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Be more effective with less effort by learning how to identify and leverage the 80/20 principle: that 80 percent of all our results in business and in life stem from a mere 20 percent of our efforts.

The 80/20 principle is one of the great secrets of highly effective people and organizations.

Did you know, for example, that 20 percent of customers account for 80 percent of revenues? That 20 percent of our time accounts for 80 percent of the work we accomplish? The 80/20 Principle shows how we can achieve much more with much less effort, time, and resources, simply by identifying and focusing our efforts on the 20 percent that really counts. Although the 80/20 principle has long influenced today''s business world, author Richard Koch reveals how the principle works and shows how we can use it in a systematic and practical way to vastly increase our effectiveness, and improve our careers and our companies.

The unspoken corollary to the 80/20 principle is that little of what we spend our time on actually counts. But by concentrating on those things that do, we can unlock the enormous potential of the magic 20 percent, and transform our effectiveness in our jobs, our careers, our businesses, and our lives.

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From The 80/20 Principle:

"The 80/20 Principle can and should be used by every intelligent person in their daily life...It can multiply the profitability of corporations and the effectiveness of any organization. It even holds the key to raising the quality and quantity of public services while cutting their cost... The 80/20 Principle asserts that a minority of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards. Taken literally, for example, 80 percent of what you achieve in your job comes from 20 percent of the time spent. Thus for all practical purposes, four fifths of the effort--a dominant part of it--is largely irrelevant."

To learn how you can tap the hidden potential of the 80/20 principle in your life, read Richard Koch''s exciting new book.

From the Inside Flap

an be more effective with less effort by learning how to identify and leverage the 80/20 principle--the well-known, unpublicized secret that 80 percent of all our results in business and in life stem from a mere 20 percent of our efforts.

The 80/20 principle is one of the great secrets of highly effective people and organizations.

Did you know, for example, that 20 percent of customers account for 80 percent of revenues? That 20 percent of our time accounts for 80 percent of the work we accomplish? The 80/20 Principle shows how we can achieve much more with much less effort, time, and resources, simply by identifying and focusing our efforts on the 20 percent that really counts. Although the 80/20 principle has long influenced today''s business world, author Richard Koch reveals how the principle works and shows how we can use it in a systematic and practical way to vastly increase our effectiveness, and improve our careers and our companies.

The unsp

From the Back Cover

How anyone can be more effective with less effort by learning how to identify and leverage the 80/20 principle--the well-known, unpublicized secret that 80 percent of all our results in business and in life stem from a mere 20 percent of our efforts.
The 80/20 principle is one of the great secrets of highly effective people and organizations.
Did you know, for example, that 20 percent of customers account for 80 percent of revenues? That 20 percent of our time accounts for 80 percent of the work we accomplish? The 80/20 Principle shows how we can achieve much more with much less effort, time, and resources, simply by identifying and focusing our efforts on the 20 percent that really counts. Although the 80/20 principle has long influenced today''s business world, author Richard Koch reveals how the principle works and shows how we can use it in a systematic and practical way to vastly increase our effectiveness, and improve our careers and our companies.
The unspoken corollary to the 80/20 principle is that little of what we spend our time on actually counts. But by concentrating on those things that do, we can unlock the enormous potential of the magic 20 percent, and transform our effectiveness in our jobs, our careers, our businesses, and our lives.

About the Author

Richard Koch is the bestselling author of The 80/20 Individual. An extraordinarily successful entrepreneur, his ventures have included consulting for hotels, restaurants, personal organizers, and the distilling industry. A former consultant with The Boston Consulting Group and former partner of Bain and Company, he currently lives in London, England.

Excerpt. © Reprinted by permission. All rights reserved.

Introduction: Welcome to the 80/20 Principle

For a very long time, the Pareto law [the 80/20 Principle] has lumbered the economic scene like an erratic block on the landscape; an empirical law which nobody can explain.
--Josef Steindl

The 80/20 Principle can and should be used by every intelligent person in their daily life, by every organization, and by every social grouping and form of society.  It can help individuals and groups achieve much more, with much less effort.  The 80/20 Principle can raise personal effectiveness and happiness.  It can multiply the profitability of corporations and the effectiveness of any organization.  It even holds the key to raising the quality and quantity of public services while cutting their cost.  This book, the first ever on the 80/20 Principle, is written from a burning conviction, validated in personal and business experience, that this principle is one of the best ways of dealing with and transcending the pressures of modern life.

What is the 80/20 Principle?

The 80/20 Principle asserts that a minority of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards.  Taken literally, this means that, for example, 80 percent of what you achieve in your job comes from 20 percent of the time spent.  Thus for all practical purposes, four-fifths of the effort--a dominant part of it--is largely irrelevant.  This is contrary to what people normally expect.

So the 80/20 Principle states that there is an inbuilt imbalance between causes and results, inputs and outputs, and effort and reward.  A good benchmark for this imbalance is provided by the 80/20 relationship: a typical pattern will show that 80 percent of outputs result from 20 percent of inputs; that 80 percent of consequences flow from 20 percent of causes; or that 80 percent of results come from 20 percent of effort.

