The 80/20 Principle: The Secret of Achieving More with Less

by Richard Koch

The 80/20 principle asserts that a minority, a small number, of causes, inputs or effort usually leads to a majority of the results, outputs or rewards, so most of the outputs result from a very small part of the causes or inputs. The 80/20 principle, the key to success, The 80/20 principle, achieve more with less, The 80/20 principle, the key to success, The 80/20 principle, achieve more.

The 80/20 Principle asserts that a minority of causes, inputs or effort usually lead to a majority of the results, outputs or rewards.

The domino effect causing the big rock to move and create the possible ripples so to end the game.

Pareto’s discovery: systematic and predictable lack of balance

‘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 snag with linear thinking is that it doesn’t always work, it is an oversimplification of reality.

the principles of epidemic theory. The tipping point is ‘the point at which an ordinary and stable phenomenon – a low-level flu outbreak – can turn into a public-health crisis’,10 because of the number of people who are infected and can therefore infect others.

80 per cent of the results come from 20 per cent of the causes. A few things are important; most are not.

‘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.’

Conventional wisdom is not to put all your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into it, and then watch it like a hawk.

To engage in 80/20 Thinking, we must constantly ask ourselves: what is the 20 per cent that is leading to 80 per cent?

Our objective, as 80/20 thinkers, is to leave action behind, do some quiet thinking, mine a few small pieces of precious insight and then act: selectively, on a few objectives and a narrow front, decisively and impressively, to produce terrific results with as little energy and as few resources as possible.

Do not look for causes, especially not for causes of failure. Imagine, and then create, the circumstances that will make you both happy and productive.

Everyone can achieve something significant. The key is not effort, but finding the right thing to achieve. You are hugely more productive at some things than at others, but dilute the effectiveness of this by doing too many things where your comparative skill is nowhere near as great.

You can be a winner by choosing the right competition, the right team and the right methods to win. You are more likely to win by rigging the odds in your favour (legitimately and fairly) than by striving to improve your performance. You are more likely to win again where you have won before. You are more likely to win when you are selective about the races you enter.

80/20 thinkers know what generates their happiness and pursue it consciously, cheerfully and intelligently, using happiness today to build and multiply happiness tomorrow.

The key question is whether there is a major imbalance between the time spent on the one hand and achievement or happiness on the other. Does the most productive fifth of your time lead to four-fifths of valuable results? Are four-fifths of your happiest times concentrated into one-fifth of your life?

Productivity on most projects could be doubled simply by halving the amount of time for their completion.

hard work, especially for somebody else, is not an efficient way to achieve what we want. Hard work leads to low returns. Insight and doing what we ourselves want lead to high returns.

The 80/20 Principle shows time and time again that the 20 per cent who achieve the most either work for themselves or behave as if they do.

For happiness, identify your happiness islands: the small amounts of time, or the few years, that have contributed a quite disproportionate amount of your happiness. Take a clean sheet of paper, write ‘Happiness Islands’ at the top and list as many of them as you can remember. Then try to deduce what is common between all or some of the happiness islands.

Repeat the procedures for your unhappiness islands.

Repeat this whole procedure for achievement. Identify your achievement islands: the short periods when you have achieved a much higher ratio of value to time than during the rest of your week, month, year or life. Head a clean sheet of paper with ‘Achievement Islands’ and list as many as you can, if possible taken over the whole of your life.

A short-term objective, usually feasible, is to decide to take the 20 per cent of time spent on the high-value activities up to 40 per cent within a year.

The ideal position is to move the time spent on high-value activities up from 20 to 100 per cent. This may only be possible by changing career and lifestyle. If so, make a plan, with deadlines, for how you are going to make these changes.

Remember the advice above: be unconventional and eccentric in how you use your time. Do not follow the herd.

Whenever he felt even slightly ill, he would go to bed for at least a whole day, where he would read and think. His enormous political energy and effectiveness derived from his eccentric use of time.

You can only spend time on high-value activities (whether for achievement or enjoyment) if you have abandoned low-value activities. I invited you above to identify your low-value time sinks.

Once in your profession, if making money is really important to you and if you are any good at what you do, you should aim to become self-employed as soon as possible and, after that, to start to employ others.

what could you do better than 80 per cent but in only 20 per cent of the time?

The 80/20 Principle is clear. Pursue those few things where you are amazingly better than others and that you enjoy most.

if you have too much experience, too early, you exhaust your capacity for further deep relationships.

Something quite true and often tested to the utmost.

a small number of relationships will account for a large proportion of emotional value. Fill your relationship slots with extreme care and not too early!

Nothing is more important than your choice of alliances and how you build them. Without them you are nothing. With them, you can transform your life, often the lives of those around you and occasionally, in small or large ways, the course of history.

The best relationships are built on five attributes: mutual enjoyment of each other’s company, respect, shared experience, reciprocity and trust.

Bad relationships drive out good. There is a limited number of slots for relationships; don’t use up the slots too early or on low-quality relationships. Choose with care. Then build with commitment.

Risk, it is said, is minimized by having a broad spread of investments in a wide range of different media, such as bonds, stocks, cash, real estate, gold and collectibles.

But risk minimization is overrated. If you want to become rich enough to change your future lifestyle, you need to attain above-average returns. The chances of doing this are much higher if you adopt an unbalanced portfolio. This means that you should have few investments: those that you are convinced will give high returns. And it also means that you should invest in one medium …

The basic theory is very simple. Stock market performance is highly correlated with the growth of an economy as a whole. Therefore, invest in countries that have the fastest current and expected GNP growth – the emerging markets.

If any share falls by 15 per cent (of the price you paid), sell it. Follow this rule rigorously and consistently.

Making ourselves happy by strengthening emotional intelligence

Psychologists tell us that all perceptions about happiness relate to our sense of self-worth. A positive self-image is essential to happiness. A sense of self-worth can and should be cultivated. You know you can do it: give up guilt, forget about your weaknesses, focus and build on your strengths. Remember all the good things you have done, all the small and big achievements to your credit, all the positive feedback you have ever received.

If the best way to start being happy is to stop being unhappy, the first thing we should do is to avoid situations and people that tend to make us depressed or miserable.

Mind the Chanakaya's word

People who write down their goals and review them frequently are much more likely to attain them.