We defined a “luck event” as one that meets three tests: First, you didn’t cause it; second, it has a significant potential consequence, good or bad; and third, it has an element of surprise, some aspect of the event is unpredictable before it happens. Using this definition, the evidence showed a lot of luck in the history of these companies. But— and this is the crucial point—we also found comparable amounts of luck in the control set of comparison cases we studied! The big winners did not generally get more good luck, less bad luck, bigger spikes of luck, or better-timed luck than their comparisons. What the best achieved, instead, was a higher return on luck. Hansen and I learned that the question is not whether you’ll get luck along the way—you certainly will get luck, both good luck and bad. The critical question is what you do with the luck that you get. I’ve come to believe that about 50 percent of great leadership is what you do with the unexpected.

(Again, to review from the previous chapter, a “luck event” meets three tests: First, you didn’t cause it; second, it has a significant potential consequence, good or bad; and third, it has an element of surprise, some aspect of the event is unpredictable before it happens.) Any framework that didn’t account for unpredictable and unforeseen events would be incomplete, and I couldn’t be intellectually satisfied until we wrestled with the question of luck. The concept of return on luck accounts for the undeniable fact that luck happens (a lot) yet captures the essential truth that luck itself cannot cause greatness. Catastrophic bad luck can kill a potentially great company, but good luck cannot make a company great. Luck doesn’t build great companies that last; people do.

So how do we develop ways of understanding randomness? By which I mean: How can we think clearly about unexpected events that are lurking out there that don’t fit any of our existing models?

The existence of luck also reminds us that our activities are less repeatable. Since change is inevitable, the question is: Do you act to stop it and try to protect yourself from it, or do you become the master of change by accepting it and being open to it? My view, of course, is that working with change is what creativity is about.

What a lot of people miss is that ordinary moments determine your position, and your position determines your options. Clear thinking is the key to proper positioning, which is what allows you to master your circumstances rather than be mastered by them.

It doesn’t matter what position you find yourself in right now. What matters is whether you improve your position today.

Every ordinary moment is an opportunity to make the future easier or harder. It all depends on whether you’re thinking clearly.