In business, many examples of the 80/20 Principle have been validated.  Twenty percent of products usually account for about 80 percent of dollar sales value; so do 20 percent of customers.  Twenty percent of products or customers usually also account for about 80 percent of an organization''s profits.

In society, 20 percent of criminals account for 80 percent of the value of all crime.  Twenty percent of motorists cause 80 percent of accidents.  Twenty percent of those who marry comprise 80 percent of the divorce statistics (those who consistently remarry and redivorce distort the statistics and give a lopsidedly pessimistic impression of the extent of marital fidelity).  Twenty percent of children attain 80 percent of educational qualifications available.

In the home, 20 percent of your carpets are likely to get 80 percent of the wear.  Twenty percent of your clothes will be worn 80 percent of the time.  And if you have an intruder alarm, 80 percent of the false alarms will be set off by 20 percent of the possible causes.

The internal combustion engine is a great tribute to the 80/20 Principle.  Eighty percent of the energy is wasted in combustion and only 20 percent gets to the wheels; this 20 percent of the input generates 100 percent of the output!

Pareto''s discovery: systematic and predictable lack of balance

The pattern underlying the 80/20 Principle was discovered in 1897, about 100 years ago, by Italian economist Vilfredo Pareto (1848-1923).  His discovery has since been called many names, including the Pareto Principle, the Pareto Law, the 80/20 Rule, the Principle of Least Effort, and the Principle of Imbalance; throughout this book we will call it the 80/20 Principle.  By a subterranean process of influence on many important achievers, especially business people, computer enthusiasts and quality engineers, the 80/20 Principle has helped to shape the modern world.  Yet it has remained one of the great secrets of our time--and even the select band of cognoscenti who know and use the 80/20 Principle only exploit a tiny proportion of its power.

So what did Vilfredo Pareto discover?  He happened to be looking at patterns of wealth and income in nineteenth-century England.  He found that most income and wealth went to a minority of the people in his samples.  Perhaps there was nothing very surprising in this.  But he also discovered two other facts that he thought highly significant.  One was that there was a consistent mathematical relationship between the proportion of people (as a percentage of the total relevant population) and the amount of income or wealth that this group enjoyed.  To simplify, if 20 percent of the population enjoyed 80 percent of the wealth, then you could reliably predict that 10 percent would have, say, 65 percent of the wealth, and 5 percent would have 50 percent.  The key point is not the percentages, but the fact that the distribution of wealth across the population was predictably unbalanced.

Pareto''s other finding, one that really excited him, was that this pattern of imbalance was repeated consistently whenever he looked at data referring to different time periods or different countries.  Whether he looked at England in earlier times, or whatever data were available from other countries in his own time or earlier, he found the same pattern repeating itself, over and over again, with mathematical precision.

Was this a freak coincidence, or something that had great importance for economics and society?  Would it work if applied to sets of data relating to things other than wealth or income?  Pareto was a terrific innovator, because before him no one had looked at two related sets of data--in this case, the distribution of incomes or wealth, compared to the number of income earners or property owners--and compared percentages between the two sets of data.  (Nowadays this method is commonplace and has led to major breakthroughs in business and economics.)

Sadly, although Pareto realized the importance and wide range of his discovery, he was very bad at explaining it.  He moved on to a series of fascinating but rambling sociological theories, centering on the role of elites, which were hijacked at the end of his life by Mussolini''s fascists.  The significance of the 80/20 Principle lay dormant for a generation.  While a few economists, especially in the US, realized its importance, it was not until after the Second World War that two parallel yet completely different pioneers began to make waves with the 80/20 Principle.

1949: Zipf''s Principle of Least Effort

One of these pioneers was the Harvard professor of philology, George K. Zipf.  In 1949 Zipf discovered the "Principle of Least Effort," which was actually a rediscovery and elaboration of Pareto''s principle.  Zipf''s principle said that resources (people, goods, time, skills, or anything else that is productive) tended to arrange themselves so as to minimize work, so that approximately 20-30 per cent of any resource accounted for 70-80 per cent of the activity related to that resource.

Professor Zipf used population statistics, books, philology, and industrial behavior to show the consistent recurrence of this unbalanced pattern.  For example, he analyzed all the Philadelphia marriage licenses granted in 1931 in a 20-block area, demonstrating that 70 percent of the marriages occurred between people who lived within 30 percent of the distance.

Incidentally, Zipf also provided a scientific justification for the messy desk by justifying clutter with another law: frequency of use draws near to us things that are frequently used.  Intelligent secretaries have long known that files in frequent use should not be filed!

1951: Juran''s Rule of the Vital Few and the rise of Japan

The other pioneer of the 80/20 Principle was the great quality guru, Romanian-born U.S. engineer Joseph Moses Juran (born 1904), the man behind the Quality Revolution of 1950-90.  He made what he alternately called the "Pareto Principle" and the "Rule of the Vital Few" virtually synonymous with the search for high product quality.

In 1924, Juran joined Western Electric, the manufacturing division of Bell Telephone System, starting as a corporate industrial engineer and later setting up as one of the world''s first quality consultants.

