Inputs and outputs

Admitting that luck has a huge part in most of our achievements and successes does not mean diminishing them. Nor does it mean diminishing our skills and capacities.

It’s more about understanding that there are a set of things we have under our control and a set of things (usually bigger) that we have absolutely no power over. When we understand this fundamental difference, than it is a whole lot easier to practice accordingly and let go of worries, preoccupations and anxieties that are linked to the latter group. And usually strongly limit and hinder our performance in the former one.

You can decide to show up for work every day, you cannot control the path your career will take five or ten years down the road.

You have power over how you will use your time today, you have none over whether people will like what you did or will agree with your decision.

You can set out to begin a project that can potentially touch the life of many people, you cannot decide whether people will actually be touched by it, or change their mind if they are not.

It is up to you to say yes or no to that request, you have very limited grasp on what will happen next.

When we look back at the successes we’ve had, we should praise the role of the work we’ve done, of the efforts we’ve put in, and also be very mindful of the fact that under very similar circumstances the outcome could have been completely different. You can call it luck, randomness, environment, chance, context. It does not matter. As scary as it sounds, you control the inputs, never the outputs.

The two parts of action

There are two parts in action.

  1. Knowing what needs to be done.
  2. Doing it.

The first part has to do with learning, and arguably nowadays we are in the perfect context to get to know what needs to be done. Information has never been more available, there is a “five-step” list to get to do almost everything one can think of, education and peer-to-peer sharing of experiences is facilitated like never before.

The second part, on the other hand, has never been so difficult. It is where 99.9% of us fail.

Investing and the stock market is the perfect example for this. There’s a beautiful lesson by Howard Marks, co-founder of Oaktree Capital, in one of the latest Motley Fool Money podcast (interview starts around 18:50). To summarise it:

Stocks return 9-10% a year on average. We know that. Yet they rarely return between 8 and 12% in any single year. The average is not the norm. Why is that? It’s because of emotional excesses. To the upsides, that then require corrections, and to the downsides. If you think about the value of a company in a 60-year time frame, that is not impacted by what happens day-to-day, week-to-week, month-to-month, year-to-year. It is pretty stable. The changes in earnings in one quarter is not really important. But people react excessively to these things.

Howard Marks

Nobody wants us to be emotionless robot, yet if we set out to do something important to us, this is a lesson that is better to keep in mind.