Richard Koch is the bestselling author of The 80/20 Principle, which has sold over a million copies and been published in thirty-one languages. He is also a highly successful entrepreneur and investor, whose ventures have included Filofax, Plymouth Gin, Belgo, and Betfair. He was formerly a partner of Bain & Company and cofounder of LEK Consulting.

The 80/20 Manager

The Secret to Working Less and Achieving More

Little, Brown and Company

Way Two: The Superconnecting Manager

It is remarkable that people receive crucial information from individuals whosevery existence they have forgotten.

Professor Mark Granovetter

Creativity comes from spontaneous meetings, from random discussions. You runinto someone, you ask what they're doing, you say "Wow," and soon you're cookingup all sorts of ideas.

Steve Jobs

Weak links, powerful effects

Who do you think can provide the most help in your work and life? Your closecolleagues? Friends and family? Or people you hardly know and rarely see?

The answer is surprising. Great leaps forward in our lives—such as gettinga fantastic new job or finding the key to transforming a business—are morelikely to come out of the blue, from casual acquaintances, than from our closefriends and colleagues. The art of being a superconnecting manager iscultivating a wide range of diverse casual acquaintances, and fully utilizingthe "weak links" we all have in profusion. I shall use an important turning-point in my own life as an illustration.

When I was thirty-three and working for Bain & Company, two colleagues and Idecided to start our own consulting firm, LEK. It was hard. Bain & Company suedus and stopped us taking our clients with us, something we had banked on beingable to do. Our small pot of capital was dwindling fast and we desperatelyneeded to find a big client. We called all our friends and close businesscontacts, but that didn't get us anywhere. Finally, the three of us sat down towork out what to do next. Iain and I were glum; Jim was more upbeat and can-do.Iain and I put it down to him being American.

"Here's what we should do," Jim said. "Take a sheet of paper and write down thename of every manager you know who works in a large company. Includeeveryone, even if you don't know them that well—former colleagues,acquaintances from college or business school, friends of friends. Don't worryif you haven't seen them for years. Take them out to lunch or for a drink afterwork to catch up. Tell them what you are doing and see if they have any ideas."

That was how I ended up in Julie's Wine Bar near the Portobello Road in Londonwith Nicholas Walt, a distinguished-looking former colleague from BCG. He wastall and slender; his signature trait was walking with a ramrod-straight back,like an old soldier. We had vaguely known each other five years earlier, hadnever worked or socialized together, but had got on well in the office andshared a subversive sense of humor. I'd met him twice since leaving BCG, when hehad tried to hire me for a large firm.

The wine acted as an effective anesthetic as he rattled off a long series ofstories about the delights of becoming a father in his early fifties. I tried tosteer the conversation to his role within the Imperial Group, one of Britain'slargest conglomerates, with interests in tobacco, food manufacturing, leisure,restaurants and hotels, but all Nick wanted to talk about was how his son hadgiven him a new lease of life. If his boy was gurgling with pleasure, so was hisdad.

Eventually, though, I managed to stem the flow and explained that we werefinding it very tough to get our new venture up and running. The phone simplydidn't ring as it had when I was in a big firm.

Nick empathized: "The strain must be enormous," he said. But all I got out ofhim that evening was another glass of wine and some sympathy.

So it was something of a surprise when I answered the phone two weeks later andheard Nick on the other end of the line. He started asking questions about thesize of our firm. I admitted there were only seven of us.

"Hmm," he said.

There was an extremely long pause.

I said nothing.

"Well," he eventually resumed, "I wanted to tell you that our food division isorganizing a beauty parade of strategy consultants. We've made a short list ofMcKinsey and BCG. I'll see if I can get you invited to make a presentation, too.Individually you have a lot of high-level experience, even if your new firm istiny. Don't expect them to pick you for such a big assignment, but pitching willbe good experience for you."

To cut a long story short, McKinsey was selected while we were congratulated oncoming second. We were quite pleased with that—it was good to be mentionedin such illustrious company. (McKinsey and BCG were the world's biggest and mostacclaimed strategy consultancies at the time.) But then, at the very lastminute, after a restless night, Gerry Sharman, the boss of the food division,had a change of heart. Gerry was a tough old bird who had come up the hard way,and he didn't like McKinsey's "snootiness." He also thought we had made the bestpresentation. So, in the end, he offered us the contract. The other two firmswere taken aback, which pleased Gerry immensely.