His great idea was to use the 80/20 Principle, together with other statistical methods, to root out quality faults and improve the reliability and value of industrial and consumer goods.  Juran''s path-breaking Quality Control Handbook was first published in 1951 and extolled the 80/20 Principle in very broad terms: The economist Pareto found that wealth was nonuniformly distributed in the same way [as Juran''s observations about quality losses].  Many other instances can be found--the distribution of crime amongst criminals, the distribution of accidents among hazardous processes, etc.  Pareto''s principle of unequal distribution applied to distribution of wealth and to distribution of quality losses.

No major U.S. industrialist was interested in Juran''s theories.  In 1953 he was invited to Japan to lecture, and met a receptive audience.  He stayed on to work with several Japanese corporations, transforming the value and quality of their consumer goods.  It was only once the Japanese threat to U.S. industry had become apparent, after 1970, that Juran was taken seriously in the West.  He moved back to do for U.S. industry what he had done for the Japanese.  The 80/20 Principle was at the heart of this global quality revolution.  

From the 1960s to the 1990s: progress from using the 80/20 Principle

IBM was one of the earliest and most successful corporations to spot and use the 80/20 Principle, which helps to explain why most computer systems specialists trained in the 1960s and 1970s are familiar with the idea.

In 1963, IBM discovered that about 80 percent of a computer''s time is spent executing about 20 percent of the operating code.  The company immediately rewrote its operating software to make the most-used 20 percent very accessible and user friendly, thus making IBM computers more efficient and faster than competitors'' machines for the majority of applications.

Those who developed the personal computer and its software in the next generation, such as Apple, Lotus, and Microsoft, applied the 80/20 Principle with even more gusto to make their machines cheaper and easier to use for a new generation of customers, including the now celebrated "dummies" who would previously have given computers a very wide berth.



Winner take all

A century after Pareto, the implications of the 80/20 Principle have surfaced in a recent controversy over the astronomic and ever-rising incomes going to superstars and those very few people at the top of a growing number of professions.  Film director Steven Spielberg earned $165 million in 1994.  Joseph Jamial, the most highly paid trial lawyer, was paid $90 million.  Merely competent film directors or lawyers, of course, earn a tiny fraction of these sums.

The twentieth century has seen massive efforts to level incomes, but inequality, removed in one sphere, keeps popping up in another.  In the United States from 1973 to 1995, average real incomes rose by 36 percent, yet the comparable figure for nonsupervisory workers fell by 14 percent.  During the 1980s, all of the gains went to the top 20 percent of earners, and a mind-boggling 64 percent of the total increase went to the top 1 percent!  The ownership of shares in the United States is also heavily concentrated within a small minority of households: 5 percent of U.S. households own about 75 percent of the household sector''s equity.  A similar effect may be seen in the role of the dollar: almost 50 percent of world trade is invoiced in dollars, far above America''s 13 percent share of world exports.  And, while the dollar''s share of foreign exchange reserves is 64 percent, the ratio of American GDP to global output is just over 20 percent.  The 80/20 Principle will always reassert itself, unless conscious, consistent, and massive efforts are made and sustained to overcome it.

Why the 80/20 Principle is so Important

The reason that the 80/20 Principle is so valuable is that it is counter-intuitive.  We tend to expect that all causes will have roughly the same significance.  That all customers are equally valuable.  That every bit of business, every product, and every dollar of sales revenue is as good as any other.  That all employees in a particular category have roughly equivalent value.  That each day or week or year we spend has the same significance.  That all our friends have roughly equal value to us.  That all inquiries or phone calls should be treated in the same way.  That one university is as good as another.  That all problems have a large number of causes, so that it is not worth isolating a few key causes.  That all opportunities are of roughly equal value, so that we treat them all equally.

We tend to assume that 50 percent of causes or inputs will account for 50 percent of results or outputs.  There seems to be a natural, almost democratic, expectation that causes and results are generally equally balanced.  And, of course, sometimes they are.  But this "50/50 fallacy" is one of the most inaccurate and harmful, as well as the most deeply rooted, of our mental maps.  The 80/20 Principle asserts that when two sets of data, relating to causes and results, can be examined and analyzed, the most likely result is that there will be a pattern of imbalance.  The imbalance may be 65/35, 70/30, 75/25, 80/20, 95/5, or 99.9/0.1, or any set of numbers in between.  However, the two numbers in the comparison don''t have to add up to 100.

The 80/20 Principle also asserts that when we know the true relationship, we are likely to be surprised at how unbalanced it is.  Whatever the actual level of imbalance, it is likely to exceed our prior estimate.  Executives may suspect that some customers and some products are more profitable than others, but when the extent of the difference is proved, they are likely to be surprised and sometimes dumbfounded.  Teachers may know that the majority of their disciplinary troubles or most truancy arises from a minority of pupils, but if records are analyzed the extent of the imbalance will probably be larger than expected.  We may feel that some of our time is more valuable than the rest, but if we measure inputs and outputs the disparity can still stun us.

Why should you care about the 80/20 Principle?  Whether you realize it or not, the principle applies to your life, to your social world, and to the place where you work.  Understanding the 80/20 Principle gives you great insight into what is really happening in the world around you.

