article thumbnail

Untangling Skill and Luck

Harvard Business Review

When we enjoy a good outcome due to luck, we are naturally inclined to chalk up our success to skill. We will define skill as "the ability to use one's knowledge effectively and readily in execution or performance" and luck as "events or circumstances that operate for or against an individual." The first reason is psychological.

Skills 15
article thumbnail

What If Companies Managed People as Carefully as They Manage Money?

Harvard Business Review

A veritable alphabet soup (ROA, RONA, ROIC, ROCE, IRR, MVA, APV, and the like) exists to measure our financial capital. Historically, successful investment of financial capital can make someone’s career. But today’s great CEOs need to be equally great at managing human capital. How can we manage human capital better?