Adam Rabinowitz's Blog, page 2

A visit to my Almer Mater

This past week I’ve been sharing a lot about the power of vision. I’ve shared my story in previous newsletters, and I spoke on the Cliff Central show about the powerful part that vision has played in the growth of Imagin8, and my own personal achievements, but the most rewarding was to talk to a group of Matric boys from my old school, KIng Edward VII. 

The session was hosted after school, and was entirely voluntary, so I really expected a handful of boys to attend. But the room was packed full of young men at the threshold of a critical point in their lives. What they decide to do next year makes a huge impact on their lives. 

After the talk, A number of boys said that my story had inspired them, and some stayed afterwards to ask questions and chat. One or two emailed me about their hopes and dreams in the hours after the session, and some of their questions and comments inspired me.  

Newsletter#13: Working on the business vs working in the business

You can tell the difference between people who are passionate about their business, whether those are big or small businesses. Small business has one advantage over big business- the owner is closer to all activities than the CEO of a big company. If the owner is passionate, this rubs off on everyone. 

This week I stayed in a large hotel in Cape Town. Usually I choose small b&b’s and guesthouses because I like to feel the local flavour of the area and I’ve always experienced that more in small owner-run places. But this week I was lecturing and stayed on in the hotel where the conference was hosted. I was pleasantly surprised because the place ran like well oiled machine.  Staff were so friendly I wanted to take them home with me. People couldn’t do enough. Everybody went the extra mile without being asked. The only real chaos was when 400 people descended on the breakfast buffet between 7:00am and 7:45am before the start of the many simultaneous conferences during the week. How did the GM get everything so right? 

In the E-Myth, Michael Gerber tells of a similar experience, also at a hotel, and uses this to illustrate the importance of systems in a business. When there’s a refined, perfected system in place to deliver each and every element of the customer experience, the job of running the business is so much easier for the manager (or owner). The acid test of bullet proof systems is whether or not the business is able to cope with peak demand and satisfy every single customer touch point experience. 

Getting your systems right is the result of a simple change in focus from the owner or manager. 

Most managers focus on what needs to be done. What occupies the manager (or owner)’s mind is the number of orders that need to be dealt with that day, making sure there is sufficient stock or raw material to cope with demand, and dealing with staff. They fill their time with meeting demand and coping with what needs to be done. That’s most people out there. And that’s what we call working in the business. 

The change in focus comes when the manager or owner starts working on the business on top of doing their daily job. This means critically analyzing how things are done in the business. Instead of what needs to be done, the shift in focus causes the manager to focus on how things should be done.  Instead of just getting the work done and the orders filled, the manager now focuses on constantly improving the systems that deliver the work, and fill orders with three objectives in mind: consistency, predictability and reliability. 

I’m not talking about driving throughout, improving productivity, or ramping up efficiency. All I’m talking about to begin with is a focus on systems that produce the same results time and again, no matter who is in the office, and no matter how full your order book is. 

Once the systems are in place, and the systems are being followed exactly as designed time and again, the manager can shift the focus from creating systems to improving the systems that you’ve created. Now you can add new dimensions to your approach. Now you can start building better systems that improve efficiency, while at the same time adding customer value. 

These two topics – Creating and Improving  Systems; and creating Customer Value are entire disciplines in themselves. Your job is not to master them on day 1, but to begin to understand the impact of well designed systems on your business. At Imagin8, we transformed an organization from one with no systems to one with reliable systems, and in so doing we reduced our workload per transaction from minutes to milliseconds, and at the same time we improved our customer experience in terms of the quality, on-time delivery, and frequency of the information we provided. We also improved the reliability of each of our service offerings and improved throughput by over 1000%. 

Now we’re helping other SME’s do the same in their businesses. 

Achieving Radical results comes from a simple shift in focus from working in the business to working on the business. From asking what work needs to be done to asking how the work should be done. Implementing bulletproof systems is the first step to a solid business. 

Newsletter #12: How Coffee Solves Problems (and an empty fridge)

Immersion: Becoming drenched in the situation to experience it completely.

It’s a beautiful clear day, 28 degrees, and there’s a slight breeze in the air to take the edge off the heat. Perfect beach weather. So, sitting on your patio, sipping your morning coffee, you decide to spend the day at the beach.  You can almost feel the sand between your toes, and you can hear the sound of the waves lapping up on the beach. Then you get a phone call, and suddenly the day runs away from you and you don’t actually get a chance to spend the day on the beach. So you console yourself with the thought that you had your moment when you imagined your day in the sun, but is it really the same?

