The 80/20 Principle: The Secret of Achieving More With Less (26 page)

Many people gravitate towards their “right” box, but where alienation at work exists it is often because the person is in the wrong box.

WHAT ABOUT MONEY?

What indeed! Most people have got peculiar views about money. They think it’s more important than it is. But they also think it’s more difficult to get than it is. Since most people want to have more money than they currently have, let’s deal with the second point first.

My view is that money is not difficult to obtain, and, once you have even a little of it to spare, it is not difficult to multiply.

How do you obtain money in the first place? The best answer, one that works surprisingly often, is to do something that you enjoy.

The logic runs as follows. If you enjoy something, you are likely to be good at it. You are likely to be better at that than at things you don’t enjoy (this is not always true, but the exceptions are rare). If you are good at something, you can create something that will satisfy others. If you satisfy others, they will generally pay you well for it. And since most people do not do things they enjoy, and will not be as productive as you are, you will be able to earn above the going rate in your vocation.

But the logic is not foolproof. There are some professions, such as acting, where supply vastly exceeds demand. What do you do in these circumstances?

What you shouldn’t do is to give up. Instead, find a profession where supply and demand are more equally matched, but which is close in its requirements to your preferred vocation. Such adjacent professions usually exist, although they may not be immediately apparent. Think creatively. For example, the requirements of politicians are very close to those of actors. The most effective politicians, like Ronald Reagan, John F. Kennedy, Winston Churchill, Harold Macmillan, or Margaret Thatcher, either were or could have been successful actors. Charlie Chaplin was a dead ringer for Adolf Hitler and this was not accidental; sadly, Hitler was one of the century’s best and most charismatic actors. This may all seem pretty obvious. But few would-be actors seriously contemplate a career in politics, despite the weaker competition and superior rewards.

What if what you enjoy most has a poor employment market and you can’t find an adjacent profession that has good prospects? Then go to your next most preferred vocation and repeat the process until you find one that you like and that pays well.

Once in your profession, if making money is really important to you and if you are any good at what you do, you should aim to become self-employed as soon as possible and, after that, to start to employ others.

I arrive at this conclusion from the 80/20 Principle’s argument about arbitrage. Eighty percent of the value in any organization or profession comes from 20 percent of the professionals. The workers who are above average will tend to be paid more than those who are below average, but nowhere near enough to reflect the differential in performance. It follows that the best people are always underpaid and the worst people always overpaid. As an above-average employee, you cannot escape from this trap. Your boss may think you are good, but will never credit your true value relative to others. The only way out is to set up in business yourself and, if you are so inclined, to employ other above-average workers. Don’t take either of these steps, however, if you aren’t comfortable with being self-employed or a boss.

Money is easy to multiply

The other thing to remember is that once you have a little spare cash, it can easily be multiplied. Save and invest. This is what capitalism is all about. To multiply money, you don’t need to be in business. You can simply invest in the stock market, using the 80/20 Principle as your guide. Chapter 14 will elaborate.

Money is overrated

I would like you to have a lot more money, but don’t go overboard on this. Money can help you gain the lifestyle you want, but beware: all those nasty fables about Midas and the like are rooted in truth. Money can buy you happiness, but only to the extent that you use money to do what is really right for you in the first place. Also, money can bite back.

Remember that the more money you have, the less value an extra dollop of wealth creates. In economist speak, the marginal utility of money declines sharply. Once you have adjusted to a higher standard of living, it may give you little or no extra happiness. It can even turn negative, if the extra cost of maintaining the new lifestyle causes anxiety or piles on extra pressure to earn money in nonsatisfying ways.

More wealth also requires more management. Looking after my money irritates me. (Don’t offer to relieve me of it; it irritates me less than giving it away would!)

The tax authorities also make money inefficient. Earn more, pay disproportionately more tax. Earn more, work more. Work more and you have to spend more: on living close to work in an expensive metropolitan area or alternatively on commuting, on labor-saving devices, on contracting out housework, and on ever-more expensive leisure compensations. Spend more and you have to work more. You can end up with an expensive lifestyle that controls you rather than vice versa. You might get much better value and happiness out of a simpler and cheaper lifestyle.

WHAT ABOUT ACHIEVEMENT?

There are people who want to achieve—and then there are sane people. All motivational writers fall into the trap of telling you that you need direction and purpose in life. Then they tell you that you don’t have it. Then they put you through the agony of deciding what it should be. Finally, they tell you what they think you ought to do.

So if you don’t want to achieve anything specific and are happy enough going through life having it all (minus achievement), count yourself lucky (and skip to the end of this chapter).

But if, like me, you feel guilty and insecure without achievement and want to increase it, the 80/20 Principle can help with your affliction.

Achievement should be easy. It shouldn’t be “99 percent perspiration and 1 percent inspiration.” Instead, see if it’s true that 80 percent of your achievement to date—measured by what you yourself value—has come from 20 percent of your inputs. If true or nearly true, then think carefully about this top 20 percent. Could you simply repeat the achievements? Upgrade them? Reproduce similar ones on a grander scale? Combine two previous achievements to compound the satisfaction?

