The 80/20 Principle: The Secret of Achieving More With Less (38 page)

10 Insurance agency consultant Dan Sullivan, quoted in Sidney A. Friedman (1995) Building a super agency of the future,
National Underwriter Life and Health,
27 March.

11 A large number of articles about specific businesses and industries attest to this. For example, see Brian T. Majeski (1994) The scarcity of quality sales employees,
The Music Trades,
1 November.

12 Harvey Mackay (1995) We sometimes lose sight of how success is gained,
The Sacramento Bee,
6 November.

13 How much do salespeople make? (1994),
The Music Trades,
1 November.

14 Robert E. Sanders (1987) The Pareto Principle, its use and abuse,
Journal of Consumer Marketing
4, no. 1 (Winter): 47–50.

CHAPTER
7

1 Peter B. Suskind (1995) Warehouse operations: don’t leave well alone,
IIE Solutions,
1 August.

2 Gary Forger (1994) How more data + less handling = smart warehousing,
Modern Materials Handling,
1 April.

3 Robin Field, Branded consumer products, in James Morton (ed.) (1995)
The Global Guide to Investing
(London: FT/Pitman), pp. 471f.

4 Ray Kulwiec (1995) Shelving for parts and packages,
Modern Materials Handling,
1 July.

5 Michael J. Earl and David F. Feeny (1994) Is your CIO adding value?,
Sloan Management Review,
22 March.

6 Derek L. Dean, Robert E. Dvorak, and Endre Holen (1994) Breaking through the barriers to new systems development,
McKinsey Quarterly,
22 June.

7 Roger Dawson (1995) Secrets of power negotiating,
Success,
1 September.

8 Orten C. Skinner (1991) Get what you want through the fine art of negotiation,
Medical Laboratory Observer,
1 November.

CHAPTER
9

1 This phrase comes from Ivan Alexander (ibid., Chapter 2), whose thinking on progress I have shamelessly plundered.

2 Ivan Alexander (op. cit., see Chapter 6, note 2) remarks nicely that “though we are now aware that the riches of the earth are finite, we have discovered other dimensions of opportunity, a new compacted yet fertile space in which business can flourish and expand. Trade, commerce, automation, robotisation and informatics, though almost landless and spaceless, are unbounded domains of opportunity. Computers are the least dimensional machines mankind has yet devised.”

CHAPTER
10

1 Quoted in
Oxford Book of Verse
(1961), p. 216.

2 The best and most progressive guide to time management precepts is Hiram B. Smith (1995)
The Ten Natural Laws of Time and Life Management
(London: Nicholas Brealey). Smith refers extensively to the Franklin Corporation and rather less extensively to its Mormon roots.

3 Charles Handy (1969)
The Age of Unreason
(London: Random House), Chapter 9. See also Charles Handy (1994)
The Empty Raincoat
(London: Hutchinson).

4 See William Bridges (1995)
JobShift: How to Prosper in a Workplace without Jobs
(Reading, MA: Addison-Wesley/London: Nicholas Brealey). Bridges argues, almost persuasively, that full-time employment by large organizations will become more the exception than the rule and that the word “job” will revert to its original meaning of “task.”

5 Roy Jenkins (1995)
Gladstone
(London: Macmillan).

CHAPTER
12

1 Donald O. Clifton and Paula Nelson (1992)
Play to Your Strengths
(London: Piatkus).

2 Interview with J. G. Ballard (1989), in
Re/Search
magazine (San Francisco), October, pp. 21–22.

3 St. Paul was probably of even greater importance to the success of Christianity than was the historical Jesus. Paul made Christianity Rome-friendly. Without this move, fiercely resisted by St. Peter and most of the other original disciples, Christianity would have remained an obscure sect.

4 See Vilfredo Pareto (1968)
The Rise and Fall of Elites,
intr. Hans L. Zetterberg (New York: Arno Press). Originally published in 1901 in Italian, this is a shorter and better description of Pareto’s sociology than is his later work. The description of Pareto as the “bourgeois Karl Marx” came as a backhanded compliment in his 1923 obituary in the socialist newspaper
Avanti.
It is an apt description, because Pareto, like Marx, stressed the importance of classes and of ideology in determining behavior.

5 Except possibly music and the visual arts. Even here, however, collaborators may be more important than is generally acknowledged.

CHAPTER
13

1 See Robert Frank and Philip Cook (1995)
The Winner-Take-All Society
(New York: Free Press). Although they do not use the phrase 80/20, the authors are clearly talking about the operation of 80/20-like laws. They deplore the waste implied by such unbalanced rewards. See also the comment on the book in a perceptive essay in
The Economist
(25 November 1995, p. 134), on which I have drawn extensively in this section.
The Economist
article notes that in the early 1980s Sherwin Rose, an economist at the University of Chicago, wrote a couple of papers on the economics of superstars.

