THE
80/20 INDIVIDUAL
How to
Accomplish More by Doing Less - The Nine Essentials of 80/20 Success at Work
Book Author - Richard Koch
Book Review by - Sanjib Dutta
Faculty Member, ICMR Case Studies and Management Resources
Abstract:
The 80/20 Individual is a sequel to the ‘80/20 Principle’ written by Richard
Koch. The 80-20 concept refers to Italian economist Vilfredo Pareto's (1848-1923)
principle that 80% of results come from 20% or fewer causes. The 80/20 Principle
applies to ideas, individuals, customers, partners, technologies, products,
suppliers, and capital. The author explains how the 80/20 Principle is enabling
individuals to become 80/20 people.
About the Author:
Richard Koch, the author of the international bestseller The 80/20 Principle and
The Power Laws of Business, is a highly successful entrepreneur whose ventures
have included consulting (LEK), Personal organizers (Filofax), hotels (Zoffany),
restaurants (Belgo), and premium gin (Plymouth). Formerly he was a consultant
with The Boston Consulting Group and a partner of Bain & Company.
There is a new way to create wealth that is better than
the traditional route of
managerial capitalism, and creative individuals are at the heart of the new
revolution. The rise of the individual can be seen in the growth of democracy,
the
free market system and increasing individual mobility. The new revolution
follows one simple principle: the 80/20 Principle. An 80-20 person's creative
powers are apparent rather than submerged. An 80/20 person is successful because
of an exclusive focus on the powerful forces operating in any arena.
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80/20 individuals are found everywhere, in politics,
sports, media, entertainment and business. A few such individuals in the
field of business include Jeff Bezos, Richard Branson, Warren Buffet and
Larry Ellison. These individuals concentrate on few things that work
best for him. By following the 80/20 Principle, they multiply their
effectiveness. All the 80/20 individuals have latched on to a powerful
idea and gave it a unique new twist to create a very specialized and
profitable social or business enterprise that has enriched the world and
their own lives. The economic power of the creative individuals can be
borne out of the fact that the west has an ever-rising number of
millionaires and billionaires. This is because of the economic power of
creative individuals, and not because of the power of organizations.
The growth of an economy can be linked to the growth of small companies
and behind the success of every small company is an individual or small
group of individuals. Individuals have always exerted enormous
influence. Today, much less capital is necessary to create really
valuable business. Organizations are no longer vital; and ideas, which
cost nothing, are becoming the most important way to create new value.
Microsoft, which did not exist 30 years ago, is worth $300bn today. A
few very creative individuals have made Microsoft. |
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The success of Amazon, Apple, Oracle and Virgin can also be
attributed to the few highly creative individuals. To become an 80-20
individual one has to be true to himself. The self here refers to really
distinctive and productive self, a person’s unique self, his imaginative, positive and creative self. The 20% or less of oneself contributes more than
80% of his impact and happiness. People in top jobs are often unusual
characters with a few fantastic strengths, and many fit the profile of what
Sigmund Freud called narcissistic.One should find the 20% that he is outstandingly good at and ask other people
to perform the rest. It is much easier to identify the 20% one is outstandingly
good at than the full 100%. The author includes a “20% spike questionnaire” in
the book (refer pp 41-42) to help people find their strengths. The answers
should be checked with several people who knows the person well and whom he can
trust to give honest feedback.
There are abundant business ideas and opportunities, but the idea of the 20%
spike implies that one should not look for any old opportunity, however great
it may be. One should look for the specific opening that he or she can exploit
better and more creatively than anyone else. One should also identify the
“vital few” ideas that can bring success. The ideas should also fit the 20%
spike. One has to take those ideas and make better use of them than anyone
else. One should also find the vital few profit forces that can work for him or
her, enlist capital and enlist great individuals.
Coming to think of the vital few customers, one should follow the follow steps:
Define the vital few customers: what type of customers would you want? While
identifying the vital few super profitable customers the following dimensions
should be included: size of customer, longevity of customers, typical purchase
quantity per order, main product or service bought, breadth of purchase, the
personality of customers. Identify the customers with the highest ratio of
value to cost: the same product or service may have different value to
different customers.
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This case study is intended to be used as a basis for class discussion rather
than to illustrate either effective or ineffective handling of a management
situation. This case was compiled from published sources.
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