The 80/20 Principle: The Secret to Achieving More with Less Paperback – October 19, 1999

This book does an excellent job explaining the importance of focusing on what gets the most results in any outcome driven system. From the initial work of Pareto we see that in most things 20% of actions lead to 80% of results. The percentages can be more like 5/95 or 10/90 in some things but the key to the principle is to discover where the majority of results come from. This a great book that really gets the reader's mind focused on filtering what matters and what does not matter in any life situation whether business, sports, relationships, health, or your personal life. This is a key principle that has lead many people to success whether they knew they were using it or not. What really matters? What actions make all the difference? This book explains how to put the principles in action. How do you develop a good filter to know what matters and what doesn't.

The greatest challenge people face today is the tsunami of data, information, options, media, etc. on and off the Internet. A giant wave of trivia submerges truly important things like family time, thinking time, selective study time, and time for creating something uniquely of value for the world with the energy, talents and skills we have been given.

It would be mistake to brush off the 80/20 Principle as just another book and the principle just another strategy, method or principle. Given the challenges we all face I would classify it as an essential survival manual (for business or the individual) in an increasingly complex twenty first century.

This isn't a book to place on your shelf or to just casually read. It's a book and principle to study, review and internalize until it becomes a part of automatic thinking and action.

If you don't have or run a business you can ignore the business portions. You'll still get value from the rest.

This book was amazing. I found the principles taught in this book to be not only simple but easy to apply. In fact, the 80/20 rule was already happening in my business and this book has helped me to understand better where to put more focus. Not everyone will agree with applying the 80/20 principle to their lives or business but I promise you this book will open up your eyes to trends and patterns like never before. This is a book that you will read numerous times and I would recommend as a Top 10 business book.

SmarterComics, a prominent innovator known for turning classic and pertinent books into graphic novels (comic books), has outdone itself with Richard Koch's 80/20 Principle. Essentially, SmarterComics strips away the dense aspect of the book and delivers a comic-book version that is not only entertaining, but profusely educational. The essence of the book is intact, while the fluff has been excised. For those unfamiliar with the 80/20 Principle, it is an intriguing book that is designed to improve effectiveness and personal satisfaction. While the original catered largely to business professionals, the comic book medium opens up the doors to a unique and limitless number of visual readers. The 80/20 Principle focuses on alleviating the stresses of daily life and primarily states that, "a minority of causes, inputs, or efforts usually leads to a majority of results, outputs, or rewards." Whether one is a visual reader or simply doesn't have the time necessary to fully understand Richard Koch's original version, the 80/20 Principle from SmarterComics is a highly recommended, valuable asset for all.

I absolutely love this book! So much great information. It has been very pivotal in helping me get my priorities straight in both my personal and professional life. Well done Richard!

The book I read this week was The 80/20 Principle by Richard Koch. What a wonderful book on results-based living. The 80/20 Principle is about inputs and outputs, an imbalance in the world. 80% of the results, outputs, or rewards come from 20% of activity, inputs, or effort. For instance, 80% of accidents on the road are caused by 20% of the drivers, 80% of wealth is held by 20% of people, and 20% of the work you do results in 80% rewards. This principle is used in business... many know it as the Pareto Law... The law of the trivial many and the vital few. The most important take-away is that there is an imbalance in the world... Things are not 50/50. I will help you apply this principle in 3 areas of your life: Business, Investing, and Happiness.

Business

Many consultants will use this principle when working with a firm and it results in enormous lasting effects. Koch was a consultant for Boston Consulting Group early in his career and I am sure he used his 80/20 principles many times in the course of business. How does it effect business? Many ways, but my favorite is that 80% of sales come from 20% of a company's products or clients. This also means that 80% of a company's products or clients only result in a small 20% of sales. So... Focus on the 20% of your products that give you 80%... If you are working with clients, build those relationships up and build on them. Big time clients have relationships with other business' and people like them, so exploit this information and build your sales portfolio with similar clients. If you are in retail, find the 20% of your products that result in 80% of sales and make them more visible. Put them in front of the customer. Too often do I find myself in a store and see a "hot" item tucked away in the back. Why? Most likely a mistake. Use this information to your advantage. Talk to the managers and make your business better. This will surely get you noticed and put you on the fast track to success.

