recruit women. The truth, however, is that women are either not attracted to, or are not as well accommodated within, the world of business as men. There are many great women managers, but there are still too few women entrepreneurs.
DOING THE RIGHT THING
APAX OULD only grow to the size it did in my time because we had an agreed set of values: personal and corporate integrity; meritocracy; maintaining longterm relationships based on trust with our investors and the entrepreneurs we backed; leadership.
The ethical approach has a great track record. Among the longest-lived and most successful compa U a tradition of ethical conduct.
Doing it right at Apax meant adherence to five precepts. First, my word is my bond: if we agreed to something orally, it could be relied upon.
Second, honour the spirit as well as the letter of agreements: we did not look to satisfy legal wording rather than the agreed intention.
Third, full disclosure: for Apax, inadequate disclosure is lying by omission. It was always our practice to inform relevant parties in a timely manner of any information to which they were entitled.
Fourth, act fairly: I stand up for myself and my firm and I will always insist on what is fair from my point of view. By the same token, I try to ensure that it is also fair from the point of view of the other person. This applies especially where there is an imbalance of power, for example between employer and employee.
Finally, act responsibly: if you have power and authority, with it goes responsibility. I tried to ensure, for example, that I never put people into situations where they were vulnerable.
You can only be the best if you attract the best people; you only attract the best people if you offer them a great vision; and a great vision includes great ethics. Today, I would go further: I would say that to attract the best people, you need both a moral dimension and a social conscience.
Youmaymakealittlelessmoneyintheshortterm,but you create an organisation that others want to do businesswith.Inthelongterm,youwillbemoresuccessful.