We adopt a similar superficial approach to solving problems in our work and businesses lives too. We identify the problem, think up a solution, and we’re happy that we’ve considered everything and so we begin to solve what we think is the problem.

But imagining a day on the beach is not the same as actually being there. When you’re sitting on the beach, you’ll feel the surprise gusts of wind on your skin, and smell fresh smell of the sea that you didn’t quite experience in your mind. Being there is so much more experiential than imagining you were there, and so your thoughts, experiences, and your imagination are in a completely different place when you immerse yourself in the problem than when you imagine it.

Now take the converse.

Being continually immersed in the problem inhibits your ability to think about solving that problem any way other than your current frame of reference. And if you’ve had the same problem for a long time, clearly, your approach to solving it hasn’t worked. But you’re always in the same place (physically), and so you’re constantly immersed in the problem, and you haven’t given yourself a different perspective to enable you to adopt a different approach to solving the problem.

Last week, I spent an hour with one of my entrepreneur clients. I met him at his office to discuss my proposals to solving some very pressing problems that he’s been battling with for long enough to cause him to call me for help. Around him was the constant chaos that was symptomatic of the problem plaguing him. Instead of continuing the meeting there, I moved the location to a different place entirely – one of my favorite places – a coffee shop nearby. The change in perspective was profound.

While my client was at his office, all he could think of was the problem, because it was almost impossible not to. The symptoms of the problem were all around him. The moment I moved him to a different place (physically), where he wasn’t immersed in the problem 24/7, he began to focus on the solution.

We’re often too close to a problem to identify that we’re in the repetitive cycle of hitting the same problem the same way over and over again, hoping something will change. Kind of like the way we hit the fridge over and over again, hoping that some time between the last time we took a peek and this time, we’ll find something that wasn’t there last time, but inevitably we’re confronted with the same leftovers that won’t satisfy whatever needs we’re hoping to satisfy. When you can’t solve a problem that isn’t going away, you’re too close to the problem. You’ve been immersed in the problem for too long. Take a step back, get out of the physical location.

A change in place causes a profound change in perspective.

Newsletter #11: The Question is the Answer

Asking the right questions is more important than finding perfect answers to the wrong ones.

Over the last two weeks, I’ve spent some time coaching entrepreneurs. These business owners face very different challenges, but at the heart the search for the right answers lies a profound reality:  When you continually throw solutions at a problem that never goes away, you’re trying to solve the wrong problem.

One of the tools I’ve used to help identify the real problem is a single question and a one-page answer.

If you’re battling with a problem you can’t resolve, write a one page essay (for yourself, no-one has to read it) to answer this question:

“What is the cause of your anxiety right now regarding your future? What

unanswered questions keep plaguing your mind?”

Rather than trying to solve a problem that you don’t fully understand, writing about your anxieties and feelings brings out some deeper insights about the real problem. That’s right, I said it. Feelings. If you’re a guy, this might sound foreign to you, but we all have them.

The essays my clients wrote were full of raw emotion, as they grappled with burning questions, but in their writing, the real issue bubbled to the surface. Instead of trying to solve what the entrepreneurs thought was the problem when they first approached me, exploring their emotions and anxieties lead us to uncover the real issue, which was very different from the original problem. They were trying to solve a symptom of the problem, but not the cause. And this is not the Rocky Horror.

Valuable data is everywhere. Somewhere in our confusion about finding the right course of action lies the clarity of wisdom that identifies the way forward. Too much noise makes it difficult to identify the signals we should be looking for. Instead of responding to the right information, we end up following the noise. Sometimes it’s helpful to bring in someone from the outside to pick out what you’re missing, and highlight the key issues in your own noise.

This week, I’ve brought enthusiasm and passion back into the lives of at least two entrepreneurs. I hope their learning will help you.

This year, I’m actively expanding my database to reach as many entrepreneurs and small business owners as possible. Everybody knows at least one entrepreneur. Forward this to your entrepreneur contacts, and if you’ve received this, please sign up for the mailing list. In 2016, I’m researching SME’s, and I need your help reaching them.

