|Richard John Koch|
28 July 1950|
|Education||M.B.A. University of Pennsylvania, Wadham College, Oxford University (M.A.)|
|Occupation||Author, speaker and investor|
|Notable work||The 80/20 Principle|
Richard John Koch (born 28 July 1950 in London) is a British author, speaker, and investor, and a former management consultant and entrepreneur. He has written over twenty books on business and ideas, including The 80/20 Principle, about how to apply the Pareto principle in management and life.
Life and career
Koch was born in London, England. He went to Windsor Grammar School and attended Oxford University, receiving a bachelor's degree (first class honours) in Modern History in 1971. He studied business at The Wharton School of the University of Pennsylvania, receiving an MBA with Distinction in 1975.
From 1976 to 1980, he worked as a consultant at The Boston Consulting Group, and at Bain & Company from 1980 to 1983, becoming a partner in 1981. In 1983 he co-founded The LEK Partnership. In 1990 he retired to write books and make private equity investments. He has since featured on The Sunday Times (London) Rich List.
He currently lives in Gibraltar and is a self-proclaimed sun worshipper, with homes in three other sunny countries.
Richard has authored or co-authored around 20 books dealing with business, ideas, and personal success, including the million-copy best-seller The 80/20 Principle, and The Financial Times Guide to Strategy. "Koch is someone worth listening to," says Roger Trapp of The Independent, because of his success as consultant, entrepreneur, and author.
The 80/20 Principle (1997)
In 1997 Koch published The 80/20 Principle, which has since sold more than a million copies and been translated in 34 languages. The book was a reinterpretation of the Pareto principle, extending the idea that most worthwhile results come from a small minority of effort, from a business context, where this concept was well known, to include personal life, careers and personal happiness.
The 80/20 Principle, substantially updated in 2007, has become a business classic, being named by GQ Magazine as one of the top 25 business books of all time. The Weston Review said: “We give this Dali-esque masterwork 5 stars... a beautiful collage of well written prose... the book is worth many times its price.”
The Power Laws (2001)
In The Power Laws, which was published in the US under the title The Natural Laws of Business, Koch discusses the 80/20 principle as a basic indicator of how the universe works. He sees the process of evolution, as described by Charles Darwin, as a special case of the 80/20 principle at work.
He also emphasises that the 80/20 principle should be seen not only as a method of making decisions and generating innovations, but that it should be combined with W. Brian Arthur’s concepts of positive feedback and increasing returns.
Of The Power Laws, getAbstract.com said: “Richly detailed and splendidly written, this page-turner applies the laws of science to economics and business... Koch is smart enough and skillful enough to move beyond simple parallels and use the science to identify and explain core elements of business. GetAbstract.com highly recommends this soon-to-be classic to everyone in the business world.”
Living the 80/20 Way (2004)
In Living the 80/20 Way, Koch focuses on how to succeed personally as well as professionally, to make a good life as well as a living, while doing less. He pioneered the idea that we can achieve more if we relax, enjoy life more, and concentrate on the few things that matter uniquely to each individual.
Superconnect: How the Best Connections in Business and Life Are the Ones You Least Expect, was written with Greg Lockwood and explores the “strength of weak links,” concluding that success is less about who you are than how you connect. The book advocates building a wide range of diverse links with acquaintances who “walk on different planets”. The book suggests that the most satisfying lives go to the “superconnectors” who frequently put different kinds of people in touch with each other.
Professor Marcus du Sautoy of Oxford University called Superconnect “a fascinating insight into a subject that underpins everything we do”, while Julia Hobsbawm wrote in Management Today that it was “the book equivalent to ‘music to my ears’ – a fascinating and enriching read.”
The 80/20 Manager (2013)
The 80/20 Manager gives ten different ways that managers can achieve extraordinary results from ordinary efforts.
The book’s closing words: “The secret of being an 80/20 manager is to realize sky-high aspirations through intelligence and acute observation instead of through toil and trouble. Like angels, we can soar and lift humanity while scarcely flapping our wings. But unless we care deeply about specific results, and unless our ambition is boundless, we will never even take off.”
The 80/20 Principle and 92 Other Powerful Laws of Nature: The Science of Success (2014)
Koch also wrote The Financial Times Guide to Selecting Shares That Perform and The Financial Times Guide to Strategy, currently in their 4th and 5th editions respectively.
