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Applications
of the
80/20
Theory of the Firm |
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Internally,
some resources, be they people, factories, or machines, will produce
very much more value relative to their cost than will other
resources:
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80% of the surplus is usually generated
by 20% of employees;
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80% of the value created is likely to be
generated in 20% of time when, through a combination of
circumstances, the employee is operating at his/her highest level of
effectiveness.
Action Implications:
Any corporation can raise the level of surplus by reducing the
inequality of output and reward within the firm. They can do it by
identifying the parts of the firm that generate the highest
surpluses and reinforcing these, giving them more power and
resources; and, conversely, reducing or stopping the expenditure on
non-performing resources.
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Do You Practice the
Inclusive Company Approach?
At the heart of the
inclusive approach is the belief that understanding stakeholder needs –
the needs of customers, employees, suppliers, shareholders and society, and
the environment – and incorporating them into the
enterprise strategy
and sustainable value creation activities are central to the achievement of
sustainable growth and
competitiveness.1...
More
The
Tree
of Business Success
Sustainable Competitive Advantage
Case in Point
Konosuke
Matsushita
Konosuke Matsushita,
the legendary founder of Panasonic, believed that a company should create
wealth for society as well as for shareholders. Business and production, to
Matsushita, were not meant to enrich only the business owners, investors,
employees or shops, but all the rest of the society as well.
The Matsushita Basic Business Philosophy
consists of three elements.
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Basic Management Objective –
expresses the corporate goals of the company: " Recognizing our
responsibilities as industrialist, we will devote ourselves to the
progress and development of society and the well being of people through
our business activities, thereby enhancing the quality of life
throughout the world."...
More
Matsushita's
10 Management Lessons
Create Customer Value: 10
Lessons
Strategic Innovation
Strategic innovation is a holistic systematic
approach focused on generating beyond incremental,
breakthrough or
discontinuous innovations. Innovation becomes "strategic" when it is an
intentional repeatable process that creates a significant difference in the
value delivered to consumers, customers, partners and the corporation. A
Strategic Innovation initiative generates a portfolio of breakthrough
business growth opportunities using a disciplined yet creative
process...
More
Business Architect
Do You Harness the Creative Power of Your Employees?
"The best way to
create value is to
innovate
your way
ahead of the competition in order to create temporary monopolies where
yours in the only show in town. You can do this by
harnessing the creative power of your greatest asset,
your people.
The goal is to turn them into
opportunistic entrepreneurs who are constantly looking for
new ways of
doing business," says Paul Sloane.2
Systemic
Innovation: 7 Areas
Do You Apply the 80/20
Rule?
The
80/20 Principle
states that 80% of your results come from 20% of your efforts and activities
and that the progress means moving resources from low-value to high-value
uses. Look through your list of ideas and circle the 20% that will yield 80%
of the results you are looking for...
More
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