The discussion of what makes us successful has been going on for a considerable period of time.  Many of us are tempted to fall for fads, schemes or popular culture concerning the meaning and methods for achieving success in our lives.  Many of us have come to believe that success is about setting personal goals, and tracking our progress on those goals.  Others view success as a “life purpose” that we seek to accomplish.

Many of these perspectives contain important elements of truth, but many of them are also missing some very important elements.  By understanding these key factors of personal, professional, and professional achievement, we can learn how to create our own vision of success.

The first step on the journey toward our life’s goals and purpose is to create a clearer picture of what they look like.  Each person’s ambitions are unique, but many people share a common passion for some area of interest in their life, and a desire to pursue those interests.  When we develop a vision of the direction that we would like our lives to move, it frequently involves the ability to spend more time engaged in the activities that we enjoy.  This frequently leads us to believe that they key to success is simply to attain more of what we want.

More is Not Always More

The common conception that many people hold is that they will feel more fulfilled in their life if they can simply achieve more.  More money, a nicer car, a bigger house, more vacation, more time to follow their interests.  The implicit problem that we run into when thinking in the context of “more” is that our time is a finite quantity.  Each day only contains 24 hours, and there is only so much that we can fit into that amount of time.

Thus, the pursuit of more becomes a study in time scarcity.  Assuming that we are able to attain the additional things that we want, it is highly likely that they will create additional time commitments that we must undertake.  When these time commitments are added to our existing schedule, it frequently leaves us with more to do than we have time to do things.  This abundance of projects and scarcity of time frequently leaves us shorting the aspects of our life that are highly important (such as personal relationships) but not articulated on our sheet of goals.

What you Subtract is More Important than What you Add

The next level of insight in the attainment of success is to understand that our most important decisions are frequently not what to add, but what to take away.  The only way that we can avoid a permanent time crunch that leaves our friends and family out in the cold is to re-arrange our personal, professional, and financial priorities on a consistent basis.  This means that when we add something, we must be prepared to take something else away.

In the real world, trade-off decisions are a fact of life.  We cannot have our cake and eat it too.  There are decisions that must be made, and the way that we make those decisions will have a tremendous impact on our future.  The way that we can keep our life in balance is to continually monitor our balance of activities to determine when it is time to add something and when it is time to remove something or change the way we do it.

Success is an Equilibrium, Not an Achievement

What all of this ultimately means is that “real” success is not an achievement … it is an equilibrium.  It is a balance of things we want and things we do that deliver the most total happiness and satisfaction that we are able to achieve.  Unfortunately, there are very few success authors who are teaching this truism, and there are many people who are seeking success in the context of goals and achievements.

Granted, goals are very important.  However, goals are not the end … the are a means.  For example, many people profess a desire to run a marathon as a goal in their life.  What most people really mean by this goal is that they would like to adjust the equilibrium of their life in such a way that they can increase their level of fitness to a state where they can train to successfully run a marathon.  However, what this goal-setting process frequently misses is that it is possible to complete a marathon without being in optimal fitness (albeit at a slow pace), and that it is possible to achieve considerable fitness without ever running a marathon.

What happens when we place too much emphasis on the goals themselves is that the equilibrium can be lost.  The desire to run a marathon can come to dominate our thoughts and actions.  (Especially for Type-A folks)  In this way, the goals we are seeking can take on an obsessive nature that displace many of the other highly important aspects of our life in the single pursuit of a particular goal.

As we go throughout our lives, we should seek to keep our goals and ambitions in perspective so that they are viewed in the context of our life’s larger equilibrium.  This is the way that we can stay balanced and pursue the “real” success that is a (whole) life that we want to live.  The decisions that we make will all echo throughout our future, so it is important to choose wisely.