Later we worked with other Imperial divisions, and ultimately at the corporatelevel. But that first contract came at a critical time for our firm. It gave usthe confidence to hire aggressively and helped us win other major clients.Without it, who knows what might have become of our fledgling firm?

At the time, I viewed it as a stroke of pure luck, given that it had arisen froma contact so weak that I had almost not even bothered to call Nick and suggest aquick drink after work. I met up with him a couple of times over the next fewyears and of course thanked him profusely, but as I write this I'm ashamed tosay that we haven't spoken for twenty-one years. Not even a call or an email.Nevertheless, that chat in Julie's Wine Bar was a critical moment in my life.When I left LEK six years later, I had enough money to do whatever I wantedthereafter. Largely thanks to Nick Walt.

Weak links—information provided by acquaintances—are often morepowerful than the supposedly strong links of close friends and family. Longafter my encounter with Nick, I discovered that a sociologist called MarkGranovetter had written a seminal paper about "The Strength of Weak Ties." HisPh.D. project at Harvard had focused on how managers got new jobs. To hissurprise, his research revealed that most managers found theirjobs—especially prestigious and well-paid jobs—through personalcontacts rather than through advertisements, formal applications or recruitmentconsultancies. Even more astonishingly, only one in six managers heard abouttheir job through close friends and family. The great majority of leads camefrom colleagues and casual acquaintances, with a quarter coming from a personwhom the successful applicant hardly knew at all:

In many cases, the contact was only marginally included in the current networkof contacts, such as an old college friend or a former workmate or employer ...Usually such ties had not even been very strong when first forged ... Chancemeetings or mutual friends operated to reactivate such ties. It is remarkablethat people receive crucial information from individuals whose very existencethey have forgotten.

Granovetter speculated why friends and family—who are strongly motivatedto help—are usually less valuable than casual acquaintances in our careerturning points. He came to the conclusion that our friends, family and closecolleagues form a "closely knit clump of social structure" where most contactsare in touch with the others. These close contacts have access to the sameinformation that we have, but not much more. So we have to move outside ourimmediate circle and contact the distant extremities of our social network togain fresh insights and learn new information. This means renewing contacts withpeople from the past or cultivating new links with friends of friends.

This works especially well if you and your new contacts come from differentbackgrounds, do not share many mutual friends, work in contrasting occupations,and/or live far from each other simply because their contacts and knowledge willbe very different from your own.

Red and green lottery tickets

Imagine that you can acquire an unlimited number of lottery tickets. Of course,the chance of winning the jackpot with any individual ticket is low, but themore tickets you collect, the greater is your chance of success. Now, imaginethat the tickets are available in two colors, red and green. The red tickets areextremely expensive. You can "buy" them only through putting in several years'hard work. So, for instance, you will get a single red ticket once you acquire adegree and another after amassing a considerable amount of work experience.These red tickets are the conventional, traditional route to success and no oneis able to accumulate many of them during their lifetime. Moreover, despitetheir very high price, even winning red tickets tend to result in only modestprizes.

By contrast, the green tickets are cheap, sometimes almost free. Hundreds ofthem can be acquired without any hard work and they arrive quickly, often as apleasant surprise, an unexpected windfall. They comprise information from casualacquaintances that we can turn to our advantage. Most of the time, these greentickets—just like the red ones—don't result in a jackpot ... but afew of them do. For me, Nick Walt was one of my jackpot-winning green tickets.The minimal effort of walking to a wine bar turbo-charged my career.

In the game of Monopoly, a set of two or three properties of thesame color is much more valuable than four or five unrelated properties.But in life, a set of two differently colored tickets, one red and onegreen, is the way to win. A good qualification or work experience—redticket—may be invaluable, but so is the information—greenticket—that levers up your expertise. Given that the two colors haveroughly the same value and chance of securing the jackpot, and that the greentickets are much cheaper than the red, it makes sense to acquire as many of theformer as you can. This is the Principle in action.

I have hit the jackpot with several winning tickets during my lifetime:

• I gained a good undergraduate degree, which gave me confidence andmarketability (red ticket), but I acquired it through very selective study(green ticket).

• I learned that two colleagues were contemplating starting a new consultingfirm (green ticket), and joined them when they took the plunge.

• I met Nick Walt at Julie's Wine Bar and reaped the benefits over the next sixyears (green ticket).

• I made investments in five new or young firms based on information provided byacquaintances (green tickets), which again led to large returns.

• I met my current circle of close friends, as well as my partner, throughacquaintances (green tickets).

