The 80/20 Individual: How to Build on the 20% of What You do Best - Hardcover

Koch, Richard

Hardcover

ISBN 10: 038550957X ISBN 13: 9780385509572

Publisher: Doubleday Business, 2003

Synopsis

A new 21st century individualism is overtaking “corporation-as-king” capitalism, transforming the way we work and live. Today, real power rests in the hands of creative individuals like Bill Gates, Warren Buffett, Oprah Winfrey, and Steven Spielberg, who are changing the world one great idea at a time. In THE 80/20 INDIVIDUAL, Richard Koch reveals the secret of their success: they discovered what they do better than anyone else and rode it for all its worth.
In this inspiring sequel to his classic bestseller THE 80/20 PRINCIPLE, Koch shows how to maximize success in your career and life by using the proven principle that 80 percent of changes in the world result from the most powerful 20 percent of actions and ideas. He’ll show how to use your own powerful “20 percent spike” – your most creative ideas and unique skills – to measure the amount of value you bring to your employer, clients or customers. For most people, there is a huge disparity between their intrinsic value and the compensation they receive for their efforts. THE 80/20 INDIVIDUAL shows how to narrow that gap.
Drawing from his own success as an entrepreneur, as well as from the stories of scores of companies and individuals who have flourished as a result of an 80/20 mind-set, Koch offers a step-by-step method to remodeling a career or existing business, or creating a new one – one that most benefits you. He provides valuable insights on finding 80/20 partners, hiring 80/20 employees, and running an 80/20 business.
By building a team that supports your efforts and excels in areas where you lack experience or knowledge, you’ll be able to focus your time and energy on your strengths. Productivity and profits will soar because you’ll be doing what you do best and enjoy the most. By using the 80/20 strategies outlined in the book, you can take control of your career and financial future.

About this title

About the Author

RICHARD KOCH is the bestselling author of THE 80/20 PRINCIPLE. An extraordinarily successful entrepreneur, his ventures have included consulting for hotels, restaurants, personal organizers, and the distilling industry. A former consultant with The Boston Consulting Group and former partner of Bain and Company, he currently lives in London, England.

Excerpt. © Reprinted by permission. All rights reserved.

chapter 1

How to Be an 80/20 Individual

Take away our twenty most important people, and I tell you we would become an unimportant company.
--Bill Gates, chairman, Microsoft
Introduction

This book is about a revolution that is changing the lives of individuals, individuals who are changing the world. I call these revolutionaries "80/20 individuals," people and small teams who use the 80/20 principle to build businesses, and fuel their careers. You may already be an 80/20 individual without knowing it, but if you are not, you have everything to gain by becoming one.

The 80/20 Principle, my earlier book, struck a chord with many of readers by answering two questions:

*How can I use the 80/20 principle to raise the profits of my corporation?

*How can I use the 80/20 principle to be more effective personally?

This book answers a quite different question:

*How can I use the 80/20 principle professionally, to create my own wealth and improve my well-being?

This is a book for individuals at work. I explain how you can become much more successful in your career by transforming any business. Whether you are an entrepreneur, a manager, an executive, a worker, or unemployed, you can use the step-by-step method described to remodel an existing business or create a new one--one that most benefits you and your close associates. My objective is to help you first, your customers second, and corporations only if helping them helps you.

The world belongs to individuals, not to corporations. And by using the 80/20 principle to accomplish more by doing less, you can turbo-boost your career.
A Brief History of the 80/20 Principle

In 1897, Italian economist Vilfredo Pareto (1848-1923) noticed a regular pattern in distributions of wealth or income, no matter the country or time period concerned. He found that the distribution was extremely skewed toward the top end: A small minority of the top earners always accounted for a large majority of the total wealth. The pattern was so reliable that Pareto was eventually able to predict the distribution of income accurately before looking at the data.

Pareto was greatly excited by his discovery, which he rightly believed was of enormous importance not just to economics but to society as well. But he managed to enthuse only a few fellow economists. Although he could write lucidly on less momentous subjects, his explanation of the "Pareto principle" lay buried beneath windy academic language and dense algebraic formulae.

Pareto's idea became widely known only when Joseph Moses Juran, one of the gurus of the quality movement in the twentieth century, renamed it the "Rule of the Vital Few." In his 1951 tome The Quality Control Handbook, which became hugely influential in Japan and later in the West, Juran separated the "vital few" from the "trivial many," showing how problems in quality could be largely eliminated, cheaply and quickly, by focusing on the vital few causes of these problems.1 Juran, who moved to Japan in 1954, taught executives there to improve quality and product design while incorporating American business practices into their own companies. Thanks to this new attention to quality control, between 1957 and 1989, Japan grew faster than any other industrial economy.

In the United States and Europe in the 1960s, the Pareto principle became widely known as the "80/20 rule" or "80/20 principle." While it is not wholly accurate, this description was snappy and influential. Engineers and computer experts began to use the principle routinely.