Newsletter #10: Passion in Business

I don’t know about you, but I’ve already had a great start to 2016.

During December I decided to enter Lost Soul into a screenplay competition, so I spent my December holidays learning about writing screenplays. The first thing I did on 1st January was to convert the last 10 pages of the novel to the screenplay. Now I have a 190-page screenplay to reduce to 120 pages. I’m learning from the best – JJ Abrahams (Alias, and Star Wars VII), as well as the writers of the Walking Dead.   They say “do something that scares you.” I feel well out of my comfort zone.

On  Monday (11th Jan), I represented University of Stellenbosch Executive Education as a guest on the Leadership Platform show on Cliff Central (

Newsletter #9: Keeping Staff Motivated

How do I keep my staff motivated?

Happy silly season

I’ve just kissed 2 teenagers goodbye and watched with mixed feelings of pride and apprehension as they boarded separate planes at separate airports bound for the modern-day rite of passage called Rage. When did this become a thing? Or am I just getting old? So as parents we did the only responsible thing. We spent the next day at friends posting pictures of ourselves emptying bottles of champagne and whiskey.

One very sad and telling conversation was the one I had with my son, newly graduated from high school, last Thursday. We spoke about the legacy his generation has inherited from the ones that have gone before. He has the world of technology and communication developing at an exponential rate to enjoy, with all the daily innovation it brings. But at the same time, he stands at the brink of adulthood looking out on the world standing at the doorstep of a dying planet. Are we doing enough for our kids? Please share with me what you’re doing to recycle our world. Help encourage others to do the same.

This wasn’t supposed to be a doom and gloom message, because I’m also winding down for the year, and I want to leave you with some positive thoughts as you go into the holiday season.

One question I’ve been asked by several people recently is “how can I keep my staff motivated?”

Before I attempt that question, let me ask you this: what motivates you?

I have a theory which I call the Theory of Nothing which is too long for me to lay out here without losing you by page 3.

But, back to the question, “What motivates you?” No two people are alike, and the same incentive won’t motivate two people in the same way. Money is a motivator to a certain extent, but there’s no employee who ever earns “enough”. Money will work for a short period as a motivator, but it isn’t permanent. Whatever we earn, we find a way of spending just that much more. Motivation has to be much deeper, and it has to do with connecting each employee not to the work they do, but to what they’re ultimately doing for the person, the individual customer, at the end of it all.

Just as you’re quite happy to spend money doing something you enjoy, like playing golf, or jumping off bridges with a chord attached to your ankles, or painting, or sculpting, and would rather be doing that than your job most of the time, you have to find a way to ignite that same passion in each employee. Dave Silver, in Smart Startups, says that human beings have an inherent, hard-wired need to collaborate, to be part of something bigger than themselves. Find a way to tap into this need in order to connect your employees to the reason for the work they do. Instead of putting somebody behind a desk and showing them how to process claim forms, so that all their job means to them is the paper, the forms, the data contained in the little gaps, and the irritation they feel when clients do it wrong, let them meet customers when you’re making a payment for their insurance claim so they can see the relief their work brings. Let them experience what it’s like to be their own customer. Let them experience what it feels like when work doesn’t get done on time. Find a way to connect each individual to the end customer. Then remind them of that emotional response rather than try to use metrics and performance indicators to motivate them. Create a culture of passion for dong the work for your customers rather than a culture of being monitored, measured and bemoaned.

If you haven’t been to Vida Café recently, do yourself a favour and spend an hour at a branch this week. Apart from having some great coffee (this is not a sponsored piece, btw!) you get to watch the staff having immense fun doing mundane, routine work. And then take yourself to your local coffee whop where the staff are bored, and are more interested in chatting to one another than in serving their customers. Vida gets motivation right because their staff have fun without losing focus on the customer.

Your creative solution to the issue of motivation must be best tailored to each individual staff member. And if you can’t come up with all the answers, bring your staff staff in to the discussion about what drives them outside of the workplace. Then find a way of bringing that passion into the workplace. You’d be surprised what you find.

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Newsletter #8: The hardest person to lead

I met some very interesting people this past week, and I had some memorable experiences too, one of which was spending over 5 hours in the airport lounge in Durban on Monday (16th Nov) while every flight on the board had red “delayed” indicators due to the hail in Jo’burg.  There were some very frustrated people, and some very chilled people in that airport. Which would you have been?