 

When traveling on the journey of business and life, many people have a natural inclination to structure their activities to avoid mistakes.  This tendency is quite rational, in light of the fact that most of us learn through our education to prevent mistakes whenever possible.  When going through school, we strive for a high grade point average . . . one mistake can blow the average.  When working at a job, we strive to be promoted . . . one mistake can ruin your career.  The incentives that we regularly face condition us to be perpetually risk averse because of the ever present possibility of failure.

The implicit problem of avoiding failure is that it frequently results in avoiding gain also.  Thus, in our desire to avoid moving backward, we also prevent ourselves from moving forward.  The important insight to internalize is that moving forward toward your goals in spite of mistakes is more important than avoiding mistakes altogether.  Entrepreneurs frequently back into this realization when they discover that there are so many things to do that they cannot possibly be done in anything remotely resembling a mistake free manner.  What frequently ends up happening is that the first area of focus is placed on the things that are most critical to sustaining and growing the business, with improvement and refinement done over time.  The contrary version of this concept is the perfectionist obsession that frequently grips people who work at the pleasure of a manager or executive.

Fail Forward

Many people hold onto a notion of success as a linear climb where one step begets another, which begets another, on and on until your goals have been achieved.  This is typical of the linear western thought patterns.  However, the way that we achieve the things we want isn’t always in a steady climb.  Many times we have to try things that don’t work, learn, try again, learn try again, learn and try again until we achieve our goals.  In the linear world, success is simply a process of building on top of what has already been done until the pile is high enough to reach your ambitions.  in the circular world, success is a winding path that we must discover through an uneven process of experimentation.

To many people, this feels like a maddening process.  The ambiguity and uncertainty of discovering the right decision can be very difficult to maintain.  It is impossible to know if success is simply waiting around the corner or whether it is many miles away.  The opportunity that you have been waiting for may be nearly upon you, or it may be disconnected by a vast expanse of distance and time.  This ferocious uncertainty leads many people to give up.

This is where the “Fail Forward” concept comes into play.  It is not reasonably possible to ensure that everything we do will always work out the way we intend.  However, it is possible to ensure that even if we fail, we learn something important that will help us to move closer to our goals and ambitions in the future.  It is inevitable that we will fall as we go throughout life.  However, falling forward instead of falling backward is a characteristic that can have profound impacts on your long-term success.

Gifts vs. Grit

Many people mistakenly believe that great success is solely the result of superior talent.  However, many studies have confirmed that the characteristic shared by elite performers in nearly every walk of life is that they have spent a tremendous amount of time honing and refining their skills.  Some have come to call this the “10 year rule” … stating that exceptional skill can only emerge after 10 years of continued, focused work and practice.  If elite skill can only be built with this much persistence, it stands to reason that “failing forward” is a critical part of this continued development process.

When people talk about the value of persistence, what they are really referring to is the willingness to push through difficulty, uncertainty, and failure to reach your goals.  Consistently moving forward, even if it does not always feel like your movements are taking you directly toward your goal is the key characteristic that separates the exceptional from the average.  In fact, it provides a significant degree of comfort to those of average abilities, because it shows that an abundance of perseverance can frequently overcome a deficiency of talent.  In many cases, it is talent that starts a person on the path toward elite skill, but it is continued persistent work that takes them to their goal.  If you lack talent, you can substitute consistent, focused effort.

It is truly unfortunate that we have become so conditioned to avoid mistakes.  It is the mistakes that allow us to learn and grow, and ultimately what lay the foundation for greater achievements.  This effect pervades our personal, professional, and financial lives.  It is a dichotomy that many people will need to overcome if they are going to achieve their goals and ambitions.

Fundamentally, this dichotomy comes down to a “Job” mentality of avoiding mistakes, in contrast to an “Entrepreneur” mentality of discovering the ingredients necessary for success.  In the context of our personal, professional, and investment endeavors it is frequently more beneficial to ‘fall forward’ than to ‘hold back’ . . . especially in consideration of the fact that our financial future is becoming more uncertain, and it is becoming less and less likely that our employer, government, or 401k will be able to provide for our future.  Thus, it becomes the responsibility of each individual person to ensure that they are consistently moving forward.

