Li Ka-shing
Ninety per cent of the time, thinking about failure
Think about losing before winning
Li Ka-shing, interviews, around 2006
The richest man in Hong Kong describes his own split of attention, and it is not what you'd expect.
What actually happened?
In interviews Li Ka-shing has been blunt about it: ninety per cent of my time I spend considering failure. His image is a mechanical watch — one gear slightly faulty and the whole watch stops, and a company is the same. From his plastic-flowers days the habit was set: before a project starts, work through the ways it can fail. When success comes it needs very little thinking about. Beside it runs his rule on cash: a company can go bankrupt while profitable. Through decades of expansion his gearing stayed low.
Rehearsing failure is insurance on the decision
Ninety per cent on failure isn't pessimism, it's a division of labour: failure modes are finite, listable and preventable. Having gone through each and set a gate, you can spend the remaining tenth committing hard. Optimism without that step stakes the company on luck.
The most valuable page in a project review isn't the market size. It's the list of ways this dies. Fewer than five means nobody has thought yet.
Find the gear that stops the whole watch
The watch image is precise about 'one gear'. What sinks a company is often not the main business but some unremarkable connector — a guarantee given, a maturity mismatch, one key person. So rank risks by whether they stop the watch, not by how big the business is.
Healthy companies die of a guarantee made for someone else, or a licence that wasn't renewed.
Cash flow is the floor under every failure case
Every rehearsed way of dying converges on the same place: is there enough in the account to get through. So his answer isn't don't take risks. It's make sure no single failure can cut the cash. Low debt isn't caution. It buys more chances to be wrong.
Ask of an aggressive plan: can its worst outcome reach the cash artery? If not, be aggressive. If so, slow down even the safe version.
How do I use it today?
Where you are: a project looks strong and the team is uniformly optimistic.
Ask first: has the list of ways it dies been written? Which gear stops the watch? Does the worst case touch cash?
Where it goes wrong: turning rehearsing failure into only rehearsing failure and never moving; or covering business risks and missing the small gears — guarantees, mismatches.
Lines to keep
Ninety per cent of my time, I spend considering failure.
One gear with the slightest fault and the watch stops.
A company can go bankrupt while it is profitable.