So during the long delay, instead of getting irritated, I decided rather to meet some fascinating people and I provided some light relief by offering the game of 30 Seconds I had in my lecturing gadget bag and passing the time having fun with a group of stranded strangers. So instead of being frustrated and bored, I made some new contacts, met an entrepreneur and a group of travel agents, had loads of fun, sold 2 copies of Porter’s Rule and had a taste of each of the wines they had on offer, some of which I actually remember.

At GIBS later in the week, I met some more really amazing and dynamic people whom I roped into being part of this newsletter from a content perspective. Wouldn’t it be useful to get some leading insights from some key people in SA industry from time to time instead of just yours truly?

Following on from last week’s newsletter, here is the second point I wanted to raise about being un-busy. Last week’s article was getting very long, so I split it into a separate article on its own.

One cure for busy people is to do the practical exercise I outlined last week. The second thing to work on is your ability to lead yourself. You’re not going to like me when I tell you that the one mainly to blame for being too busy is yourself.

If you’re doing too much, you need to make some conscious decisions about the things for which  you’re allowing yourself to be held responsible. Part of the reason we end up being so busy is because we’re unable to say no. And the reason we’re unable to say no is usually to do with our own assertiveness.

You can’t lead others until you can lead yourself.

If you haven’t heard this before you’ve probably been asleep most of your life, but what does it really mean to lead yourself? I ask this question often in class I often get the same answers.

The most common suggestion is that to lead yourself you have to have goals. I know people who have had the same goals for years and they’re no closer to reaching them now than they were 10 years ago.  Having goals is one thing. Doing something about realizing them is another thing entirely. To lead yourself means to know who you are and to be completely comfortable with who that person is. It means to have confidence in yourself in any situation. It doesn’t mean you have to have mastered every situation – that’s impossible. You have to be in control of how you deal with each one. Leading yourself means being comfortable admitting you can’t do something that you’re not capable of too and collaborating with people around you to draw on their strengths.

To be able to lead yourself means that you have to be completely authentic. That means being the same person on and off camera. You can’t confidently lead others while you’re still wrestling with your own insecurities. You can’t be what you think other people want to you to be if it isn’t genuine. You can’t fake confidence or honesty.

When you truly know yourself, you’re capable of leading others. Daniel Goleman (Primal Leadership) talks about leaders being human and being vulnerable. To know yourself means being comfortable to let people know you’re human, that you also have hopes and fears, and that you don’t have all the answers. Being a leader is about connecting with people on an emotional level, and understanding that people don’t want to see your pretenses or your masks, they want to connect with the real person.

Leading yourself means having Emotional Intelligence – being in control of your emotions, and understanding the emotions of others. This in itself is the topic for weeks of personal mastery workshops.

Working on knowing yourself is the beginning of being an effective leader both at the workplace and at home.

if you already know all this then the question I have for you is this: Are you leading yourself? And if your answer to that question is no then the question I have to ask you is Why not?

If you have some success stories or some challenges to share in your own journey, please share them with me.

Till next time.

Newsletter #7: Getting Un-Busy

Getting Un-Busy

I seem to hit a popular note when I mentioned my thoughts about the 20 Rule in last week’s newsletter.

During this past week I’ve been lecturing young and up-coming leaders at one of the SA top 20 companies, and many of the issues they raised dovetail with this notion, that 20% of your customers consume 80% of your time, and that 80% of your customers make up only 20% of your revenue. However, my theory is that there is significant value to unlock in taking the work you do for the seemingly non-cost-effective 20% seriously.

What I learned from the people in the classroom this week is that many consider themselves to be too busy, overloaded even, and battle to get through the volume of work. They struggle to deliver consistency. They share similar fears about their future as leaders – what if people don’t believe in me? What if I can’t get people to follow me? What do I do with the responsibility of being someone else’s leader?

So, following on from the 20 Rule, and addressing some of these questions, here is a thought to consider as you go through this week.

How do you get un-busy?

Having too much to do and not enough time is never a good thing. The result is inevitably stress and burnout. It’s what Steven Covey calls Crisis mode, where you’re working on the urgent and important things all the time.  If you find yourself in this position you’re not alone. Most managers share your frustration.