As you can see, all but one of these winning tickets was green. If you compileyour own list of life-changing events, you will probably get a similar result.You are much more likely to win with a green ticket (acquired through little orno effort) than with a red ticket (acquired through enormous effort), althoughit helps to have both if you are planning to scoop the jackpot.

You might like to think that the green tickets arrive through pure luck. That isalmost true, except for the fact that you have to invest a little effort to getyour hands on them, such as going out and meeting someone you hardly know. Butremember, the more tickets you acquire, the more luck you will have, and greentickets are much easier to acquire than red. Typically, at least 99 percent ofour effort goes on acquiring those rare red tickets, even though they have nomore chance of securing the jackpot. Meanwhile, we devote the remaining 1percent to acquiring hundreds of green tickets, every one of which might lead tomost of what makes life rich and fun.

By now, you should have worked out exactly what to do: concentrate on extendingyour network of weak links both inside and, crucially, outside work so youacquire as many green tickets as possible. This will allow you to gain insightsand information that your colleagues do not possess. Maintain a raft of distantbut friendly acquaintances who have the potential to give a high payoff for verylittle effort on your part.

You have no way of knowing where any single contact might lead or how high itsvalue might be. But eventually you are likely to win that life-changing jackpotbecause of one of them.

Superconnectors

It gets even better, though. By far the greatest benefits of weak links accrueto the few people who have the most personal contacts. This finding—animportant one for successful managers to take on board—came from researchconducted by one of America's greatest social psychologists, Stanley Milgram. In1967 Milgram experimented to see how "big" or "small" the world really was. Hewas curious to learn whether people far away from each other, socially andgeographically, could be reached through a series of weak links; and, if so, howmany links were typically needed to connect them.

Milgram enlisted volunteers in Wichita, Kansas, and Omaha, Nebraska, to see ifthey could get a folder to a target person they didn't know who lived faraway—in Cambridge, Massachusetts, and Boston, respectively. The volunteershad to post the folder to someone with whom they were on first-name terms andwho might be "closer" to the target person. (Milgram's studies were conductedlong before the internet, email and online social networks.) This friend wouldthen be invited to post the folder on to one of their friends or acquaintances,who would do the same, until either the chain broke or the folder reached thetarget person.

Milgram reasoned that if the folders made it all the way to the target person ina relatively short chain of contacts then we lived in a "small world," whereacquaintances can act as stepping-stones to anyone we want to reach. He and acolleague wrote, "The phrase 'small world' suggests that social networks are insome sense tightly woven, full of unexpected strands linking individuals farremoved from one another in physical or social space." If the folders didn't getthrough, that would indicate a "large world," where there are unbridgeable gapsbetween discrete groups of people because nobody has a foot in both camps.Similarly, if the folders reached the target person eventually but through avery large number of links, the world could still be viewed as "large," becausethe links would be so inefficient as to be unusable.

The results vindicated the "small world" thesis. In the Nebraska study, 160chains were started and 44 completed. The number of links in the chains variedbetween two and ten, with the average five—much lower than the researchersexpected. Eerily, this is precisely the number guessed by a character in a shortstory called "Chain Links," published in 1929. The Hungarian author, FrigyesKarinthy, wrote, "To demonstrate that people on Earth are much closer than ever,a member of the group suggested a test. He bet that we could name any personamongst Earth's one and a half billion inhabitants, and through at most fiveacquaintances, one of whom he knew personally, he could link to the targetperson." The idea was later adopted by John Guare for his play Six Degreesof Separation, which was subsequently turned into a Hollywood movie. Laterresearch using emails and instant-message communications showed results thataveraged between five and seven links. This is a truly remarkable case ofscientific research vindicating popular American folklore derived ultimatelyfrom a forgotten Hungarian writer—in itself a demonstration in miniatureof the "small world" in action.

For managers, Milgram's most telling finding concerns the identities of the mostpopular links. In another of his "send the folder" experiments, the targetindividual was a stockbroker who worked in Boston but lived in the suburb ofSharon, Massachusetts. Of the forty-four folders he received, no fewer thansixteen of them came via one final "funnel," a shopkeeper called "Mr Jacobs" (apseudonym) who sold clothes in Sharon. The stockbroker, Milgram reported, was"shocked" at how many of the folders came through Jacobs. Milgram called Jacobsa "sociometric star." The small world exists only because a relatively smallnumber of people—like Jacobs—form most of the links between the restof us.