2
Forbes
list of the Richest 25 Women in Entertainment.

3
Forbes,
March 8, 2007.

4 See Richard Koch (1995)
The Financial Times Guide to Strategy
(London: Pitman), pp. 17–30.

5 G. W. F. Hegel (1953)
Hegel’s Philosophy of Right,
trans. T. M. Knox (Oxford: Oxford University Press).

6 See Louis S. Richman (1994) The new worker elite,
Fortune,
22 August, pp. 44–50.

7 This trend is part of the “death of management,” whereby managers are rendered redundant and only the “doers” have a place in effective corporations. See Richard Koch and Ian Godden, op cit. (see Chapter 3, note 12).

CHAPTER
14

1 What follows is a highly simplified account. Those who want to take private investment seriously are referred to Richard Koch (1994, 1997)
Selecting Shares that Perform
(London: Pitman).

2 Based on the
BZW Equity and Gilt Study
(1993, London: BZW). See Koch, ibid., p. 3.

3 Vilfredo Pareto, op. cit.

4 See Janet Lowe (1995)
Benjamin Graham, The Dean of Wall Street
(London: Pitman).

5 Besides the historic P/E, which is based on the last year’s published earnings, there is also the prospective P/E, which is based on future earnings as estimated by stock market analysts. If earnings are expected to rise, the prospective P/E will be lower than the historic P/E, thus making the shares appear cheaper. The prospective P/E should be taken into account by experienced investors, but is also potentially dangerous because the forecast earnings may not (and, as a matter of fact, often do not) materialize. See Richard Koch, op. cit. (see note 1), pp. 108–12, for a detailed discussion of P/Es.

CHAPTER
15

1 A telling chapter heading from Daniel Goleman (1995)
Emotional Intelligence
(London: Bloomsbury), p. 179.

2 See Dr. Dorothy Rowe (1996) The escape from depression,
Independent on Sunday
(London), 31 March, p. 14, quoting a forthcoming book
In the Blood: God, Genes and Destiny
by Professor Steve Jones (1996, London: HarperCollins).

3 Dr. Peter Fenwick (1996) The dynamics of change,
Independent on Sunday
(London), 17 March, p. 9.

4 Ivan Alexander, op. cit. (see Chapter 6, note 2), Chapter 4.

5 Daniel Goleman, op. cit. (see note 1), p. 34.

6 Ibid., p. 36.

7 Ibid., p. 246.

8 Ibid., pp. 6–7.

9 Dr. Peter Fenwick, op. cit. (see note 1), p. 10.

10 Quoted by Daniel Goleman, op. cit. (see note 1), p. 87.

11 Ibid., p. 179.

12 I am indebted to my friend Patrice Trequisser for pointing out this very important manifestation of the 80/20 Principle: you can fall in love in seconds and it can exert a dominant influence on the rest of your life. Patrice would not accept my caveat, since he fell in love at first sight more than a quarter of a century ago and is still very happily married. But of course, he is French.

© Peter Van Niekerk

Richard Koch was a consultant with the Boston Consulting Group and partner of Bain & Company. He co-founded LEK Consulting, rescued Filofax and Plymouth Gin from near-death, built up Zola Hotels, started the Belgo restaurant chain, and played a key role in making Betfair by far the world’s largest betting exchange. He is the author of eighteen books, including the self-help guide
Living the 80/20 Way.
A self-confessed “lazy entrepreneur,” he lives the 80/20 way in London, Cape Town, and the sunniest part of southern Spain.

Praise for
The 80/20 Principle

“
The 80/20 Principle
is the cornerstone of results-based living. Read this book and use it.”

—Tim Ferriss, author of
The 4-Hour Workweek

“Time management is not about organizing your daily tasks, it is about organizing your essential daily tasks, and dumping the rest. Koch has made millions from this—a bestseller based on just one idea—proving that it works.”

—
GQ
’s 25 Best Business Books

“
The 80/20 Principle
is terrific!”

—Al Ries, bestselling author of
Focus
and
Positioning

“Both astute and entertaining, this is an intriguing book to help people concentrate on not wasting their lives.”

—Professor Theodore Zeldin, St. Antony’s College, Oxford University

“We give this Dali-esque masterwork 5 stars…a beautiful collage of well-written prose…This book is worth many times its price.”

—
Weston Review,
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Although the author expresses a view on the likely future performance of certain investment instruments, this should not be taken as an incitement to deal in any of them, nor is it to be regarded as investment advice. Each individual should consider their investment position in relation to their own circumstances with the benefit of professional advice. No responsibility can be assumed by either the author or the publisher for investment or any other decision taken on the basis of views expressed in this book.