To get out of crisis mode, you have to understand what’s driving your crisis, and you have to make a conscious, sometimes very time-consuming effort to get out of it.  Jot down the top 10 things on your to-do list for the next few days, and then add two columns next to your list: Urgency and Importance. Classify each of your to-do’s giving them a High or Low in each column. By the time you’re done, each item on your list should have two scores alongside it, one in each column.

Then draw yourself a grid like the one in the diagram, and plot your to-do’s in the grid based on their Importance and Urgency ratings. The ones that are high importance and high urgency go in the top left. Those are the ones that are creating your chaos – the top left – Highly Urgent and Highly Important. That’s the crisis mode we do not want to be in. You want to be working on important items before they become urgent (Important and Not Urgent in the diagram, or High Importance, Low Urgency on your list) so that you have time to do them properly. Ideally you want most of your to-do list in the top right: high importance and low urgency.  How do you do it?

The approach is now two-fold. You can’t ignore the urgent and important, so work on them and get them done. However, you need to make time to work on the not-urgent and important items. Get these done before they cross the line and become urgent.

You want to create time for yourself to work on fixing problems so they never occur again, instead of fighting fires. If you only have enough time in the day to work on urgent and important things, then you never have enough time to understand why these things became urgent in order to avoid getting yourself in crisis mode again. For every problem in the top left, craft time in your day to analyze what caused this to go wrong, or become urgent, and work on the systems and processes behind this. Getting the processes sorted allows for consistency and routine when dealing with the same issues in future so that they don’t become a crisis. Being in constant crisis mode doesn’t allow you any time to tighten and improve systems, nor does it allow you do work on those crisis items properly. Chances are you’ll deliver a rush job and end up having more work to do later when these come back for rework and correction.

If you analyze the work you do in a day, 80% of your time is probably spent working on things for which you have not yet created slick, bulletproof systems and processes. (That’s if you’re not wasting time on things that are neither important nor urgent.) This 80% of your day is usually spent doing special requests for customers where you don’t have an optimized system, or your current systems are unable to cope with the particular requests.

For more on this read Steven Covey’s 7 Habits of Highly Effective People, particularly the chapter on Putting First Things First.

When there is too much work and not enough time, companies usually run to hire more people.  But that shouldn’t be the answer. If people master the use of their time, more can be done with less people.

At Imagin8, I’ve tried several times to employ people, but our systems are constantly being refined so that there’s less and less work for a new hire to do. We keep our organization lean and productive. I’ve managed to increase the number of customers we serve, and the number of transactions we process without adding more headcount. At the same time, our customers get a better and better service. Each time we slip up, we relentlessly pursue the error so that it never occurs again, and in so doing we generally add features to the products and services, and add value to the customer experience. This is usually as a direct result of work I do for the 20%, and at the time it takes a lot more than 80% of my day, more like 180%. But when the work is done, and the new features are added, our systems can handle more customer requests. Work disappears from the 80% side, and falls in to the 20% side.

Next week’s article will look at some of questions I’ve been asked around leadership, and the wisdom behind the notion that you can’t lead others unless you can lead yourself.

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Slave to the City Book Signing: 3rd December

I’ll be speaking at the first Porter’s Rule: Slave to the City book signing at Rotary, Killarney Country Club on Thursday 3rd December at 7:30pm. More details will follow when the official invitation is distributed by Rotary. Email me if you want a ticket and an official invite.  Tickets are R150, including dinner.

Newsletter #6: Dealing with Failure, and Knowing When to Stop

Last week I was invited to be a guest speaker at the GIBS Entrepreneurship Club.

I spoke about what it’s like to be an entrepreneur. In a nutshell, it is at the same time exhilarating, and frightening. Rewarding at times, and a long and lonely road the rest of the time. Pockets of celebration and success and long periods of hope and disappointment, lots of trial and error. But being an entrepreneur is not much different from being a manager. 90% of your activity is operational, running a business is like managing a department. The biggest difference is that when you’re employed, it’s a lot like playing soccer for Bafana. It doesn’t matter that you don’t win a game, you’re still going to get paid. For the Entrepreneur, it’s more like walking a high wire across two skyscrapers without a safety net. Blindfolded.

After the talk I fielded some very interesting questions about issues which have become so much part of my DNA as a tamed serial entrepreneur I’d forgotten that they were real issues and fears for new entrepreneurs (and managers) out there.

