The 80/20 Principle Book (Richard Koch, 1997)

In a nutshell

• 80% output is from 20% input
• 80% consequences is from 20% causes
• 80% results is from 20% effort
• 1% product → 20% of profit
• 20% profits → 80% of profit
• Don't apply 80/20 analysis in a linear way.
• 80% of the growth, profitability and satisfaction comes from 20% of the clients.

Main tenets

1. There are only a few things that ever produce important results.
2. Most efforts do not realise their intended results.
3. There are subterranean forces at work.
4. All you need to know is whether something is working or not and change the mix until it is.
5. Most good events happen because of a small minority of highly productive forces
6. Most activities will not contribute materially to desired results.

Rules for decision taking with 80/20 principle

1. Not many decisions are very important.
2. The most important decisions are often those made only by default.
3. Gather 80% of the data and perform 80% of the relevant analyses in the first 20% of the time available.
4. If what you have decided is not working, change it early.
5. When something is working well, double and redouble your bet.

Some hypothesis

1. Most of what we do is of low value.
2. Some small fragments of our time are much more valuable than all the rest.
3. If we can do anything about this, we should do something radical: there is no point tinkering around the edges or making our use of time a little more efficient.
4. If we make good use of only 20% of our time, there is no shortage of it!

Low-value uses of time

1. Things other people want you to do.
2. Things that have always been done this way.
3. Things you're not unusually good at doing.
4. Things you don't enjoy doing.
5. Things that are always interrupted.
6. Things few other people are interested in.
7. Things that have already taken twice as long as you originally expected.
8. Things where your collaborators are unreliable or low quality.
9. Things that have a predictable cycle.
10. Answering the telephone.

Highest-value uses of time

1. Things that advance your overall purpose in life.
2. Things you have always wanted to do.
3. Things already in the 20/80 relationship of time to results.
4. Innovative ways of doing things that promise to slash the time required and/or multiple the quality of results.
5. Things other people tell you can't be done.
6. Things other people have done successfully in a different arena.
7. Things that use your own creativity.
8. Things that you can get other people to do for you with relatively little effort on your part.
9. Anything with high-quality collaborators who have already transcended the 80/20 rule of time, who use time eccentrically and effectively.
10. Things for which it is now or never.

Types of officer

1. Lazy and stupid: no harm.
2. Hard-working and intelligent: excellent staff officer.
3. Hard-working and stupid: menace and be fired.
4. Lazy and intelligent: suited for highest office.

A successful career

1. Specialise in a very small niche; develop a core skill.
2. Choose a niche that you enjoy, where you can excel and stand a chance of becoming an acknowledged leader.
3. Realise that knowledge is power.
4. Identify your market and your core customers and serve them best.
5. Identify where 20% of effort gives 80% of returns.
6. Learn from the best.
7. Become self-employed early in your career.
8. Employ as many net value creators as possible.
9. Use outside contractors for everything but your core skill.
10. Exploit capital leverage.

7 daily happiness habits

1. Exercise
2. Mental stimulation
3. Spiritual/artistics stimulation/meditation
4. Doing a good turn
5. Taking a pleasure break with a friend
6. Giving yourself a treat
7. Congratulating yourself

7 short cuts to a happy life

1. Maximise your control
2. Set attainable goals
3. Be flexible
4. Have a close relationship with your partner
5. Have a few happy friends
6. Have a few close professional alliances
7. Evolve your ideal lifestyle

3 cardinal uses of subconscious

1. Creative solutions
2. Attaining personal goals
3. Serenity