The Bull pen on Business

Ever heard of the Mendoza Line? It comes from baseball and represents the lowest acceptable batting average for major leaguers (.200). Actually, the lowest acceptable batting average "for nonpitchers." Why make an exception for pitchers?

Pitchers are paid to pitch. That doesn’t mean that none of them can hit. Babe Ruth began his career as a pitcher (minor league Baltimore Orioles) and tossed 29 scoreless innings in World Series play. But the Sultan of Swat was not your average player.

As in baseball, so it is in the world of business. Based on studies by the Gallup organization, Marcus Buckingham and Donald Clifton contend that: "Excellent performers were rarely well rounded. On the contrary, they were sharp." Meaning, "You will excel only by maximizing your strengths, never by fixing your weaknesses." p. 26, Now Discover Your Strengths.

In his influential book, Good to Great, Jim Collins says: "much of what we’re doing is at best a waste of energy . . . People are squandering their resources on the wrong things." p. 205 & p. 211, Good to Great.

According to Richard Koch, "The 80/20 Principle suggests that . . . you should turn your company upside down and concentrate your efforts on multiplying [the small part that provides the most money]." p. 82, The 80/20 Principle.

What?

The numbers tell us that the world is tilted so the relationship between effort and results is out of whack. Generally, 80% of our efforts account for only 20% of our production. Or, the smallest portion (20%) of our efforts results in the largest portion (80%) of our pay.

Frank Bettger’s 1949 book, How I Raised Myself from Failure to Success in Selling, contains this illustration:

The records showed that 70 per cent of my sales were made on the first interview, 23 per cent on the second, and 7 per cent on the third and after. But listen to this: 50 per cent of my time was spent going after the 7 per cent. ‘So why bother with the 7 per cent’ I thought. 'Why not put all my time on first and second interviews?' That decision alone increased the value of each call [by over 50 per cent]. p. 15

Bettger’s statistics validate another principle – the 50/5 Principle tells us that 50% of a company’s efforts add less than 5% to revenues and profits. He was wasting half of his time going after 7%. It didn’t make sense. So he shifted his efforts to the categories of appointments that yielded better returns.

How would this work in your business?

You might want to consult the books I’ve mentioned:
How I Raised Myself from Failure to Success in Selling by Frank Bettger
Now Discover Your Strengths by Marcus Buckingham & Donald Clifton
Good to Great by Jim Collins
The 80/20 Principle by Richard Koch

Or you might prefer some help.