First of all, I would like to confirm the subtitle of “The 80/20 Principle” is “The Secret of Achieving More with Less“. We can find good insight into how to use our time or resource using the 80/20 principle.
The 80/20 principle is the imbalance between cause & outcome, input & output, effort & reward.
For example, 80% of our achievements come from 20% of our time. So the 80/20 principle consists of a large number with little influence and a small number with overwhelming influence.
Another example is that 80% of the value of a book can be found in 20% of pages. So we don’t have to read the all pages and try to get 80% of the value in 20% of the time. To do this, we read the conclusions first, then the introduction, then read some interesting chapters.
For our business, the 80/20 analysis is to find out “Who (or What) are 20% of customers (or products) that make up 80% of profits?“
The 80/20 principle is a very useful tool and a concept that is easy to understand.
Thank you for reading this post.
Please check Richard Koch’s website for Books, Blogs, and Podcasts.
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