 

For both individuals and business owners, negotiations can prove to be one of the most difficult and most important things that we do.  The largest purchases that most people make frequently involve very intense negotiations.  The ability to gain employment, and earn promotions is also frequently influenced by your ability to negotiate.  Negotiation has a very significant impact on personal, professional, and financial success.  Because of this, it is very important to understand the parts of negotiations that are the most important, along with the parts that are frequently misunderstood.

To many people, the idea of negotiating brings up images of aggressive arguments where both sides attempt to prevail against the other in a pitched battle for power where one side wins and the other side loses.  Another paradigm of negotiation is one where a “win-win” paradigm requires that no deal be made unless both sides realize significant benefits.  The truth of negotiation exists in-between these opposite visions.

Best Alternative To a Negotiated Agreement

The term BATNA, meaning “Best Alternative to a Negotiated Agreement” was coined by Roger Fisher and William Ury of Harvard University, and incorporates many of the ideas published by John Nash in his work on Game Theory.  The idea incorporated in BATNA is that our ability to negotiate is heavily influenced by our alternatives if the negotiated agreement does not occur.

One way to think about BATNA is to imagine that you’re looking to sell a car.  If you have one buyer lined-up who will pay $2,000 for the car, then you will be very unlikely to accept less than $2,000 from anybody else unless you have doubts about the original offer.  Your best alternative is selling the car for $2,000 and that places you in a position of power to confidently list the car for sale at a higher price. Alternatively, if you need to raise cash very quickly and have no buyers lined-up, then you may need to accept $500 or less from the first able buyer whom you come into contact with.  Thus, your best alternative exerts a tremendous degree of influence over your decisions.

How BATNA Influences Our Idea of Fairness

One of the enduring ideas of humanity is the notion of fairness.  The situations that most people perceive as being unfair are those where one side has a significantly better BATNA than the other.  An example of this is if you are walking across a desert, parched of desperate thirst, and run across a truck who offers to sell you a 20 ounce bottle of water for $5,000.  The natural response to this scenario is that the transaction is supremely unfair since the cost of that bottle to the seller is approximately one dollar.  In this situation, the BATNA of the person walking through the desert is a painful death of dehydration.  Alternatively, the BATNA of the seller is their lost time and the expense of driving across the desert to find somebody walking whom they can sell water.

The reason why this feels so unfair is because the alternative of the person walking is death, while the alternative of the person selling the water is simply wasted time.  However, this transaction still makes both parties better off, even though it feels patently unfair.  If the truck were not present to sell the high-priced water, the person walking across the desert would suffer a painful death.  Even when the person driving the truck engages in what is frequently called “price gouging,” he still delivers a valuable service that is critically important to the person in the desert.  Thus, in what seems to be a blinding paradox, some of the transactions that appear to be the most unfair to the “little guy” are actually the most beneficial.  The reason for this is because when the best alternative for the “little guy” is worse that the seemingly unfair exchange, then they are far better off with the deal that feels severely slanted against them.  Thus, by using legislative power to prevent exchanges that feel unfair, it is possible that we are actually condemning the people whom we think we are helping to suffer an even worse outcome.

How BATNA Influences our Negotiations

Another important thing to consider in regards to BATNA is its impact on our personal, career, business, and investing decisions.  Within this insight is two levels of distinction.  The first is that our alternatives influence our decisions.  The second is that our perceptions may differ from reality, and result in decisions that are sub-optimal.  In short, it is very easy to both over-estimate and under-estimate our best alternative.