Entrepreneur and investor
Richard went into business on his own account when he was 33 as a co-founder of LEK Consulting. The firm was said to be the most successful strategy boutique of the 1980s, expanding from 3 to 350 professionals during the six years Richard was there, with several offices in the US, Europe and Asia. LEK, in line with the advice it dispensed, not only grew very fast, but it was also extremely profitable.
When he "retired" at age 40, Richard had made enough money to be able to fund the start or expansion of several new ventures. These included Filofax, Belgo, Plymouth Gin, Capstone, and Betfair. These have returned between 5 and 53 times his original equity stakes. After LEK, Richard was not part of the management teams of these ventures, but was active in providing not only cash but also counsel on strategy.
Richard is fascinated by what makes new ventures successful. He set out his views in The Star Principle: How It Can Make You Rich.
During the 13 years that Richard Koch was a management consultant, he was renowned within his circle for going "over the top" in his presentations to CEOs and boards of directors. One of his first bosses at the Boston Consulting Group wrote in an appraisal that Richard was like a "volcano" which was mainly working well under control but occasionally "erupted" in hard-to-predict ways. Richard's view was that a presentation couldn't be effective unless it was exciting. Everyone agreed that listening to Richard was a pleasurable experience, even if it made his higher-ups nervous.
During recent years, Richard has given only occasional keynote addresses, preferring to concentrate on his writing, investing and tennis. Recently, however, he has recognised that writing books is not the only way to spread the word, and has committed to doing at least one major talk a month.
“Progress is personal; it comes from individuals demanding more of themselves and everyone else.”
Richard Koch (1999) The 80/20 principle: the secret of achieving more with less.
“Conventional wisdom is not to put all of 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.” (p. 28)
“Business strategy should not be a grand and sweeping overview. It should be more like an under view, a peek beneath the covers to look in great detail at what is going on." (p. 58)
“Marketing, and the whole firm, should devote extraordinary endeavour towards delighting, keeping for ever and expanding the sales to the 20 per cent of customers who provide 80 per cent." (p. 103)
“Few people take objectives really seriously. They put average effort into too many things, rather than superior thought and effort into a few important things. People who achieve the most are selective as well as determined." (p. 142)
“Everything you want should be yours: the type of work you want; the relationships you need; the social, mental, and aesthetic stimulation that will make you happy and fulfilled; the money you require for the lifestyle that is appropriate to you; and any requirement that you may (or may not) have for achievement or service to others. If you don’t aim for it all, you’ll never get it all. To aim for it requires that you know what you want.” (p. 164)
Sample Text: The 80/20 Individual (2003)
Richard Koch (2003) The 80/20 individual: how to accomplish more by doing less – the nine essentials of 80/20 success at work.
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... 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. 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.
• Chapter: 80/20 Individuals in Organizations
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.
• Chapter: 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.
In business the 80/20 principle is behind any innovation, any extra value. It is an entrepreneurial principle, a formula for value creation used not only by entrepreneurs, but by most managers and organisations.
The key is to work out the few things that are really important, and the few methods that will give us what we really want.
- The 80/20 Principle. Nicholas Brealey Publishing, 1997, Doubleday 1998. ISBN 0-385-49174-3
- The Power Laws. Nicholas Brealey Publishing, 2000, published in the US as The Natural Laws of Business, Doubleday 2001. ISBN 0-385-50159-5
- The 80/20 Revolution. Nicholas Brealey Publishing, 2002, published in the US as The 80/20 Individual, Doubleday, 2003. ISBN 0-385-50957-X
- Living the 80/20 Way. Nicholas Brealey Publishing, 2004. ISBN 1-85788-331-4
- Superconnect: the power of networks and the strength of weak links. Little, Brown/WW Norton, 2010. ISBN 978-0-393-07160-3.
- The Star Principle: How It Can Make You Rich. Piatkus Books, 2010
- The 80/20 Principle and 92 Other Powerful Laws of Nature: The Science of Success. Nicholas Brealey Publishing, 2014.
- "Concentrate on activities with the most valuable results: New book gives tips on how to achieve more in less time". The Kansas City Star. 13 October 1998. Retrieved 18 May 2010.
- "The Power Laws – The Science of Success by Richard Koch". Business Line. 19 June 2000. Retrieved 18 May 2010.
- "The era of a few great men – The essentials of 80/20 leaders are well defined in this manifesto, but Richard Scase doubts they are shaping a New Economic Order". Management Today. 1 June 2002. Retrieved 18 May 2010.
- Trapp, Roger (20 June 2004). "Living the 80/20 way, by Richard Koch". The Independent on Sunday (London). Retrieved 18 May 2010.
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