The 80/20 principle is an empirical "law" that has been verified in economics, business, and interdisciplinary science. It states that 80 percent of results flow from 20 percent of causes. In other words, most of what exists in the universe--our actions, and all other forces, resources, and ideas--has little value and yields little result; on the other hand, a few things work fantastically well and have tremendous impact. There is no magic in the 80 and the 20, which are merely approximations. The point is that the world is not 50/50; effort and reward are not linearly related.

Most of the universe consists of meaningless noise, which can drown out those few forces that are tremendously powerful and productive. But if you isolate and harness those powerful, creative forces within and around you, you can exert incredible influence.

In 1997, I wrote The 80/20 Principle,2 the first book on the subject. I showed how the principle could be applied not merely to help corporations drive business results, but also to help individuals improve their lives. I explained how to become effective or happy by realizing the importance of just a few isolated people or things. If you concentrate on the few that work best for you, you can get what you want. You can multiply your effectiveness, and even your happiness.

This idea broke new ground, since nobody had previously linked the principle to individual fulfillment. It struck a chord; as many readers around the world discovered, the 80/20 principle is an extremely useful way to get more out of life.

This new book, however, has a very different theme. The 80/20 Principle showed how companies could use the "law" to drive business results and how people could use it to improve their personal lives--but not their professional lives. The 80/20 Individual demonstrates that the 80/20 principle is liberating and powerful, a practical business tool that individuals can use to increase their output and creativity in every aspect of their business and career. The link between the application of the 80/20 principle and an individual's role in creating wealth is one that has never been made before.
Value Comes from Growth

The most interesting and valuable part of business is not the maintenance of existing operations: doing efficiently today what we did yesterday, in the same way we did it yesterday. If every organization maintained the status quo, the economy would never grow.

Growth is more important. Growth means creating something new and valuable. Growth is ultimately driven by individuals and small, self-selected teams of individuals, operating both within established corporations and in new ventures.

The most formidable weapon for growth in business is the 80/20 principle, creatively applied by individuals and small teams of individuals. With the 80/20 principle, people can leverage the most powerful forces around them--tangible, but especially intangible ones--to dazzle the world and provide customers with much more of what they want for much less of what they wish to conserve (money, resources, time, space, and energy).
80/20 Individuals in Organizations

Individuals are usually only partly aware of what they could do to create wealth. They may also be unaware of what they are already doing. In this book you will encounter several people who are creating enormous wealth for others, without realizing it. They are already 80/20 individuals, but they are not yet reaping the rewards appropriate to their creativity. They think they are cogs in a corporate machine, while in reality they are at the heart of wealth creation and economic growth.

Even if you work for a large or prestigious organization, if you create something that reflects your individuality and your ideas, then you are the primary wealth creator. Usually, your corporation keeps most of the wealth that you create. However, once you realize the disparity between the value you create and what you get back, you can narrow the gap.

Those who can create wealth--and know that they can--are able to dictate their own terms. Wealth is a means to happiness, but it is not the main one. What most people want is control over their lives. They want the ability to choose how they live: what work they do, the way they interact with friends and colleagues, the quality of their personal relationships, the way they view themselves.

What you gain as an 80/20 individual is the right to control your life: your work life, your personal life, and the intervening spaces where they collide or mesh. For example, your understanding of the 80/20 principle can allow you to strike a completely different deal with your current employer.

Many 80/20 individuals can be partly inside and partly outside their organizations, retaining contact and continuity with colleagues while also embarking on side ventures. For many 80/20 individuals these hybrid arrangements are greatly superior to the traditional alternatives: either staying put and being exploited as an employee or starting a new business from scratch.

My premise is simple--if you add great value to your organization, know that you do, and can demonstrate how, you can reasonably insist on setting your own agenda, goals, and rewards because you will always be creating more value than you receive. If this simple view upsets existing arrangements with your employers, quit. So much the worse for them. You create--you are in control.
The 80/20 Principle Is at the Heart of Creation

People think that creativity is largely a matter of talent, experience, or luck. They are wrong. Talent, experience, and luck are all key elements, but there is something more fundamental, accessible, and powerful that you can use to multiply your creative effect.

The 80/20 principle is central to all acts of creation. Take plant growth. Rain is clearly important. And what causes rain? Clouds--but only a few clouds create the most rain, and only at particular times, in particular locations.

Fertile land is also important. While also partly due to rain, there are other factors that influence fertility, including the variety and number of plants and animals that have used the land before. As a result of small differences in these few factors, a few pieces of land will be tens of times more fertile than others, yielding stronger, healthier plants in...

Edition details

• Publisher: Doubleday Business
• Publication date: 2003
• ISBN 10: 038550957X
• ISBN 13: 9780385509572
• Binding: Hardcover
• Language: English
• Number of pages: 256