• Why our Alternatives Matter

  • The simple reason why alternatives matter so much is because we can be more confident in refusing low-quality outcomes when we have a better alternative.  If you are highly educated and experienced in a field that is in demand, you do not need to take the first job offer that comes your way.  If you are able to re-locate with ease, you can be more flexible in finding a new job that allows you to advance more quickly.  If you are a business owner who already has a key customer that generates sufficient revenue to cover your costs, you can negotiate pricing with new customers from a stronger position.  If you are able to assemble investment deals that generate a high rate of return, it will allow you to walk past the traditional financial instruments that are sold for retirement planning.
  • In short, the decisions that you make are bracketed by the alternatives that you possess.  By increasing the quality of your alternatives, you increase the strength of your decisions.  Thus, the ‘real’ way that people achieve success is not just through the decisions that they make, but through developing the alternatives that allow them to make high-impact decisions in the first place.  Most of the best investments require some degree of capital.  If you are unable to pay the monthly rent, high-impact investing is not an option.  Regardless of how educated you are in decision making, those decisions will not become available until you influence the underlying alternatives through preceding actions and decisions.

• Over-Estimating the Alternatives

  • One of the thing that frequently happens in high-stakes negotiations is that one or both sides will over-estimate their alternatives.  This typically results in the adoption of “tough-guy” negotiation techniques, and can create very large problems if the deal falls apart and the assumed alternative do not materialize.  Typically this situation occurs when negotiators fail to invest sufficient research into their realistic options.  The most frequent occurrences of this effect are when one side focuses on the other side’s lack of options more than their own situation.
  • For example, the union frequently notes that management will be in a pinch without labor.  Similarly, management frequently notes that the union members will be in trouble without their wages.  The truth is that both labor and management suffer from a prolonged work stoppage.  It is important to avoid taking your eye away from your own alternatives by excessively focusing on other people’s alternatives.

• Under-Estimating the Alternatives

  • Another way that people can run into trouble is by under-estimating their alternatives.  When this happens, people will be likely to take “the first thing that comes along” instead of searching for their best option.  Typically, this situation occurs when people have a low opinion of themselves and their abilities.  This is not to say that ego and arrogance are in order, but that an honest assessment is critical.

In the end, understanding our alternatives is a critical part of optimal decision making.  It is important to make an honest assessment of what our options look like so that we can avoid the errors of both over-estimating and under-estimating the quality of our alternatives.  This is one of the fundamental keys to negotiating success in our personal, professional, and financial life.

 

Life can frequently feel out of control with a myriad of commitments, deadlines, and things that need to be done immediately.  Each of us have a list of things we would like to accomplish that exceeds our available time, effort and energy by a considerable margin.  In this situation, it frequently feels like we cannot afford to stop moving, because every minute gone by is one less minute to accomplish our goals and ambitions.

 

Most of us are well aware of the popular statement that appearances can be deceiving.  Upon deeper analysis, it turns out that this kitchen table wisdom has more applications than frequently meet the eye.  In all walks of life, from personal to professional and financial, we should be careful to avoid being overly swayed by outward appearances.  The reason for this is because initial appearances frequently do not tell the whole story.

For every “what” that we see, there’s a “why” it got that way and “how” it happened.  For every “hot” person that is at the dance club, there is a story behind how they arrived where they are at the moment.  For every “get rich quick” opportunity, there is a sequence of events that brought this “opportunity” to your attention.  That flashy, high-paying job that everybody is gunning after may carry expectations and responsibilities that are not immediately evident.  For everything we see that looks and sounds too good to be true, there is a story or a narrative that has not yet come to our awareness.

Consider if you see a highly attractive member of the opposite sex . . . what sacrifices have they made to be so physically attractive?  It could be that the person is naturally attractive, or it could be that they have gone to great lengths to achieve a certain level of attractiveness.  It could also be that their physical appearance is a a form of compensation for greater personal insecurity.  There is no way of knowing the whole story from outer appearance, and therein lies the danger.

