Many of you will have heard of the Pareto Principle which states that 80% of returns come from 20% of inputs. Richard Koch claims to have written the first book on this subject, although there have been numerous articles written about the Principle over the years.
The 80/20 principle was ‘discovered’ by Vilfredo Pareto (1848-1923) in 1897 and has been variously called the Pareto Principle, the 80/20 Principle and the Principle of Least Effort and the Principle of Imbalance.
Pareto discovered the principle when he was looking at patterns of wealth and income in nineteenth-century England and he found that most income was in the possession of a minority of the population in his samples. Not much surprise there, but he went on to discover two other facts that are detailed in the book, which helped him realise that the distribution of wealth across the population was ‘predictably unbalanced’. Pareto then discovered that this pattern of imbalance was repeated consistently whenever he looked at data referring to different time periods and different countries.
After more ‘research’ and innovative work in comparing two sets of data, his work was largely wasted at the time because he lacked the ability to explain it and the significance of the 80/20 Principle ‘lay dormant for generations’.
Koch has written a fascinating book on how the 80/20 Principle applies in all areas of life and he studies both work and personal life.
The author details the separation between 80/20 analysis and 80/20 thinking.
80/20 Analysis studies and relationship between two sets of comparable data; the purpose of these studies being to change the relationship it describes or make better use of it.
80/20 Thinking is the application of the 80/20 Principle to everyday life, in order to run a more efficient and profitable business/organisation and lead a more fulfilled life.
To quote from the book: ‘The 80/20 Principle applied to business has one key theme –to generate the most money with the least expenditure of assets and effort’. If you are in business and you read a sentence like that, you’ve just got to buy the book!
In Chapter 4, there is a section headed: ‘80/20 as a guide to the future – developing your firm into a different animal’. How challenging and exciting could that be?
Part Three is entitled ‘Work Less, Earn More and Enjoy More’ which sounds a bit like one of those folksy, New Age headings that promise you the earth without your making any effort. This book is far from that and challenges the received wisdom we have allowed to become part of our thinking habits.
Chapter 10 called ‘Time Revolution’ asserts that life is not as ‘short’ as it feels to most people because by concentrating on the elements of our lives that make the most difference to our results, whether they be our level of happiness, the amount of pleasure we experience, the quality of our relationships or the outputs from projects we undertake, we can achieve so much more; to quote from the book: ‘Most of any individual’s significant achievements – most of the value someone adds in personal, professional, intellectual, artistic, cultural or athletic terms – is achieved in a minority of their time’. How provocative is that? But true.
Chapter 15 is called ‘The Seven Habits of Happiness’ and there is some real Winning Stuff here and I love the concept of Happiness Islands.
I found the assertion that the majority of our time and effort is wasted very thought-provoking and it has led me, even at my advanced age – to reflect on how I spend my time and effort and I have made major changes in these areas to huge beneficial effect. Do buy the book and at least consider what Koch has to say with an open mind – it could change your life.