American Express Open Forum Book Review – The 90% Rule

Originally published as – Guru Review: The 90% Rule
by Matthew E. May , Founder, Shibumi Creative Works
August 16, 2011

From time to time I run across a book that is under the radar. Maybe it’s a niche book, a vanity book, a book that for whatever reason doesn’t fit the traditional model, or is self-published. As more and more authors choose to self-publish—some estimate that as high as 50 percent of the 11,000 business titles published annually are now self-published—more and more you can’t ignore the category, because some really good stuff falls into that bucket. And sometimes, simply because the book is off the radar, you don’t discover it until well after it’s been published.

That’s the case with the book we’re reviewing this week. It’s a book about how entrepreneurial thinking can inspire innovative and sustainable growth in your company, called The 90% Rule: What’s Your Next Big Opportunity? It was published in 2010 by Ken Tencer and John Paulo Cardoso, who co-own a small strategy and design firm called Spyder Works that has worked with some well known brands.

Although the authors intended the book for organizations of all sizes and shapes, I think it’s most appropriate for small business owners. After all, the authors are successful small business owners themselves.

Big idea:

The greatest opportunities for growth and success are based on what your company is already 90 percent capable of doing. In other words, it makes no sense to try and become an expert in a whole new field or own a new market when your next big opportunity in all probability lies in a simple extension or rethinking of your current business, brand or mastery.

Key takeaways:

The 90% Percent Rule integrates three fundamental principles of good business: Leverage, process, and entrepreneurial thinking into a pragmatic approach to business development. The authors employ a six-step process to identify opportunities to grow business and focus on those that will bring the most success. They use the visual you see below.

  • Step 1: Square. Revisit your company’s beginnings and identify where you want to take it long-term. Foresight requires insight, which in turns demands hindsight. Looking back helps you identify the original driving forces behind growth. “Inspiration always has a starting point and where you will be tomorrow can draw heavily on the origins of that spark.”
  • Step 2: Arrow. “Explore what can be, not just what you are. Entrepreneurs and innovators are ahead of the curve, ahead of the market, ahead of current thinking; whereas good managers are just slightly ahead of current thinking; average managers demonstrate current thinking; and managers who are behind the curve lose.”
  • Step 3: Circle. Build a relevant brand rooted in customer-centric thinking. What is a relevant brand? It’s one that “delivers what the customers want in a way that is compelling and clearly differentiated from your competition. Whether you are building a company or selling a product or service, they should all be branded to ensure they find a relevant and lucrative market.”
  • Step 4: Three arrows. Maximize leverage by outlining your best opportunities and the criteria upon which to assess them. Your company will “benefit far more from a growth strategy built on leveraging relevant opportunities than it can from ever-changing strategies and tactics based on short-term performance and chasing fragmented growth and hope.”
  • Step 5: Matrix. Build an opportunity matrix to determine the human and financial resources required for moving ahead, built along a horizontal axis of short-term to long-term, and a vertical axis of human capital to financial capital. Quadrant 1 (upper left) is short-term implementation based on financial capital. Quadrant 2 (upper right) is long-term implementation based on financial capital. Quadrant 3 (lower right) is long-term implementation based on human capital. Quadrant 4 (lower left) is short-term implementation based on human capital.
  • Step 6: Waves. Speak to be heard clearly by all your audiences. Thousands of great products, services and ideas fail simply because they don’t get noticed or no one understands them. A clear, compelling and consistent communication strategy “goes a long way to converting your opportunities and sustaining a relevant brand.”

Liked most:

The simple language and clear example make The 90% Rule very easy to read and understand. Take this example of how to apply it to company growth:

“Define your prior year’s sales as your core sales. Set those core sales as 90 percent of the next year’s sales. If this core 90 percent of your business grows at 5 a year, then that generates 4.5 percent annual growth. Now, add a new product, service, store or vertical that expands your sales base by an additional 10 percent. Result: You will achieve annual growth of 14.5 percent. If you can continue this incremental growth strategy, your business will double in size in about five years. Just as important, that growth will require only moderate investment in terms of financing, staffing, and operations. Your business can make a big impact with small, logical, manageable next steps.”

Best for…

If you’re a fan of strengths-based performance, believe in the “hedgehog” principle (do one thing and do it better than anyone else), and buy into the popular idea that it takes 10,000 hours to become an expert or master in something, you’ll like this book—for the simple reason that wherever you are, you’re already 90 percent of the way there. It’s what you do with that 90 percent, of course, and the remaining 10 percent, that make the difference.

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