If you see an opportunity to become fabulously wealthy in a very short period of time, consider why it is that this opportunity is being shared with you?  If such a deal does exist (and my experience leads me to believe that they do), then why share it with a stranger?  This is why I am especially leery of financial advertisements that I see on television.  If somebody is paying to broadcast an ad on TV, there must be enough profit for them so that they an dissipate the costs of advertising.  That either means the deal is REALLY good or that it is a shill to lure people who will part with their money.  (my experience leads me to believe it is the latter)

When you see highly compensated professionals like executive vice presidents, hedge fund managers, or partners in a law firm, what do you think of?  Most people think of a tremendously high salary, and fantastic amounts of power over your subordinates.  However, many jobs such as this require very large time commitments.  The spillover effect of spending 70 to 90 hours to week working can be dire.  There are many people in highly demanding jobs who have gone through multiple marriages, have children scattered across multiple households, and must commit a large portion of their income to child support and alimony.

Ultimately, there are many people who fall into the trap of taking appearance at face value every day.  From the dating scene, to investments, to work opportunities, there is frequently more to what we see than what we see.  Each person, each opportunity, each job has a story behind it.  There is a unique series of events that have brought everything we come into contact with before us.  This sequence is impossible to determine from a simple observation of outward appearances.  This makes it easy for us to fall into the trap of chasing after an imaginary reality that is generated from a combination of outward appearances and wishful thinking.  In the end, we must all beware of appearance, since there is frequently more to the story than we initially see, and it is always impossible to tell whether what we see is really what we are seeing when we first see it.

 

There are many times in business and life where problems are approached in an ‘inside out’ fashion.  This phenomenon is known as “A solution looking for a problem” and frequently manifests itself in a situation where key decision makers use any problem that comes by as an excuse to implement their personal agenda.  In most cases, this personal agenda has nothing to do with the problem that it is being proposed to solve.

This behavior pattern is particularly dangerous in regards to government activities, since the knee-jerk response to almost any difficulty is to increase the power and scope of government.  It should be of no surprise that the people who are in charge of government happen to benefit handsomely when government becomes more powerful.  This generates a perpetual wheel of ‘solutions’ that are seeking problems . . . even though the proposed solutions frequently fail to tangibly accomplish anything outside of making the politicians who write the laws more powerful.

And in a strange twist of irony, this sentiment is also held by many people whose minds are continually dominated by thoughts of conspiracy.  It is no coincidence that all events (regardless of what they happen to be) are taken as evidence of a conspiracy to the hardened disciple of such theories.

This behavior is also known as the ‘confirmation bias’ and results when a person approaches situations looking for a specific answer to confirm a belief or hypothesis.  This will frequently compel people to only accept information that supports their belief and disregard any information that contradicts it.  This phenomenon tends to create ever increasing amounts of polarization as all people become increasingly convinced that they are absolutely right and everybody who disagrees with them is absolutely wrong.

In all situations, it is critically important to understand that we do not necessarily know the answer to a problem before it is presented.  It is not easy to separate out personal feelings from our observations, but failure to do so will never fail to enslave people by their opinions.  We cannot expect to see the real world if we refuse to admit that our own opinions may be wrong.  We cannot apply one-size-fits-all solutions and expect to achieve anything better than failure.  Success requires solutions of a higher quality.

 

Life is full of decisions and difficulty.  Many people affectionately refer to this phenomenon as ‘drama’ to depict the similarities between life’s situations and television soap opera’s.  One of the noted tendencies for many people is to nit-pick on small details and create drama about things of very minimal importance.  When embroiled in the midst of such activities, many people get so wrapped up in their emotions that they lose perspective about the relative importance of what their angst is directed toward.

This phenomenon is frequently referred to as “Majoring in the Minors” as a clever depiction of people with a tendency to spend a majority of their time on very minor things.  Unfortunately, this phenomenon frequently spreads out to personal, professional, and financial aspects of our lives.  How many times have do people obsess over small perceived injustices while neglecting their interpersonal relationships?  How frequently do people disparage their boss or manager for treating them in a manner they believe to be unfair instead of focusing on ways they can produce value?  How often do we hear news stories about the state of social security and medicare versus practical advice on becoming self-sufficient so that such ‘fall-back’ programs are not needed?

