How the formula “E+R=O” can increase your profits and business performance instantly

event + response = outcome








I am often asked by clients and friends alike- “What is the #1 way to instantly improve a business’ profitability and sustainability in the uncertain economic times?


While I usually would say things like lead generation, constant follow up on enquiries, having a sales funnel in place etc, today I wanted to share something else that i feel would have a profound effect on the performance of your business.


I take no credit for this idea though. It was shared by a Dr Robert Resnick, a psychotherapist in the Los Angeles area. He came up with a simple formula.

E+R= O

(Event + Response = Outcome) 


Event refers to anything that occurs either directly to you, or has an effect on you indirectly. For example, if you lost your job at the age of 35, that is an event(direct). If a spouse decides to leave you, that is an event.(direct) If the economy decides to take an untimely tumble, affecting your hiring policies and profitability, that is also an event. (indirect)

Now, an event is strictly a non-variable. (or it may be, depending on your religious views, which we shall not discuss today)

According to the formula above, how you RESPOND to an EVENT, will determine the ultimate OUTCOME.


Since EVENT is not controllable by you, you should be seeking out ways in which you CAN determine the outcome, by manipulating components within the formula Dr Resnick provided above to change the outcome to favour you.


Let’s see.

Event is not controllable or can be manipulated.

Outcome is simply an end result, and this means this by itself is not able to be manipulated directly.

Just as we would turn a tap clockwise to turn off water supply rather than taking a brute approach of stuffing the tap opening to prevent water outflow, surely there must be a similar aikido-esque way of determining the outcome in your favour.

The only remaining component that is controllable then, is the RESPONSE to the event.


You either like the outcomes, or you don’t.

If you do, there is nothing you should change in future, if the same variable arise.


However, if you don’t like the way your business or your life is affected by the recession etc, then you must act upon it.


You can either 1)Blame the event for causing the hardship you suffered.

If you did this, it means you will choose to blame the fact that you were born poor, ugly, in a bad neighborhood, that you had learning deficiencies, your siblings had it better than you, the political climate, the government policies, and the fact that your neighbor’s dog irritates you while you are trying to work at home.

If you did the above, it means that you wholly blame the event for causing the outcome, that you felt that you were powerless to change it at all.

Well, if you were right, then people who DID succeed despite overwhelming adversity will never have achieved what they achieved because THEIR shortcomings were much more than yours.

Steve Jobs would have blamed his lack of a Harvard education of causing him to fail. Did he? No, of course not. He went on to become one of the most influential people of the 21st century. (I typed this from a MacBook, by the way)

If these great people did not blame their limiting factors or events for their failure, or success, why should you?




You could choose to change the way you react to the cards that nature dealt to you.

Change your response (R) to the event (E) – the way things are, – until you get the outcomes (o) that you want.


You could change the way you think, the way you communicate, your behaviour towards others and adverse events for example.

I’ll give you some examples.


The next time you hear of someone losing their job, patiently observe- Do they mope around at home bemoaning their bad luck, or do they actively look at ways in which they could upgrade themselves and make themselves more attractive to the employers out there in the jobs market?

When someone fails an exam, do they blame how difficult it was, or do they take proactive steps to study harder with the assistance of friends and lecturers, to prepare for the next “killer exam?”

When their business fails, do they wholly blame it on the economy, on competition coming in from China, India etc, or do they read more business books and try to pick up new skills invaluable to their future business such as marketing, sales, and customer service?


If you don’t like your outcomes in life, try changing your responses.

If your business is to survive the next recession or governmental policy or competition from other competing countries etc, you have to keep in mind the following advice by Jack Canfield.


“I’ve heard there’s going to be a recession, and I have decided not to participate.”

Quick question- In the next recession, will you roll over and play dead and blame everything else than yourself, or are you going to sharpen your business skills to be ready for whatever the next recession will throw at you?