When you are doing something with extreme passion, dedication, and commitment, your expectation for achieving remarkable results gets higher. And why not?
But the reality is, our 80% of outputs, results, and consequences come from 20% of inputs, efforts and causes.
This is what Richard Koch, a British author who has written several books on management, talks about in his book “The 80/20 Principle.”
He specifically sheds light on how a person can achieve more results with much less effort by following the 80/20 principle.
So, without further ado, let’s take a closer look at what the 80/20 principle really is.
The 80/20 Principle
The 80/20 Principle says that the majority of your results come from a minority of your causes. It was first discovered by Economist Vilfredo Pareto in 1897 and became popular after WWII.
The ratio might not be exactly 80:20, but the core idea is – there is always a non-linear relationship between efforts and results.
When we talk about society, 20% of people own 80% of the wealth. Similarly, in the corporate world, 20% of our products/services contribute 80% of our revenues. And when it comes to home, 20% of the clothes are worn 80% of the time.
So, how to Apply the 80/20 Principle?
The 80/20 Principle clearly suggests that there is a massive inefficiency around us, but there is also an incredible potential to take our current results to the next level.
Let’s take a look at some of the tips on how to use the 80/20 Principle.
Identify Your Top 20% vs Bottom 80%
This can be done by taking a more analytical approach:
80/20 Analysis: Create a hypothesis about an 80/20 relationship and test it by collecting and comparing 2 sets of data.
80/20 Thinking: Think deeply about an important question, develop your 80/20 hypothesis intuitively, and then take actions to apply it.
Reallocate Your Time/Resources in Two Ways
Reallocate resources to the 20%, which can be done easily by moving your time and resources away from the 80%. The math is simple, invest your energy where it is working well.
Think about the rest of the 80%. Why is it under-performing? Address the issues and come up with a more effective plan.
Points to Remember When Applying the 80/20 Principle
- Don’t try to master everything. Be selective and only work hard on areas that matter the most.
- Move your resources from low-value to high-value uses.
- Think deeply to understand why you are getting good or bad results in certain areas.
- When it comes to success, there is no such thing as luck. Therefore, whether things are going well or against the plan, look for the hidden causes or reasons.
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