When we find ourselves in the middle of an emotionally charged situation, it is frequently difficult to regain the perspective necessary for recognizing these situations.  This impact can compound on itself when multiple parties become emotionally charged at the same time.  In this case, both sides will be attempting to prove the other person wrong without lending any thought to the importance of the point that is being argued.  I have found that this phenomenon manifests itself most frequently in matters of religion and politics, since many people have very strong opinions but very little ability to influence the opinions of others.

In the end, it is critical for each of us to recognize whether we are engaged in priorities of great importance or gratifying our emotions by Majoring in the Minors.  Maintaining this perspective is not always easy, but it never ceases to be beneficial.  As each of us go through business and life, it is to our advantage to engage in consistent self reflection to ensure that our perspective is clear and our priorities are straight.

 

One of the great disservices that has been created by contemporary business literature is an enduring impression that ‘simple’ and ‘easy’ are the same thing.  Many gurus and seminar spokesman will repeatedly claim that success is simple, with the unsaid assumption being that it’s so simple you can achieve it with minimal effort.  The thing that we need to keep in mind when we are thinking about the laws of success and our personal achievement is that simple things are frequently quite difficult.

The formula for weight loss is exceedingly simple . . . just eat less and exercise more.  The fact that this system happens to be simple doesn’t mean that it will be easy to accomplish.  The preponderance of fad diets serves as a testament to this fact, since each attempts to take some new angle on convincing people that they can accomplish their health and fitness goals without developing the discipline that is necessary to turn away tasty food and regularly exercise.

The purpose of this illustration is to drive home the point that success is derived from personal discipline more than any formula or system that is available for purchase from a seminar spokesperson.  This is not to say that one should not pay attention to the laws of success, or that the formulas for success are necessarily fraudulent.  What it means is that each of these will be completely useless without the addition of personal discipline.

In this case, what is simple frequently proves to be very hard and what appears to be complex can frequently be the path of least resistance.  The reason for this is because simple frequently dictates action while complicated situations provide a ready alibi for inaction.  In order for each of us to achieve our goals and ambitions, we must develop the discipline to consistently do simple things and avoid getting lost in the complexity of situations that can derail us from achieving our ambitions.  In the end, each of us are responsible and accountable for our own success.  In many cases, this path is simple . . . however, it is almost never easy.

 

As we go throughout life, each of us will work with a wide variety of professionals.  Their specialties can span across many disciplines ranging from financial and legal to medical and psychological.  In many of these cases, the people we work with possess special skills and knowledge that are critically important to our personal and financial wellbeing.  Because of this, it is very important to ensure that you are working with the best when you establish professional relationships.

The irony of working with the best is that it is frequently no more expensive than working with somebody who is less skilled.  For example, when conducting real estate transactions, the buying realtor commission is frequently paid by the seller, which typically runs somewhere between 5% and 6% of the purchase price for the home.  The important part to note is that it will cost the same amount of money to work with an outstanding realtor as it will to work with a shoddy one.  Thus, it makes quite a bit of sense to seek out a professional who is highly skilled.

When it comes to other types of specialties such as tax accountants or legal professionals, there is much more variation in the rates that are charged for services.  Every April, there are frequently banner signs advertising “Rock Bottom Prices” for tax preparation.  What few people stop to consider is whether the person preparing their taxes will be finding ways to reduce your tax burden to the legal minimum, or simply burn through your 1040 so that they can get to the next name on the list.  In most cases, the gains you will realize from working with skilled professional will exceed the additional cost many times over.  These gains can come in the form of lower taxes, finding better real estate deals, protecting your family from legal risks, or experiencing better health and wellbeing.

It is important to note that not all people charging premium prices are highly skilled.  Paying a premium for lowly skilled people is an exercise in foolishness that is best avoided.  However, for those who actively seek out the best professionals there are tremendous gains to be realized for yourself, your family, and future generations.  After all, you’re going to be working with people anyway . . . so you might as well work with the best.