In this assignment, I have to condense what I found to be most helpful in Koch’s book: 16X
First, I will briefly explain what Koch’s 16X principle is, and it’s predecessor Pareto’s law.
Pareto’s law, or the 80/20 principle, states that 20 percent of efforts account for 80 percent of results. For example, 20 percent of the population owns 80 percent of the wealth, 80 percent of crimes are committed by 20 percent of criminals and 80 percent of sales are made by 20 percent of clients. The list goes on and this pattern repeats everywhere in life. If 20 percent of inputs account for 80 percent of outputs, that means 20 percent of our time is 16X more valuable than the rest. Let me break down the math. 80 units of results divided by 20 units of effort = a payback factor of 4. Whereas, 20 units of results divided by 80 units of effort = a return factor of 0.25. 4 is 16 times 0.25. Your most efficient time is 16X more valuable than the rest. That is the 16X method.1
Focus on efficiency. As Koch put it; “Knowing the best uses of your energy is much more important than trying harder or working longer…Most of what you do is a waste of time…You might as well stop most of what you do! You can put less energy in, yet get far better results, if you concentrate on the things that produce fantastic results.” 2 Focus on efficiency, not hours. Koch says, “So instead of throwing more effort at whatever situation or problem you face, consider which efforts you could discontinue… It’s about emptying your days of those things that don’t justify your time and effort because they give such a poor return.” 3 “What gives great results? Always, a very few things. So the secret is in finding the few things that are really powerful.” 4
The fact is, everyone has their specialties. In a team or business, the key is surrounding yourself with complementary partners. If you have a weakness, try to find a partner who will fill your weakness. As Koch said, “Ego and vanity need to be kept on a tight leash. Once you have some leeway to do things your way, the next great leap forward is to find a few influential individuals who can leverage your efforts 16 times.” 5 Furthermore, “You shouldn’t think of 16X as a solo act… The key to 16X collaborations is making careful choices. We need only (a) very few people to help us… So start out targeting the top people, the handful who can help you most. You think you’re shooting too high. Shoot anyway.” 6
Finally, he advises to recycle the world’s best ideas. In his words, “Powerful words are out there, available free, just waiting to be applied to a new context… The truth is, out of the tens of thousands of business ideas ever tried, there’s a tiny percentage, and a tiny number, that deliver the great majority of value. I believe we can boil it down to there ten top priority ideas:
- Market Leadership. Be the biggest of your type.
- Low Cost Volume. Be the cheapest.
- Build on Your strengths. Make your best attributes even stronger.
- Delegate. Train a lower cost person.
- Self-service. Make the customer do the heavy lifting.
- Subtract Something. Differentiate by deleting.
- Create a New Niche Category. Split an existing category into two.
- Personalize. Let customers tailor your offering.
- Do It Faster. Use speed to justify a higher price tag while lowering production costs.
- Do It Smaller. Go “little” to reduce costs and increase convenience.
To conclude: Focus on the efficient twenty percent, not the eighty percent. Focus on your strengths and get someone else to help you with your weaknesses.
(1) Richard Koch, The Breakthrough Principle of 16X, p. 11&12. (2) Koch’s, The Breakthrough Principle of 16X, p. 13. (3) Koch’s, The Breakthrough Principle 16X, p. 16. (4) Koch’s, The Breakthrough Principle 16X, p. 22. (5) Koch’s, The Breakthrough Principle 16X, p. 33. (6) Koch’s, The Breakthrough Principle 16X, p. 35.
Asher Sisneros 