The overriding message of this book is that our daily lives can be greatly improved by using the 80/20 Principle.  Each individual can be more effective and happier.  Each profit-seeking corporation can become very much more profitable.  Each nonprofit organization can also deliver much more useful outputs.  Every government can ensure that its citizens benefit much more from its existence.  For everyone and every institution, it is possible to obtain much more that is of value and avoid what has negative value, with much less input of effort, expense, or investment.

At the heart of this progress is a process of substitution.  Resources that have weak effects in any particular use are not used, or are used sparingly.  Resources that have powerful effects are used as much as possible.  Every resource is ideally used where it has the greatest value.  Wherever possible, weak resources are developed so that they can mimic the behavior of the stronger resources.

Business and markets have used this process, to great effect, for hundreds of years.  The French economist J-B Say coined the word "entrepreneur" around 1800, saying that "the entrepreneur shifts economic resources out of an area of lower productivity into an area of higher productivity and yield."  But one fascinating implication of the 80/20 Principle is how far businesses and markets still are from producing optimal solutions.  For example, the 80/20 Principle asserts that 20 percent of products, or customers or employees, are really responsible for about 80 percent of profits.  If this is true--and detailed investigations usually confirm that some such very unbalanced pattern exists--the state of affairs implied is very far from being efficient or optimal.  The implication is that 80 percent of products, or customers or employees, are only contributing 20 percent of profits; that there is great waste; that the most powerful resources of the company are being held back by a majority of much less effective resources; that profits could be multiplied if more of the best sort of products could be sold, employees hired, or customers attracted (or convinced to buy more from the firm).

In this kind of situation one might well ask: why continue to make the 80 percent of products that only generate 20 percent of profits?  Companies rarely ask these questions, perhaps because to answer them would mean very radical action: to stop doing four-fifths of what you are doing is not a trivial change.

What J-B Say called the work of entrepreneurs, modern financiers call arbitrage.  International financial markets are very quick to correct anomalies in valuation, for example between exchange rates.  But business organizations and individuals are generally very poor at this sort of entrepreneurship or arbitrage, at shifting resources from where they have weak results to where they have powerful results, or at cutting off low-value resources and buying more high-value resources.  Most of the time, we do not realize the extent to which some resources, but only a small minority, are superproductive--what Joseph Juran called the "vital few"--while the majority--the "trivial many"--exhibit little productivity or else actually have negative value.  If we did realize the difference between the vital few and the trivial many in all aspects of our lives and if we did something about it, we could multiply anything that we valued.



The 80/20 Principle and Chaos Theory

Probability theory tells us that it is virtually impossible for all the applications of the 80/20 Principle to occur randomly, as a freak of chance.  We can only explain the principle by positing some deeper meaning or cause that lurks behind it.

Pareto himself grappled with this issue, trying to apply a consistent methodology to the study of society.  He searched for "theories that picture facts of experience and observation," for regular patterns, social laws, or "uniformities" that explain the behavior of individuals and society.

Pareto''s sociology failed to find a persuasive key.  He died long before the emergence of chaos theory, which has great parallels with the 80/20 Principle and helps to explain it.

The last third of the twentieth century has seen a revolution in the way that scientists think about the universe, overturning the prevailing wisdom of the past 350 years.  That prevailing wisdom was a machine-based and rational view, which itself was a great advance on the mystical and random view of the world held in the Middle Ages.  The machine-based view converted God from being an irrational and unpredictable force into a more user-friendly clockmaker-engineer.

The view of the world held from the seventeenth century and still prevalent today, except in advanced scientific circles, was immensely comforting and useful.  All phenomena were reduced to regular, predictable, linear relationships.  For example, a causes b, b causes c, and a+c cause d. This worldview enabled any individual part of the universe--the operation of the human heart, for example, or of any individual market--to be analyzed separately, because the whole was the sum of the parts and vice versa.

But in the second half of the twentieth century it seems much more accurate to view the world as an evolving organism where the whole system is more than the sum of its parts, and where relationships between the parts are nonlinear.  Causes are difficult to pin down, there are complex interdependencies between causes, and causes and effects are blurred.  The snag with linear thinking is that it doesn''t always work, it is an oversimplification of reality.  Equilibrium is illusory or fleeting.  The universe is wonky.

Yet chaos theory, despite its name, does not say that everything is a hopeless and incomprehensible mess.  Rather, there is a self-organizing logic lurking behind the disorder, a predictable nonlinearity--something which economist Paul Krugman has called "spooky," "eerie," and "terrifyingly exact."  The logic is more difficult to describe than to detect and is not totally dissimilar to the recurrence of a theme in a piece of music.  Certain characteristic patterns recur, but with infinite and unpredictable variety.

Why the 80/20 Principle Brings Good News

I want to end this introduction on a personal rather than a procedural note.  I believe that the 80/20 Principle is enormously hopeful.  Certainly, the principle brings home what may be evident anyway: that there is a tragic amount of waste everywhere, in the way that nature operates, in business, in society, and in our own lives.  If the typical pattern is for 80 percent of results to come from 20 percent of inputs, it is necessarily typical too that 80 percent, the great majority, of inputs are having only a marginal--20 percent--impact.

