Koch - The 80/20 principle and 92 other powerful laws of nature

Praise for
The 80/20 Principle and 92 Other Powerful Laws of Nature

This book boils down the insights from science, from Newton to now, to compile a practical manual for success in business and life. Its a terrific tour-de-force.

James A Lawrence, Executive Vice-President, General Mills

Intriguing and very unusual. Koch is saying things that really need saying, but that you dont hear said elsewhere. Both intellectual and practical, the book is above all highly readable and thought provoking.

Dr Jules Goddard, Fellow, London Business School

Exciting stuff! The Power Laws touches on many of the most important debates going on in academic and business circles, and yet goes beyond them in generating ideas for anyone in business. A major shift in the way we think about the corporation and management is imminent, and this book makes a major contribution to fresh thinking.

Dr Marcus Alexander, Director, Ashridge Strategic Management Centre

The theory of business genes alone is a good reason for buying this book. And we get sixteen other major scientific principles thrown in as well! The content is academically respectable and often state-of-the-art, but what is particularly impressive is how accessible it all is. Clear and simple, but also authoritative and bursting with insight.

Dr Peter Johnson, Fellow, Exeter College, Oxford

I never knew that science could be so useful in business! A real revelation.

Chris Outram, Senior Partner, OC&C Strategy Consultants

Evolution by Natural SelectionBusiness GenesGauses Laws

Evolutionary Psychologythe Prisoners DilemmaNewtons Laws

RelativityQuantum MechanicsChaosComplexity

The 80/20 PrinciplePunctuated EquilibriumThe Tipping Point

Increasing ReturnsThe Paradox of EnrichmentEntropy

Unintended Consequences

Fishers fundamental theorem of natural selectionthe experience curvetime-based competitionUlams dilemmaMendels laws of hereditaryDNA and its structurememeslifelinesthe Hardy-Weinberg lawecological niches and MacArthurs warblersowners and intrudersthe endowment effectthe ultimatum bargaining gamecultural evolution in animalsneuroplasticitygame theorythe red queen effectthe evolutionary arms raceRidleys theory of social coagulation division of laborRicardos theory of comparative advantagetheory of co-opetition Linus lawDiamonds principle of intermediate fragmentationblack holesGdels incompleteness theoremthe medium is the messageHeisenbergs uncertainty principlethe principle of complementaritySchrdingers catsensitive dependence on initial conditionsthe butterfly effectfractal similaritiesthe principle of impotencethe hinge factorfirst mover advantageemergenceself-organizing systemsthe edge of chaosZipfs rank/size lawSimons theory of clumps and lumpsGutenberg-Richer lawParkinsons lawsCyert & Marchs theory of organizational slacklandscapesZipfs principle of least effortJurans rule of the vital fewVon Foersters theoremthe 50/5 principleMendeleevs periodic table control theoryFermats principle of least timetrichotomy lawplague theory crossing the chasmexponential growthFibonaccis rabbitsbig bangSays law of economic arbitrageFreuds reality principlelaw of diminishing returnsMoores lawMetcalfes lawthe theory of industry sweet spotsMurphys lawstheory of the second bestsystem dynamics

The 80/20 Principle and 92 Other Power Laws of Nature

To Lee

Richard Koch

This new edition first published by

Nicholas Brealey Publishing in 2013

www.nicholasbrealey.com

First published as The Power Laws (UK) and

The Power Laws of Business (US) in 2000

Richard Koch 2000, 2013

The right of Richard Koch to be identified as the author of this work
has been asserted in accordance with the Copyright, Designs and
Patents Act 1988.

ISBN 978-1-85788-611-5

eISBN 978-1-85788-918-5

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library.

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording and/or otherwise without the prior written permission of the publishers. This book may not be lent, resold, hired out or otherwise disposed of by way of trade in any form, binding or cover other than that in which it is published, without the prior consent of the publishers.

Vary, reinvent, multiply, and vary again

Find the best business genes and vehicles

Differentiate

Manage and mutate Stone Age man

Cooperate with the best cooperators

Escape from the gravity of competition

Think service-time

Pursue both/and

Exploit the fractal nature of business

Achieve more with less

Identify sweet spots in emerging networks and dominate them

Sustain success by creating new value every day

Practice a few routes to success that really work

Each of the 12 chapters of this book covers a major power law or a cluster of major power laws, of which there are 17. Each chapter contains a clear message that works brilliantly well in business, and often in life generally. If you turn back to the Contents page, you can see the major power law(s) described for each chapter, followed by the main action implication. When you read the chapters themselves, you will also find other, less major, power laws described, together with some other action implications (and, of course, a detailed explanation of the major action implication). There is a total of 93 power laws, which are listed below.

In the text, Major Power Laws are in bold italics with the initial letter of each word capitalized, and Minor power laws are also in bold italics, but with only the first word capitalized.

In order of appearance