The principle is rather simple. Eighty percent of results come from 20% effort. For example, 80% of sales come from 20% of the products. Twenty percent of the roads carry 80% of the traffic. This also means that 80% of effort yields 20% of the results. According to Koch, we can do more to maximize the positive 20% and minimize the negative 80% of effort.
Koch covered the topic in 319 pages. He organized the 20 chapters across five parts:
- Overture
- Corporate success needn’t be a mystery
- Work less, earn and enjoy more
- The 80/20 future
- The principle revisited
The first section of The 80/20 Principle focused on explaining the 80/20 principle as well as the research history behind it. Other researchers such as Zipf and Juran also identified that certain efforts created an unbalanced result.
Koch pointed out that there is an imbalance to the world. Learning to identify and exploit the imbalance leads to rewards. Throughout the book, Koch provided countless examples of the 80/20 principle in action.
One of the most important sections of the book showed how to calculate and plot the 80/20 model for virtually any subject. Koch showed how to do it for beer drinkers.
Koch cautioned that it was not simply a matter of removing the 80% that was not generating positive results. One must analyze the entire catalog to best understand what is happening. The 80/20 principle is simply a tool to help with the analysis.
He used different case studies in the book to show how the 80/20 principle could be used to identify areas for improvement and deemphasis. Koch also provided strategies for maximizing results.
Simplifying is at the core of the 80/20 principle. The more complex your program is the more waste that you will have. Results will improve the more you simplify.
Koch also provided ten business examples showing how the 80/20 principle could be used. These examples included strategy, quality, service improvement, marketing, selling, information technology, decision making, inventory management, project management, and negotiations.
One of the key pieces of advice was to “Move 20 percent people (including yourself) away from 80 percent activities toward 20 percent activities” (Koch, 2017, p. 133).
The 80/20 principle does not only apply to work. It can also be used to maximize your free time. Eighty percent of our happiness comes from 20% of our time, activities, or relationships. The question is how we can do more of the 20 percent. Twenty percent of the people you hang out with provide you with 80% of the headaches whereas 20% of the people provide you with great joy. Choose carefully.
One of the more interesting discussions focused on the concept of time. Koch indicated that we should not manage our time in the traditional sense. Instead, we need to use our time to participate in the 20 percent activities that yield more positive results.
He also applied this way of thinking to the people you surround yourself with and to one’s relationship with money. These are definitely ideas that I need to explore further.
Now that I am more familiar with the 80/20 principle, I am viewing everything through that lens. I am already starting to see areas for improvement.
The 80/20 Principle was a very informative book. It is definitely a book that I will recommend to others. Those who own a business can certainly benefit from this book. With that said, I think everyone can gain something positive by looking at the world with an 80/20 lens.
Additional Reading
- Book Review: The 4-Hour Workweek
- Book Review: The ONE Thing – The Surprisingly Simple Truth Behind Extraordinary Results
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