The paradox is that such waste can be wonderful news, if we can use the 80/20 Principle creatively, not just to identify and castigate low productivity but to do something positive about it.  There is enormous scope for improvement, by rearranging and redirecting both nature and our own lives.  Improving on nature, refusing to accept the status quo, is the route of all progress: evolutionary, scientific, social, and personal.  George Bernard Shaw put it well: "The reasonable man adapts himself to the world.  The unreasonable one persists in trying to adapt the world to himself.  Therefore all progress depends on the unreasonable man."

The implication of the 80/20 Principle is that output can be not just increased but multiplied, if we can make the low-productivity inputs nearly as productive as the high-productivity inputs.  Successful experiments with the 80/20 Principle in the business arena suggest that, with creativity and determination, this leap in value can usually be made.

There are two routes to achieving this.  One is to reallocate the resources from unproductive to productive uses, the secret of all entrepreneurs down the ages.  Find a round hole for a round peg, a square hole for a square peg, and a perfect fit for any shape in between.  Experience suggests that every resource has its ideal arena, where the resource can be tens or hundreds of times more effective than in most other arenas.

The other route to progress--the method of scientists, doctors, preachers, computer systems designers, educationalists, and trainers--is to find ways to make the unproductive resources more effective, even in their existing applications; to make the weak resources behave as though they were their more productive cousins; to mimic, if necessary by intricate rote-learning procedures, the highly productive resources.

The few things that work fantastically well should be identified, cultivated, nurtured, and multiplied.  At the same time, the waste--the majority of things that will always prove to be of low value to man and beast--should be abandoned or severely cut back.

As I have been writing this book and observed thousands of examples of the 80/20 Principle, I have had my faith reinforced: faith in progress, in great leaps forward, and in mankind''s ability, individually and collectively, to improve the hand that nature has dealt.  Joseph Ford comments: "God plays dice with the universe.  But they''re loaded dice.  And the main objective is to find out by what rules they were loaded and how we can use them for our own ends."

The 80/20 Principle can help us achieve precisely that.

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4.5 out of 54.5 out of 5
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Top reviews from the United States

BP
3.0 out of 5 starsVerified Purchase
Extraordinarily redundant
Reviewed in the United States on April 18, 2018
The author explains that he was surprised there was a lot of articles about the 80/20 principle but no book on the subject... You bet, who would write a 250 pages book on something that could be explained in 3 minutes? The 80/20 principle itself is amazing indeed, but... See more
The author explains that he was surprised there was a lot of articles about the 80/20 principle but no book on the subject... You bet, who would write a 250 pages book on something that could be explained in 3 minutes?
The 80/20 principle itself is amazing indeed, but 95% of the points of this book come from 5% of its words. The same SINGLE idea is explained in 20 different contexts each repeated 20 times.
Just read an article or introduction about the 80/20 principle and that''s all you need to know really.
146 people found this helpful
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Perry Marshall
5.0 out of 5 starsVerified Purchase
THE most pivotal book I''ve read in my business career
Reviewed in the United States on June 16, 2016
Some people have cynically commented that you only need to read 20% of this book, and the rest is all repetition. Those people do not actually understand the fractal nature of the 80/20 principle - how pervasive it is, or the extent to which you really need to... See more
Some people have cynically commented that you only need to read 20% of this book, and the rest is all repetition.

Those people do not actually understand the fractal nature of the 80/20 principle - how pervasive it is, or the extent to which you really need to immerse yourself in these concepts. Their opinions are worthless.

I first read this book in 2003. I got to page 14 and Richard was explaining how 80/20 is closely related to chaos theory. I suddenly had an epiphany - making realizations that weren''t even explicitly stated - and realized that inside every 80/20 is another 80/20, and another and another. 80/20 is fractal!

Suddenly I looked out the window and saw 80/20 EVERYWHERE - in the trees, in the street, in the carpet in my house, in nearly every column of every spreadsheet in my business. Before I''d barely seen it at all, and even then only in the rear view mirror. After, I saw it everywhere all around me.

At the time I was just starting to crack the code on Google AdWords, and I realized 80/20 is the key to pretty much everything in AdWords. And in marketing itself. 80/20 became my secret weapon. It was the backbone of AdWords and I included an 80/20 chapter in my very first ebook, "Definitive Guide to Google AdWords" which eventually became Entrepreneur Press''s "Ultimate Guide to Google AdWords" which is the world''s #1 book on internet advertising. It also inspired my book "80/20 Sales and Marketing."

Richard makes a key observation, which is the difference between 80/20 ANALYSIS and 80/20 THINKING. Analysis is backward-looking. 80/20 Thinking is forward looking. When you know, in advance, that whatever you do is going to be 80/20 and nothing you do can change that, you artificially stack the deck to favor early successes. You kill your runts faster. You search for patterns that most people miss, and shortcut months or years of failure.

Richard also delves into many subtleties of how 80/20 manifests in business, and how most businesses are losing money every time they sell 20% of their product line. This is a very big deal.

I''m now reading this book, 13 years later, AGAIN (not sure how many times I''ve cracked it) and it''s still producing new jewels. Yes, you can read 20% of this book and it could still potentially change your life. But if you understand 80/20, you should read that kind of book 5 times and you can be nearly certain that you''ll get 10X your time investment back every single time.

