- Conventional wisdom is not to put all your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk.
- Be selective, not exhaustive
- Strive for excellence in few things, rather than good performance in many
- Delegate or outsource as much as possible in our daily lives and be encouraged rather than penalised by tax systems to do this (use specialists to the maximum instead of doing the work ourselves)
- Creative systems operate away from equilibrium. Cause and effect, input and output, operate in a non-linear way.
- The problem is not extra scale, but extra complexity. Additional scale, without additional complexity, will always give lower unit costs. Yet additional scale is rarely just more of the same. The extra volume usually comes from adapting an existing product, providing a new product and/or adding more service. This requires expensive overhead costs that are usually hidden.
- The scale curve operates, but its benefits are overturned by the extra complexity.
- Winners sell a narrow range of products to fewer customers and also have fewer suppliers. Simple organisation is best at selling complicated products.
- Outsourcing is a terrific way to cut complexity and costs. The best approach is to decide which is the part of the value-adding chain where your company has the greatest comparative advantage and then ruthlessly outsource everything else.
- Let go of the less profitable customers and products, cut off most support and sales effort, raise prices and allow sales to decline at 5-20 percent while you laugh all the way to the bank.
- Being marketing led and customer centred is absolutely right, but keep the product range narrow to avoid overhead increases due to extra complexity.
- Focusing on the top 20% of your customers is both feasible and highly rewarding. Provide them with outrageous service above and beyond the call of duty and out of line with industry standards. May result in short term costs but will have long-term rewards
- Gather 80% of the data and perform 80% of the relevant analyses in the first 20% of time available, then make a decision 100% of the time and act decisively as if you were 100% confident the that decision is right.
- You can only spend time on high-value activities if you have abandoned low-value activities.
- For the individual too, it is better to know a few things well, or preferably one thing exceptionally well, than it is to know many things superficially.
- The key to making a career out of an enthusiasm is knowledge. Know more about an area than anybody else does. Then work out a way to marketise it, to create a market and set of loyal customers.