• Think about your past achievements that have had the most positive “market” response from others, those that have led to the greatest critical acclaim: the 20 percent of your work and play that has led to 80 percent of the praise others have given you. How much real satisfaction did this give you?

• What methods worked best for you in the past? Which collaborators? Which audiences? Again, think 80/20. Anything that just yielded an average degree of satisfaction for the time or effort should be discarded. Think of the exceptional highs achieved exceptionally easily. Do not constrain yourself to your work history. Think of your time as a student, a tourist, or with friends.

• Looking forward, what could you achieve that would make you proud, that no one else could do with the same ease? If there were 100 people around you trying to do something, what could you do in 20 percent of the time that it would take 80 of them to finish? Where would you be in the top 20? Even more stringently, what could you do better than 80 percent but in only 20 percent of the time? These questions may initially seem like riddles but, believe me, there are answers! People’s abilities in different spheres are incredibly diverse.

• If you could measure the enjoyment derived from anything, what would you enjoy more than 95 percent of your peers? What would you do better than 95 out of 100? Which achievements would fulfill both conditions?

It is important to focus on what you find easy. This is where most motivational writers go wrong. They assume you should try things that are difficult for you; on the same grounds, one suspects, that grandparents used to urge the consumption of cod liver oil before capsules were invented. The inspirationalists quote such worthies as T. J. Watson, who said that “success lies on the far side of failure.” My view is that normally failure lies on the far side of failure. Also, success lies on the near side of failure. You are already very successful at some things, and it matters not a whit if those things are very few in number.

The 80/20 Principle is clear. Pursue those few things where you are amazingly better than others and that you enjoy most.

WHAT ELSE DO YOU NEED TO HAVE IT ALL?

We’ve dealt with work, with lifestyle, with money, and with achievement. To have it all, you also need a few satisfying relationships. This requires a separate chapter.

12

WITH A LITTLE HELP FROM OUR FRIENDS

Relationships help us to define who we are and what we can become. Most of us can trace our successes to pivotal relationships.

D
ONALD
O. C
LIFTON AND
P
AULA
N
ELSON
¹

Without relationships we are either dead to the world—or dead. Although banal, this is true: our friendships are at the heart of our lives. It is also true that our professional relationships are at the heart of our success. This is a chapter about both personal and professional relationships. We start with personal relationships, with friends, lovers, and loved ones. Then we consider professional relationships in their own right.

What on earth has this got to do with the 80/20 Principle? The answer is quite a lot. There is a trade-off between quality and quantity and we consistently undercultivate what is most important.

The 80/20 Principle provides three provocative hypotheses:

• Eighty percent of the value of our relationships comes from 20 percent of the relationships.

• Eighty percent of the value of our relationships comes from the 20 percent of close relationships that we form first in our lives.

• We devote much less than 80 percent of our attention to the 20 percent of relationships that create 80 percent of the value.

COMPILE YOUR TOP 20 PERSONAL RELATIONSHIPS CHART

At this stage, write down the names of your Top 20 friends and loved ones, those with whom you have the most important relationships, ranked from most important to least important to you. “Important” means the depth and closeness of the personal relationship, the extent to which the relationship helps you in life and the extent to which the relationship enhances your sense of who you are and what you can become. Do this now, before reading on.

As a matter of interest, where did your lover/partner come on the list? Above or below your parents or children? Be honest (but you should probably destroy the list when you are through with this chapter!).

Next, allocate a total of 100 points between the relationships in terms of their importance to you. For example, if the first person on the list is exactly as important as the next 19 down the list combined, allocate 50 points to him or her. You may need to have more than one run at the numbers to make them add up to 100 by the time you’re finished.

I don’t know what your list looks like, but a typical pattern in line with the 80/20 Principle would have two characteristics: the top four relationships (20 percent of the total) would score most of the points (maybe 80 percent); and there would tend to be a constant relationship between each number and the next one down. For example, number two may be two-thirds or half as important as number one; number three may similarly be two-thirds or half as important as number two; and so on. It is interesting to note that if the number one relationship is twice as important as number two and so on, relationship number six is only about 3 percent as important as number one!

Complete this exercise by noting against each name the proportion of time that you actively spend with the person, talking or doing something together (exclude time spent with someone where they are not the main focus of attention, for example when watching television or a movie). Take the total amount of time spent with the 20 people as 100 units and then allocate these. Typically, you will find that you spend much less than 80 percent of the time with the few people who comprise 80 percent of “relationship value” to you.

The action implications should be plain. Go for quality rather than quantity. Spend your time and emotional energy reinforcing and deepening the relationships that are most important.

But there is another wrinkle, to do with the chronology of the relationships in our life. It turns out that our capacity for close relationships is far from infinite. There is another trade-off between quality and quantity of which we should be aware.

THE VILLAGE THEORY

Anthropologists stress that the number of exhilarating and important personal relationships that people can establish is limited.
²
Apparently, the common pattern of people in any society is to have two important childhood friends, two significant adult friends, and two doctors. Typically, there are two powerful sexual partners who eclipse the others. Most commonly, you fall in love only once, and there is one member of your family whom you love above all others. The number of significant personal relationships is remarkably similar for everyone, regardless of their location, sophistication, or culture.