Have you ever met someone who knew the outcome of a situation before it even happened?
They are neither psychic nor capable of seeing the future. Instead, they recognize and learn patterns, a skill that billionaire Michael Rubin says is implemented by very successful people.
Rubin is the CEO and founder of sporting goods retailer Fanatics, a company that has helped him achieve a net worth of $11.5 billion. Much of his success in building and running Fanatics, which was valued at $31 billion after a fundraising round in 2022, was due to pattern recognition, he recently said on life coach Jay Shetty's “On Purpose” podcast.
“It's a really important skill in business because I think it predicts the future,” Rubin said.
As an example, Rubin explained how he screens potential employees – by collecting data beyond their resumes and interviews.
“If I like them, as soon as they leave, I go out and start calling people I knew we had in common to identify patterns. For me, 50% is the interview and 50% is what I learn behind the scenes.” Rubin said. “Someone could blow me away… but you find out that people don't like working with them. Or you find out “This person was a bit of an understatement, but she’s a beast.”
Whether he's making business decisions or playing blackjack, Rubin says he relies on the ability to make good decisions: “Pattern recognition is everything. I use them in everything I do.”
An ability to avoid potential problems
The human brain is constantly processing patterns, helping you understand information, languages, and even your own imagination. Relying on this ability to avoid potential conflicts and negative consequences will help you think more critically.
Rubin isn't the only one who swears by this ability. At Berkshire Hathaway's annual meeting in April 2016, CEO Warren Buffett discussed a decision – which he said was based on pattern recognition – that he made to avoid investing in the pharmaceutical company Valeant Pharmaceuticals, now known as the Bausch Health Companies .
Buffett said he was advised to buy Valeant shares: The company used cost increases to generate profits, and investors saw healthy returns as the stock price soared. But despite the hype, Buffett said he saw warning signs in Valeant's “deeply flawed” business model that showed him it wasn't designed for long-term sustainability.
His intuition was correct. A month before the Berkshire meeting, Valeant CEO Michael Parsons resigned from his position. Lawmakers soon accused Valeant of overcharging patients, and within 30 days the drugmaker's shares fell 85%.
“If you have an intelligent man pursuing a course of action that gets you on the front page, that's going to get you in trouble at some point…patterns that often end badly but look extremely good in the short run,” Buffett said.
How to read between the lines
There are several ways to improve your pattern recognition skills. You can play games like chess and checkers, or simply practice working with people who have different perspectives and insights.
You can also take a more analytical approach, as leadership coach Ganes Kesari recently posted on LinkedIn.
“Pattern recognition is both an art and a science. First, define the business goals and challenges to be solved. Then comes the data collection. Collect diverse data sets and apply statistical and/or advanced analysis tools such as AI algorithms to process this data,” wrote Kesari.
Then have an expert examine the patterns “to ensure they are not mere coincidences but useful insights that can be acted upon,” he added.
“No one becomes a pattern recognition expert overnight, but finding ways to practice it every day will make you more successful,” Rubin said on the podcast.
“You have to recognize patterns in everything you do,” he said.
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