When Richard starts getting philosophical near the end about this applying to relationships and whatnot, don''t give in to the temptation to think he''s over-reaching. He''s not. 80/20 is a fundamental axiom of cause and effect, one of the great secret laws of the universe.

I''ve read a LOT of great books but this one tops the list. It''s been worth many millions of dollars to me in my career.
138 people found this helpful
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Jake
3.0 out of 5 starsVerified Purchase
At least it proves it''s principle
Reviewed in the United States on May 25, 2018
Save 80% of your time by reading the title and nothing else. Input to output ratio is nonlinear in most circumstances. There is little value offered by reading this book if you accept the premise of the title.
48 people found this helpful
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Bonnie Hoke-Scedrov
5.0 out of 5 starsVerified Purchase
One of the best books I’ve ever read
Reviewed in the United States on August 4, 2018
This is the essential “go–to” book for our time–scarce, success–driven world. The 80/20 principle of Vilfredo Pareto is actually an old idea that is has become much in vogue recently with books published like “The Four Hour Workweek”. The idea is that efficiency—and... See more
This is the essential “go–to” book for our time–scarce, success–driven world. The 80/20 principle of Vilfredo Pareto is actually an old idea that is has become much in vogue recently with books published like “The Four Hour Workweek”. The idea is that efficiency—and success—in all areas of life can be boiled down to that essential 20% of “inputs” that makes the remaining 80% of “inputs” (people we associate with; stuff we sell; projects we do; anything that takes our time, effort or money) obsolete. Koch makes the case (rather exhaustively!) that the 80/20 principle can be applied to any area of one’s life or endeavors and that it inevitably improves things—often dramatically.

The structure of the book is not ideal and can lead to cumbersome reading. The first half is an absolutely thorough (maybe too thorough?) analysis of every conceivable manifestation of 80/20 possible in one’s life. It’s a little too driven and one-dimensional, though I accept that the author believes it to be essential information to fully comprehending the subject matter. At the 50% juncture of the book, he kind of runs out of gas having exhausted every avenue of analysis and has to lard the rest of the book with other ideas, which, though interesting, are not enough to justify that much more copy. So, why still the 5-star review? In the second part of the book are several gems of knowledge so valuable that it justifies slogging through to the end. One such idea that blew my mind: the 40-Hour Workweek, 5 days a week, 40 year “typical” job that most people have nowadays has only existed for less than 200 years—a drop in the bucket in human history! (It is a byproduct of the factory schedule originating from the industrial revolution.) So, there is no reason people should assume that is the only option for employment or that such jobs will even continue to exist beyond the 200-year mark! We had all better be finding ways to succeed more with less…

Buy this book, read it ALL, and start following its principles.
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Glenna Rohlfing
5.0 out of 5 starsVerified Purchase
The true "20 percent" of the book
Reviewed in the United States on March 6, 2019
The long-standing application of 80/20 thinking in business, economics and quality management is well known as admitted early on in Richard Koch’s "the 80/20 Principle." As such, I found the first half of the book more of a refresher on the principles of the “vital few”... See more
The long-standing application of 80/20 thinking in business, economics and quality management is well known as admitted early on in Richard Koch’s "the 80/20 Principle." As such, I found the first half of the book more of a refresher on the principles of the “vital few” (or the “meaningless many”). Perhaps this is why it took me a while to slog through it, as there was little to entice me to the next page. The genius of the book came in the back half, where the author applies 80/20 thinking to a greater, nobler realm, personal freedom and happiness. Perhaps it takes getting on into middle life to actually see and appreciate the connection. Life is finite and the end ever approaching and thus prioritizing what can be experienced and achieved becomes ever more important to us. Why waste a few months on a garbage novel when you haven’t read Tolstoy yet? Thus, 80/20 thinking provides an ideal approach to sorting out what is least important to us and wastes our most valuable asset, time, and forces us to start visiting the “happiness islands” that really matter.

A number of the reader insights included at the end of the 2008 edition take issue with Richard Koch and his attempt to over-extend the use of the 80/20 principle. But if imbalance is taken for granted in the business world, why would it not be so in our greater lives? In the end, this over-extension becomes the true “20 percent” of the book, and one which will happily allow me to place "the 80/20 Principle" next to the other greats in my leadership library, including Covey’s “7 Habits” and Drucker’s “Effective Executive.”
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Jeffrey Tarter
4.0 out of 5 starsVerified Purchase
High-impact priorities
Reviewed in the United States on September 19, 2016
Richard Koch points out that he''s apparently the first author to write a full-length book on the 80/20 principle. That''s an astonishing gap in management education, and I''ve seen the consequences many times over in companies that are unable to define high-impact priorities... See more
Richard Koch points out that he''s apparently the first author to write a full-length book on the 80/20 principle. That''s an astonishing gap in management education, and I''ve seen the consequences many times over in companies that are unable to define high-impact priorities at virtually all levels. Koch does a superb job of explaining 80/20 management, and I''d recommend--or rather *strongly* recommend--that everyone who wants their organization to prosper should buy and distribute a few caseloads of this book.

