The 60–40 Rule of Business
One rule to rule them all. The 60–40 rule is like the surfboard of business. It allows you and everyone else to roll with the flow.
The first time I heard about the 60–40 rule was actually from my dad. A mentor of mine and the CTO and founder at BoardwalkTech. A company dedicated to increasing the GDP of a given enterprise, from concept to consumer.
He mentioned it when I was starting my own company, circa 2016, and I was looking for a cofounder. I ended up finding one. And we built a team, and a company called Blackbird. A company that is focused on empowering creative professionals, by providing a platform to connect them with new opportunities. From Netflix to music tutoring.
In any event, I was suddenly a CEO and Founder, and I had a lot to lead (and learn), coming from a computer science and journalism background in school. Essentially every meeting was mine to prepare while my co-founder Steven Birdwell took on the daunting task of bringing in creatives so we would have a critical mass of users that we could then go to enterprise companies and offer services on their behalf, via a mobile app, available in the app store and google play store.
As an aside, lately, we’re planning on licensing digital ledger technology, so that creatives can track their intellectual property, from my BoardwalkTech no less.
So let’s just say my dad and I were very much in touch, and it was during this time in my life, that my dad went from being my dad to being an actual friend and business partner.
One of the greatest things about learning leadership and skills in business from my dad was his standard of ethics. I mean, he walked a very straight line in that regard and would offer morsels of information on how to get the most out of a given individual while teaching me when to trust and delegate.
But no morsel was better than this morsel. The 60–40 rule.
So let us break it down. Often, in crafting the vision, and doing a lot of the groundwork yourself, you might inevitably be leading meetings without taking too much input or allowing people to contribute to your idea. After all, you are the Founder. You came up with the idea that attracted people to work for you in the first place. It’s natural. It is your conviction. You do not just quit your job to start a company without that conviction. Now, that conviction can be incredible, most of the time, but sometimes it can be detrimental.
At one point, I started to see a drift, from some of our key guys at the time, so I told myself that it would be mindful to apply this ‘60–40’ technique, which as a vigorous young 26-year-old, seemed a little a cheeky.
60 + 40 equals 100 for all of you math wizards out there. Now, when you have an idea, likely, you have a 100% of it worked out in your head or maybe not (either way, you can use the 60–40 rule to your favour). You likely see it in your mind's eye and you cannot wait to present that to your team in a meeting that you have set up.
Now, the problems with presenting 100% of your idea are many. You immediately omit the opportunity for people to contribute even a small percentage to the idea, you eliminate the feeling of mutual conversations for everyone else in that meeting, and you end up acting like a dictator.
Look, at the end of the day, whether right or wrong, people want to feel that they are contributing, and as a leader, you need to make sure they feel that they are. The more you do this, the more they will actually contribute, as opposed to just feeling like they are.
Enter the 60–40 rule.
Rather than bringing 100% of your idea to the table during a meeting, expose only 60% of it and keep the rest of the 40% in your back pocket.
This allows the following to happen:
a.) You are not dominating the meeting and force-feeding ideas. Neglect this enough and you are bound to sow discontent, and then “you reap what you sow” right?
b.) The 40% you have not revealed is your ace in the hole, so leave that for the very end. Allow your team to work together on the idea from the 60% you’ve laid out on the “whiteboard” (as redundant as it may seem to you) and allow the conversation and ideas to organically accumulate to 100%. Chances are they will come up with ideas and insights you did not consider before.
c.) In this process, you are empowering your colleagues, and making them feel like it is their idea too. If you do not do this, they will (eventually) tune out. Your hope is that great minds will think alike and they will mention the same things you have in your back pocket. In most cases, they will, with subtle nuances that you can ponder later. But sometimes it will go in a direction you never expected. So be prepared, and allow the ideas to flow.
Most importantly, you are creating a symbiotic conversation so be sure to ask everyone in the room to speak up. And if they have nothing to offer in that particular meeting, understand your people. Maybe they are quiet but more speculative. Ask them to give them their input via written form, or in a 1 on 1 scenario.
d.) While conducting the meeting, make sure to consider every idea. Try your best to get to 100%, in a different manner than you did yourself.
Only discount or question ideas that are negative or not progressive.
Remember, you have the answer in your back pocket, and you only want to reveal this if everyone is having a mind fart. In which case, perhaps you need to reevaluate your staff.
e.) As you are working to 100% with your team, it is okay to pull out tidbits of the remaining 40% of the concept you have in your back pocket.
At some point, you will need to reveal your hand and say, “Team, this is what I was thinking, but I’ll put a bookmark in that because of your contributions”.
You are acknowledging their contributions and discounting your own. People will, subconsciously or otherwise, relate to that in a positive way.
This gives the opportunity for everyone to peer into what you had all along. It will also show everyone that you were prepared, while still being open enough to receive their insights.
If your team knows you acknowledge their contribution, everything will gel together. As much as I love Steve Jobs, most of us are not him, so you have to work with the flow. The 60–40 rule is like the surfboard of business. It allows yourself and everyone else to roll with the flow.
f.) Finally, what if you have something where you do not have 100% of it worked out? This is a great opportunity to reveal what you do have and then engage the team in a productive way to get to a 100%. In a way where even the intern feels like “Okay, there is a future for me here”. With the right team, you will end up getting to a 100. Do not ever reveal whether you have the rest of the answer. Keep them guessing. Only reveal it in the subtle most manner.
One only needs to think about a conversation in daily life. Use case: You are having a beer with your friends. Are you going to dominate the conversation and brush everyone off to the side? Maybe too many tequila shots and you bring up politics but don’t allow anyone else to speak?
As a leader, as a founder, often you will find that you are so used to doing most of the talking that you forget that there are other people with valid, thoughtful opinions. And there are times, many times in fact, where you need to curb your enthusiasm.
You can then apply this to your life. To your intimate relationships. The 60–40 rule, like many rules, or concepts in business apply to other aspects of your life. I wish I had the sense to use this when I was in relationships during my mid 20’s. I wish I had listened more, and talked less. Even if I already had my mind made up.
You never know what you will receive. You may receive a game-changing idea, or you may meet a colleague that you will trust for the rest of your life.
Either way, let it flow. And the only way to do that is to acknowledge that you do not have all the answers. Otherwise, what differentiates you from a cult leader? A little bit of a dramatic comparison, but still.
Take heed my friends.
Good luck,
Roh Krishnan