There are many applications within the business world to utilize the 80/20 Principle... just think about your inputs and outputs or effort and results and think about how you can implement a more successful way of doing things. Generally, it comes from simplifying an existing idea. Great examples of this come from Wal-mart, IKEA,and Gas Stations. They have taken an employee out of an operation and it has resulted in increased sales and a simpler operation. In what context? Wal-mart has made it so customers can check themselves out, IKEA lets people build their own furniture, and Gas Stations everywhere let people pump there own gas. This allows the respective business' to take the cost of an employee, the person that once did those services, out of their prices and gives them a huge competitive advantage. In what area could your business trim a service down to save some money? Be different and think simple... it works!

Investing

It should be clear to most people that there is an imbalance on Wall Street. Some investments go up while others go down and in dramatic ways. This is why many people encourage having balanced portfolios (like me), however, Koch disagrees with this logic with good reason. Because there is an imbalance you are much more likely to make huge returns if you are heavily invested in one investment, about 80% invested. My thoughts on this is that when you throw all your eggs in one investment you do have a chance at great rewards, but you are heavily increasing your risk. Koch's investment strategy could work for you if you have a lot of knowledge and information of the investment you are putting yourself into. For example, you could invest in the company you work for because you know about the operations and you know whether it is getting better or worse. I encourage everyone to find the investment strategy that fits their personality best and if this one is for you, go for it!

Happiness

I am a huge advocate of always striving to increase levels of happiness in life. This book declares that 80% of our happiness comes from 20% of what we do. So we should simply analyze what falls within this 20% and do more of it and less of the 80% that only slightly increases our happiness levels. So if going on vacation with your family is in your 20% than arrange your life to do it more. And on the other side, if you have things in your life that you feel are pointless and result in low levels of happiness or unhappiness, then do them less or stop them all together. If its a social event or a meeting and you feel its pointless, you probably won't be missed if you stop attending and if its a chore, assign it to someone else. If this means getting a housekeeper, then do it. Happiness should take a very high priority in your life.

I also want to mention that the 80/20 Principle is not linear. Meaning that it does not have to add up to 100. 80% of a company's profits could be from 5% of products and on the same note 95% of your happiness could be a result of 30% of your activities. The idea behind the book is that there is an imbalance. Once you understand this concept you can start looking for it and use the information to become more efficient in every aspect of your life.

So there you have it. Applications for the 80/20 Principle. I have been asked by many people how I do everything I do: Read a book a week and write this, work on my career, analyze new investments and have a life. Well I guess I use some of the ideas outlined in this book and I didn't even know it. Additionally, I don't see anything I do in my life as "work": I love reading, I love writing this blog and teaching others how to be better, I love my career and the work I do, and I love learning about new investments and using that information to build my wealth. When I don't like doing something I find a way to do it differently so it's enjoyable or I ask someone else to take care of it for me. If you enjoy doing something there is a high probability that you are good at it. If you aren't good at something then giving that task to someone who is good at it, and following the same logic, that person will most likely enjoy it, this means it is the right decision. In fact, if you work on being smart about your delegation of tasks, you simultaneously turn yourself into a better leader.

There is a lot of great information in this book and I think anyone that reads it will improve their life greatly. I recommend it to everyone. If you have any questions on the book don't hesitate to ask. I would be more than happy to help anyone that wants it.

Great book! The 80/20 principle is a game changer. This book is a little wordy for non-analytical minds so if you prefer more colorful reading you may have to push through to grasp the idea. I still highly recommend it!