Koch is somewhat less successful at extending the 80/20 principle beyond the business world. He''s absolutely correct that it''s a useful tool for setting personal priorities... but Koch really needs to be more helpful about how to make this happen. His present approach, even with the updating in this new edition, arguably takes away from the strong focus in the first half of the book.
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smf
5.0 out of 5 starsVerified Purchase
Something you may or may not realize you already do
Reviewed in the United States on January 18, 2012
I discovered this book via Tim Ferriss and enjoyed it thoroughly. There were early parts of the book that were a little dry, with graphs and charts... all necessary components of the book, but dry nonetheless. However, I soon realized I''ve always spent my time adopting the... See more
I discovered this book via Tim Ferriss and enjoyed it thoroughly. There were early parts of the book that were a little dry, with graphs and charts... all necessary components of the book, but dry nonetheless. However, I soon realized I''ve always spent my time adopting the 80/20 principle in some form during my life, this book just helped me justify why I do what I do. I enjoyed the reinforcement and opportunity to make clearer decisions.

One of the most important aspects of the 80/20 principle for me is choosing specific people as friends, and eliminating those in my life who do not contribute happiness, support my dreams, or provide a loving partnership. This book helps you identify those around you who will serve you, who you may serve more effectively, and how to avoid allowing people to take advantage of you, etc. Following the suggestions in the book will only strengthen your relationships as well as your self-confidence.

This theme is repeated throughout the book in multiple examples. The author lays out all the guidelines, but it''s up to you to use them for true effectiveness.

I highly recommend this book to those who want to have more success in their business and personal life.
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Scott Dinsmore
5.0 out of 5 starsVerified Purchase
Ground-breaking tools for adding hours to your days and happiness to your life.
Reviewed in the United States on March 31, 2010
Why You Should Read It: The principles in this book can literally add hours to your days and compound your happiness. It''s worth a look. What''s more important than having time? Average Read Time: 4.5 Minutes We''ve all surely heard of the 80/20... See more
Why You Should Read It: The principles in this book can literally add hours to your days and compound your happiness. It''s worth a look. What''s more important than having time?

Average Read Time: 4.5 Minutes

We''ve all surely heard of the 80/20 Principle, or Pareto''s Law as it''s more formally known. It goes something like this:

80% of the results come from 20% of the effort.
It''s often thrown around in business as nothing more than a buzzword. Few actually do a full 80/20 analysis of their business and almost no one I''ve come across has applied the same to their life as a whole. Other than two people that is: Richard Kock and Tim Ferriss-and the people who have since followed in their footsteps (me included). The 80/20 Principle is the source material for what Tim wrote in The 4-Hour Work Week. It took me reading it a couple times to grasp the simplicity and life-altering implications of the principle. The time saved and gained will blow your mind.

The amazing thing is that the studies in this book show the principle working in just about every possible scenario. Of course it''s not always 80/20. Sometimes 90/10 or 95/5 or even 70/30. But the point is it works-without fail.

Richard''s purpose was to explain this ancient principle in a way that would inspire action and application to every part of life. When applied to work, productivity will go through the roof, but when applied to your life outside of work, happiness and fulfillment do just the same. All it takes is a shift in thinking. Try the following for a few weeks and the time in your life will never be the same.

5 ways to apply the 80/20 Principle to enhance your life:

1. Do the 20% of your work that leads to 80% of your results: Track all the time you spend on projects each hour of each day for a week. How many of these things were necessary? How many got you closer to your goals? How many were a waste of time? How many could someone else have done? Pick the 20% of your tasks that yield 80% of the results and outsource or simply discontinue the rest. Wondering what to do with your remaining time? Enjoy life. I outsourced a significant portion of my work to two very reliable virtual assistants in India starting in 2006. Ravi and Vikash now do that 70 or 80% for me. At $3-5/hour it is very hard to beat. Check out [...] if you''re looking to out source. Search "Virtual Assistant". Once you start outsourcing, you''ll never go back.

2. Locate the 20% of your customers who drive 80% of your profits: Find your top 20% customers (by profit, not revenue) and fire the rest. Yes, fire them. The goal is not to work your life away. It is to make a good living to enjoy your life. If you must work more, then list out the characteristics of your 20% customers and go out and find more of them. You will not believe how liberating it can be to fire a customer who''s been a real pain in the ass.

3. Prioritize the 20% of your friends who provide 80% of your support and enjoyment: If you apply 80/20 to your relationships you will surely find that a few people in your life provide the majority of your support, excitement, laughter and feelings of connection. On the other side, there is likely another 20% group of people who account for most your sleepless nights, tears, anger and frustration. If you don''t want to feel this way, stop spending time around your bottom 20. Fire them and work on duplicating your top 20. This may sound a little calous, but it''s not. It''s practical. The quality of our life comes down to the quality of the people and experiences that fill it.

4. Fill your life with the 20% of your experiences that provide 80% of your happiness: As humans, our two biggest priorities are to move towards pleasure and away from pain. As mentioned above, find the few people, things, places and experiences that provide 80% of your happiness, fulfillment, pleasure and excitement. Also find the things that cause you to feel the majority of your negative emotions. Focus your time on the top 20% and avoid the bottom 20% like the plague.