These were some of the questions:

How do you deal with failure?

I run two very successful businesses. However, lurking in the shadows are many business ventures I’ve started that have failed. Some of them were very expensive failures. Some of them minor. But if you consider that only 1 out of every 25 entrepreneurial ventures survives past the first 5 years, failure has to be part of the deal right from the start. The one thing the entrepreneur has to accept is that the business idea failed, but that he or she is not a failure. There is a huge distinction between the entrepreneur and the idea. Yes, it is your idea, and yes, you risked time and resources to make it into a business, but the person doesn’t become a failure if it doesn’t pan out. Separate yourself from the business emotionally.

What I learned from years at business school, and teaching managers, is that there is an approach to follow at the various stages of the business life cycle. In the same way, the business manager needs to use different tools during different stages of new product development. Doing this in the dark, or without knowing what to look out for, wasn’t a great idea in hindsight. When the businesses failed there were usually glaringly obvious signs that I ignored, refused to see, should have noticed, or didn’t know about, all of which probably could have helped avoid big losses had I paid attention to them. With a little market testing, or application of a few basic business management tools the business idea might even have been shelved before it began.

According to the innovation theorists, fail early, fail often. Early failure is a lot less costly than failure later in the process. (Read Eric Reis’ Lean Startup Methodology.) Edison had over 2000 failed attempts at making the light bulb. He said he didn’t fail. He just 2000 ways how not to make a light bulb.

How do you know when it’s time to stop?

If you buy into the idea that a new business is an unproven experiment, that it’s all about testing a multitude of unknowns, then you can approach the rollout of a new business more scientifically and less emotionally. Set performance markers that determine whether or not you advance to the next stage. If the results of your initial marketing don’t advance you to the next stage, make sure you fully understand what didn’t work before you throw more money and effort away by trying a different approach on something that ultimately isn’t going to work. Read Eric Reiss’ Lean Startup Methodology for a well laid out approach to building experiments to test your assumptions before you lay out fortunes on an idea you haven’t fully proven. From my own research most small businesses do not do thorough market research before embarking on new business ventures.

Final Word

The final word for this week’s newsletter is Believe. Not every venture works out. The statistics prove that undeniably. Ignoring this statistic before going into a new venture or launching a new product is pure folly. The odds of new business survival are slim. But believe in yourself, no matter what. An idea may have proven to be something people don’t want to spend money on, but that doesn’t mean you’re a failure. Analyze the data, find out where your assumptions were off, and try a new experiment to prove or disprove your assumptions. But never stop believing in the power of your own creative ideas. Your ideas can still change the world. Don’t give up, but advance sensibly when perusing your idea.

Do it smartly, and be patient. Finding the right pathway to the masses doesn’t happen overnight and the product you had in mind when you first thought up your business idea may not necessarily be the one you end up with. Make sure you only spend what you’re prepared to lose and that you have enough cash coming in while you’re testing new markets and spending money on R&D. Don’t raid successful cash flows to pursue untested ones.

This week, I’m lecturing on a program for up and coming managers. I’ll share some of the learnings from these lectures in next week’s newsletter.

Newsletter #5: The 20 Rule

Many people commented on the vision board concept and shared stories of their own vision board experiences, their visions and dreams. I had one person share a challenge which was more of a challenge to me to write a book on a certain theme, but that wasn’t the idea of asking you for your challenges. I’m not bold enough to play challenge-roulette where I say Throw it at me, and I take on whatever people suggest. The idea of the Business Challenge is that the most useful learning comes from asking questions, not being overloaded with content. It’s surprising how much unused knowledge you carry around with you in your head. It’s in finding the application of the knowledge that it makes it useful information.

You’re one of over 3000 people reading this newsletter every week. If it means something to you, please forward this on.

Going Public

On Thursday 5th November, I was invited to be part of the panel at the GIBS Entrepreneurship Club where I shared some thoughts on what it’s like to be an entrepreneur. It’s like asking a woman what it’s like to be a woman. If you don’t know anything else, what have you got to compare it to? Except, maybe for Bruce/Caitlin Jenna.

I really felt for Brian Habannah in Friday’s Bronze final at the Rugby World Cup. One score away from making a new world record, and every opportunity he had just didn’t work out for him.

