| Definition of the 80/20 Principle | | | | in the right direction. |
| The 80/20 Principle is based on the fact that in most | | | | The 80/20 Principle turns conventional wisdom upside |
| cases 80% of the results come about due to 20% of | | | | down |
| the effort. The same is true in reverse 80% of failure | | | | Application of the 80/20 Principle implies that we should |
| is due to 20% lack of effort or effort in the wrong | | | | do the following: |
| direction. The relationship between effort and results | | | | 1. Celebrate exceptional productivity, rather than raise |
| are unbalanced. | | | | the average efforts. |
| When actually measured it may turn out that only 15% | | | | 2. Look for the short cut, rather than run the full course. |
| of the effort resulted in 80% of the result or 25% of | | | | 3. Exercise control over our lives with the least |
| the effort resulted in 73% of the result, but it will hardly | | | | possible effort. |
| ever be 50% of the effort resulting in 50% of the | | | | 4. Be selective, not exhaustive. |
| result. In other words it will never be balanced. | | | | 5. Strive for excellence in a few things, rather than |
| If you are looking at products, you will find the about | | | | good performance in many. |
| 20% of any given number of products in a company | | | | 6. Delegate or out source as much as possible in our |
| account for about 80% of the profits. The flip side of | | | | daily lives to specialists, instead of doing the work |
| this would be that 80% of the products make only | | | | ourselves. |
| 20% of the profits. Nearly always, a small proportion of | | | | 7. Choose our careers and employers with |
| the total products produce a large proportion of the | | | | extraordinary care, and if possible employ others |
| profits. | | | | rather than being employed ourselves. |
| How to use the 80/20 Principle | | | | 8. Only do the thing we are best at doing and enjoy |
| There are two applications of the 80/20 Principle, 80 | | | | most. |
| 20 Analysis and 80/20 Thinking. | | | | 9. Look beneath the normal texture of life to uncover |
| 80/20 Analysis | | | | ironies and oddities. |
| Precise | | | | 10. In every important sphere, work out where 20 |
| Quantitative | | | | percent of effort can lead to 80 percent of returns. |
| Requires investigation | | | | 11. Calm down, work less and target a limited number |
| Provides facts | | | | of very valuable goals where the 80/20 Principle will |
| Highly valuable | | | | work for you, rather than pursuing every available |
| 80/20 Thinking | | | | opportunity. |
| Fuzzy | | | | 1 2. Make the best of the few times in our life when |
| Qualitative | | | | we are at our creative peak and things are working |
| Requires thought | | | | really well. |
| Provides insight | | | | No boundaries |
| Highly valuable | | | | No activity is immune from the influence of the 80/20 |
| 80/20 Analysis looks at the relationship between two | | | | Principle. If you want the benefit from 80/20 Thinking, |
| sets of data. One set is always people or objects, | | | | you have to do it! |
| usually a large number of 100 or more, that can be | | | | When I was attending tech school and had taken all |
| turned into a percentage. The second set of data | | | | the courses offered in electronics, I unknowingly used |
| relates to some interesting characteristic of the people | | | | the 80/20 Principle by applying for a teaching job at |
| or objects that can be measured and turned into a | | | | the same school. That small step was the tipping point |
| percentage. | | | | in my career and eventually landed me a job with |
| 80/20 Thinking is a hypothesis about a possible | | | | Eastman Kodak Co. |
| imbalance between inputs and outputs. Instead of | | | | When Jesus called Simon Peter to follow him and |
| collecting data and analyzing them, we estimate them. | | | | become fishers of men, he was using the 80/20 |
| 80/20 Thinking requires us to spot the few really | | | | Principle by choosing a few to touch millions. Jesus |
| important things that are happening and ignore the | | | | concentrated on the twelve, teaching them so that the |
| large number of unimportant things. | | | | world might be reached. |
| When we are using the 80/20 Principle, we do not | | | | Suggested reading: The 80/20 Principle, By Richard |
| assume that its results are good or bad or that the | | | | Koch, ISBN 0-385-49174-3 |
| powerful forces we observe are good. We decide if | | | | Think of an example in you life where the 80/20 |
| they are good and if so encourage the minority forces | | | | Principle worked for you. |