5. Do the 20% of your workouts that lead to 80% of your physical gains: The majority of fitness results come from a small portion of most workouts. 80% of the muscle is built in the last 20% of the reps. Crossfit is a great example. The workouts are 7-14 minutes long on average but they provide more physical benefit than most hour-long workouts. Spending more time on something is not always a good thing. If you believe your workouts must take an hour then you''ll likely miss a lot more of them. What if they only took 7 minutes, but that seven minutes really tested your limits? You''re likely to show up a lot more often.

I know this sounds simple. But few people stop to actually do it. It is truly possible to spend the majority of your time doing the things that you love. The only way to get there is taking Pareto''s 80/20 principle seriously. It will make all the difference.

Do not let more than 3 months go by without performing a full 80/20 breakdown of all areas of your life (especially your personal life). It will only take a couple hours and those hours will likely save days before you know it... 80/20 in action yet again.

Somewhere along the path of life, most of us were taught to associate fulfillment and worth with the number of hours spent-thinking the more the better. This has lead many of us to working aimlessly just to say we filled the day. This IS NOT the goal. The goal is be fulfilled, happy, efficient, effective and more than anything else, to enjoy life. Happiness is a daily right. It is not something we need to work our ass off for years to finally achieve. That is what Pareto stumbled on all these years ago. I encourage you to do the same.
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Top reviews from other countries

Dipanshu Rawal
4.0 out of 5 starsVerified Purchase
Informative read!
Reviewed in India on September 12, 2018
Book Summary in 🤚 points. Book #16: The 80/20 Principle by Richard Koch 1. 80/20? The minority, 20% of causes, inputs, or effort usually leads to a majority, 80% of the results. 2. 20% of choices. The ones that have a massive impact. Eg. You probably can recall a few...See more
Book Summary in 🤚 points. Book #16: The 80/20 Principle by Richard Koch 1. 80/20? The minority, 20% of causes, inputs, or effort usually leads to a majority, 80% of the results. 2. 20% of choices. The ones that have a massive impact. Eg. You probably can recall a few critical turning points in your life that brought you to your current self. 3. 20% of efforts. Find the critical efforts that lead to the majority of results. Eg. Many ventures often times rely on a few key missions to succeed. 4. Conduct an 80/20 analysis. Find out what you can optimise. To maximise your effectiveness, focus only on what matters most. 5. So, what you can do about it? “Eliminate or reduce the 80% of efforts that produce poor results, there are many ways to waste your time and resources.” Bonus point- 20% of People cause 80% of problems in our lives. And, 20% of people are the reason for 80% of our happiness.
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SAINATH REDDY
4.0 out of 5 starsVerified Purchase
A good book for business people.
Reviewed in India on March 10, 2019
It gives complete applicative analysis about 80/20 principle in business and personal life. The Pareto principle from the mid 20th century applied mainly in business hence it is not new in business but this book tells us how to think and act 80/20 in every aspect of life....See more
It gives complete applicative analysis about 80/20 principle in business and personal life. The Pareto principle from the mid 20th century applied mainly in business hence it is not new in business but this book tells us how to think and act 80/20 in every aspect of life. The vital few i.e 20% of aspects gives 80% of results. Identify those 20% in business or personal life and increase your allocation of time and effort on those vital few by eliminating less important things. It took me lot of effort to read and understand part one that is entirely of business applications of Pareto law in sales,inventory ,negotiation, focussing on few and right customers. What I like the most about Richard Koch and this book is after every chapter he tells about upcoming chapter and to skip the chapter based on purpose of your reading. If you are a business person or going to start one then you should read everything but if you doesn''t belong, then you should definitely skip part one entirely to save some time and have peace of mind. Although it has it''s drawback Not all things or actions or products which are not importantor doesn''t add any value can be avoided or eliminated
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Bharat
1.0 out of 5 starsVerified Purchase
Waste of money
Reviewed in India on September 2, 2020
The Real information is only in 4-5pages other is just Repeatation of same again and again in whole book. No need to buy this book just search on YouTube see one video on this topic.. That''s enough
7 people found this helpful
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Ranjan
2.0 out of 5 starsVerified Purchase
Bad Quality Product
Reviewed in India on January 18, 2018
Giving two stars because of the quality of the book not for the content. Received today, as I turned the pages I found the page quality is very very chip not aspected from amazon fulfiled product.
9 people found this helpful
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Kian
2.0 out of 5 starsVerified Purchase
The book repeats the main concept over and over
Reviewed in Canada on July 12, 2020
The main message of the books is that 80 percent of the results are caused by only 20 percent of the causes/efforts. The book is just repeating this idea over and over. I think 100 of what you get from this book is from only 2 percent (~ 5 pages) of the book. The rest is...See more
The main message of the books is that 80 percent of the results are caused by only 20 percent of the causes/efforts. The book is just repeating this idea over and over. I think 100 of what you get from this book is from only 2 percent (~ 5 pages) of the book. The rest is the repetition of the same concept which is poorly paraphrased.
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