One of the most enduring business beliefs is that success comes at a price – long hours, endless toil and stress and time with family and friends sacrificed. Just look, for instance, at any column by the serial entrepreneur and investor Luke Johnson and the theme is all about outsiders working endlessly against the odds, to kick against the norm and come up with products and services that transform our lives. No wonder there are not as many entrepreneurs as governments would like.
A rather different approach comes from Martin Bjergegaard and Jordan Milne, authors of “Winning Without Losing” (Profile Books). The subtitle of the book – “66 strategies for succeeding in business while living a happy and balanced life” – is an indication of their thinking. But this is not just theory. The book draws on Bjergegaard’s experiences as co-founder of Rainmaking, the “company factory” that runs several start-up companies around Europe, as well as those of Canadian entrepreneur Milne and 25 business role models, including Caterina Fake, co-founder of Flick’r and Hunch.com; David Cohen, co-founder of TechStars; Derek Sivers, founder of CD Baby; N. R. Narayana Murthy, founder of the technology company Infosys; and Tony Hsieh, the head of online shoe retailer Zappos.com, which was acquired by Amazon, and author of the bestseller “Delivering Happiness”.
The limitations of hard work.
The point is clearly that abandoning what they call “the myths of hard work and sacrifice” necessarily requires compromising on success. Rather, they stress that adopting the principles they set out is likely to not just maintain a better balance between work and the rest of a person’s life but to also make the work part more sustainable. Bjergegaard relates how – prior to starting Rainmaking in his native Denmark – he worked for the management consultancy McKinsey & Co. As he says, this “was not a recipe for an easy life, or a life at all”. After 15 months of working from 8am until 11pm each day, he left with nothing to go to because he realised he wasn’t being honest with himself or with the people for whom he was working. In particular, he realised that his own strengths did not fit the role. As he puts it, at McKinsey there were lots of people smarter than him and he needed to do something different. And this readiness to not follow the herd is a critical element. After all, as he points out, urging everybody to do the same thing would be like everybody opening corner shops.
Bjergegaard likes to suggest that he is just a “normal” lad from Denmark who needs eight hours of sleep a night, but he does appear to have the ability to see things in a different way to most people. At a time when many in Britain are still basking in the memories of last summer’s Olympics, when years of hard toil resulted in glory for so many, it’s often forgotten that it resulted in agony for so many others. With sport becoming ever more professional, talent is no longer nearly enough, even in the Olympics. It has to be accompanied by lots of hard work, dedication and sacrifice (as well as a little luck). So somebody looking for success in sport might, suggests Bjergegaard, look at how they can serve or complement those striving for sporting success. Citing the example of how African athletes are starting to train ever earlier in their quests to become the new long-distance champions, he suggests that some might want to move into such areas as supplying food and accommodation in training areas, compiling rankings, organising tours for visting coaches and the like.
The 80/20 principle.
Similar pleas against hard work for the sake of it are made by Richard Koch, another former management consultant who has gone on to become a highly successful entrepreneur and investor whose ventures have included Filofax, Plymouth Gin and Belgo. Fifteen years ago, he wrote the best-seller “The 80/20 Principle”, in which he developed the idea of wealth distribution attributed to the nineteenth century Italian economist Vilfredo Pareto. The more Koch looked into the Pareto Principle the more fascinated he became by the imbalances it reveals. As he writes in his new book, “The 80/20 Manager” (Piatkus), “in most important areas of life, a small number of events have a proportionately large effect”. The point of this for managers is that they should concentrate their efforts on the things that really matter. Especially at a time when techno logy makes them always accessible to superiors and subordinates alike and also provides them with mountains of data, this is easier said than done.
The problem is even more challenging when it is realised that – as Koch points out – the imbalance between cause and effect is counter-intuitive. However, acknowledging the existence of this imbalance is an important first step. The notion that the world is balanced so that all effort is rewarded in the same way is responsible, says Koch, for what he calls “one of the most harmful, ridiculous, idiotic, yet enduring assumptions of the business world” – that all sales are good, all revenue is valuable and all sources of revenue are of roughly equal importance. “They are not,” he says, pointing out that the delusion that all revenue is good drives “the worst and most palpably absurd blunders in the business world”. It leads to enormous amounts of energy and money being wasted in chasing totally unsuitable customers and it also leads to expensive and sometimes fatal acquisitions, he says.
So much for 50/50 thinking. The value of 80/20 thinking, writes Koch, is that it can change a manager’s mindset to a view of the world that is harder to believe but much more accurate. Moreover, it provides insight and radically improves effectiveness, he says, before describing the world of the manager who only makes 80/20 decisions.
You would never be short of time. You would deal only with the most important and intriguing issues. You would make your business much more effective and profitable. You would be able to tell your colleagues how to make their jobs easier and more fun. You would identify your best customers and know how to make them happier than ever. You would appreciate the business’s true strengths, those rare and valuable things that give it an advantage over all its competitors.
Koch then sets out 10 ways in which managers can put this thinking into practice. They range from using the Principle to be more challenging and to ask more questions about the business, through networking and mentoring to simplifying things in a complex world and thinking more strategically. Although he says each element repays attention, Koch insists that being a successful 80/20 manager does not require mastery of all 10. Indeed, such a focus could result in the big picture being missed.
“The essence of the 80/20 manager is a driven concern for results, and respect for life’s lopsided pattern of achieving them,” he says. “Being an 80/20 manager means thinking each day: What big goal can I achieve with relatively little effort?” If this sounds like a charter for the lazy, it is not. Rather it is a timely call for people in business to think more and do less. In so doing they will move closer to enabling the balanced life advocated by Bjergegaard and Milne.
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