It’s a bit like that in business. When you try too hard to make something work, it’s that extra pressure that makes your efforts fall apart. People try desperately to come up with that lifeline, the blockbuster product that’s going to make their fortune instead of concentrating on doing the little things right one step at a time to keep your existing customers smiling.

The 20 Rule

No – you didn’t read the heading wrong. In 1896, Vilifredo Pereto noticed that 80% of his peas came from 20% of his pods and what we know today as the Pareto Principle or the 80/20 Rule came into being. We also ended up with frozen peas, but that’s not part of this story. The notion that 80% of your income comes from 20% of your customers, or 80% of your meaningful work comes from the application of only 20% of your efforts has come to be a business mantra that causes people to rush back to the data to discover which 20% of their customers are responsible for wasting 80% of their time. I hold an alternative view to this principle, which I call the 20 Rule.

Tim Ferris (author of The 4 Hour Work Week) proposes that you’re wasting 80% of your time chasing the needs of only 20% of customers, and you should “fire” non-productive customers to free up more of your productive time, then you might well be missing out on some valuable opportunities. I built 2 very successful businesses catering very specifically for the needs of the 20% that the Pareto Principle suggests you weed out.

One of the dangers of the 80/20 Rule, particularly for business owners, or if you’re a manager, for achieving your business revenue and targets, is that if 80% of your revenue comes from 20% of your customers, what happens if you lose one of those big customers? Each one of those makes a significant impact on your revenue. On the other hand, losing one of the 80% that contributes only 20% of your revenue makes a much smaller dent. Not that we want to lose customers, but it is a reality, especially of small business. The smaller your business, the bigger your vulnerability to lost business.

Becoming very efficient at servicing the needs of the 80% has shown very successful results for both of my businesses. In one instance, it resulted in bulletproof systems that allowed me to expand the business from 20 customers and 600 transactions pm to over 100 customers and over 6000 transactions pm without making a significant impact on the man hours needed to service the additional load. It also means that if I lose one customer, I don’t get pressured into making handling errors like Brian did on Friday when he was chasing down the world record.

The Mantra

How did I get this right? Some call it Systems Engineering. Some call it Process mapping. I call it my mantra. The constant voice in my head reminding me how I don’t like to work. So the question I’m always asking myself is “how can I work less, serve more customers, and at the same time, give them (all my customers, not just 20% of them) a better service.” This leads to a relentless focus mainly on the 20% of customers who account for 80% of my workload. Constantly making processes more efficient results in a more reliable, consistent and predictable service for my customers. Every request or a problem raised by a customer gives me the opportunity to add value to the 20% of customers who are responsible for taking up 80% of my time. Reducing the time it takes for every deliverable, no matter how big or small the time saving, and eliminating possible future errors, may take me 10 times longer to resolve one issue, but in doing so, I’ve made it possible to resolve the same problem, or deliver the same service to all my other customers. I’ve created robustness in the business adding consistency to the way the problem is dealt with in future, ensuring the same predictable customer experience. It also builds standardization into the business which produces consistency.

Effectively, I’ve moved repetitive and time-consuming tasks from the 80% of my efforts side of the Pareto equation to the 20% side, leaving more time to apply the same exercise to the next and the next issue no matter how big or small. Or to write books. Or to work on the vision board.

The 80-20 Rule in Practice

As I finished writing this article at a coffee shop, I laughed when I signed the bill – take a look at what the bill came to – he’s everywhere, even at the Mugg & Bean!

Something for you

Tim Ferris (The 4-Hour Work Week) suggests that you read before going to bed. He suggests fiction to set your mind adrift before you go to sleep. I fully agree. So here’s some fiction that comes highly recommended.

If you’ve enjoyed these newsletters, you’re sure to enjoy the novels I’ve written. Christmas is on its way, so here’s something for your Christmas holiday reading list, your gift list, or your collection of great books that you have to recommend to your friends, your spouse’s book club, and even grandma’s Thursday Brandy club.

I’ve bundled Lost Soul and Porter’s Rule in Softcover together for this week only. The regular price for the bundle is R 448. Order your bundle now and save R89. Bundle price is R339, (plus local delivery of R35 anywhere in SA) delivered to your door. To order, simply click here, press Send, and I’ll get the details from you in a separate email. The promotion ends just after my birthday, which gives you until 15th November to place your order. You can send me expensive bottles of whiskey on November 9th.

Take care, and all the best