“The 80/20 Principle, like the truth, can make you free. You can work less. At the
same time, you can earn more and enjoy more. The only price is that you need to
do some serious 80/20 thinking.”
~ Richard Koch from The 80/20 Principle
We’ve all been exposed to the 80/20 Principle at some point in our lives: The principle states,
quite simply, that 20% of efforts lead to 80% of results. Whether you know it as the “Pareto
Principle” or the “Principle of Least Effort,” it’s an incredibly powerful concept.
Although many authors discuss the 80/20 Principle as a core component of their time
management and self-development programs, Richard Koch (a former Bain & Co and BCG
Consultant) provides an entertaining and practical application of the theory in his great book
The 80/20 Principle: The Secret to Success by Achieving Less. In fact, he’s become the living
guru on the subject and if you dig this Note, you’ll definitely enjoy the book—which is densely
packed with Big Ideas you can apply to your business, relationships, time management tactics
and even (especially!) to discovering and living your purpose.
Trust you’ll enjoy this quick look at the book and that the Big Ideas will get you thinking about
how you can focus your time and energy on the activities that give you the most results!
PARETO & 80/20: IT’S EVERYWHERE!
“80/20 thinking requires, and with practice enables, us to spot the few really important things
that are happening and ignore the mass of unimportant things. It teaches us to see the wood for
It was 1897 when Vilfredo Pareto, an Italian economist, was studying wealth and income
distribution in 19th Century England. During the course of his studies, he discovered that the
majority of land and income was controlled by a minority of the population.
In fact, 20% of the population controlled 80% of the wealth and income.
On further analysis, mythical lore says that he found that this principle held true not only in
different countries and different time periods, but also in contexts such as his garden—where he
discovered that 20% of his peapods yielded 80% of the peas that were harvested!
Since our pal Vilfredo identified the trend, many researchers have been busy pointing out some
additional modern applications.
Check these out:
• 20% of criminals account for 80% of crime
• 20% of motorists account for 80% of accidents
• 20% of married individuals account for 80% of divorces
• 20% of your carpet probably gets 80% of the wear
• 20% of streets account for 80% of the traffic
The 80/20 Principle
The Secret to Success by Achieving More with Less
BY RICHARD KOCH · CURRENCY © 1999 · 288 PAGES
THE BIG IDEAS
Pareto & 80/20
Applying the Principle!
What’re are your 20%’s?
What do you (really) want?!
Who do you love?
How do you learn?
Yes, your diet.
Put all your eggs in one basket.
(Pretty, please. )
1 PhilosophersNotes | The 80/20 Principle
“Things which matter
most must never be at
the mercy of things that
~ Johann Wolfgang von Goethe• 20% of product flaws account for 80% of problems
• 20% of clients usually account for 80% of profits
I could go on, but I think you get the idea!
… Oh, why not a few more? :)
• 20% of clothes in your closet are worn 80% of the time
• 20% of beer drinkers drink 80% of the beer
OK. I’m done for now.
Your job, however, has just begun. Look around you. See where you spend your time.
See where you get your results.
Is it 50/50 or more like 80/20?
APPLYING THE PRINCIPLE!
The next logical question is clearly: “OK, so how does this apply to me?”
As Koch states: “20% of what we do leads to 80% of the results; but 80% of what we do leads to
only 20%. We are wasting 80% of our time on low-value outcomes.”
Rather than pursuing every available opportunity, Koch suggests we “calm down, work less and
target a limited number of very valuable goals where the 80/20 Principle will work for us.”
Koch spends half the book on how to apply the 80/20 Principle to your business (including a
chapter on “Why Your Strategy is Wrong”) and dives into detailed processes to help you figure
out what’s up with the 80/20’s currently hiding in your business.
Remember: He’s a former (very) successful consultant, so he’s extremely good at bringing the
principle to life in your business. If you’re running a business and have the sense you’re not
quite focusing on the 20% you should be focusing on, you’ll absolutely dig the book just for these
chapters. For this Note, however, I’m going to only briefly touch on some of the business stuff
and then get into the personal applications (the other half of the book) to bring out some of
Koch’s equally brilliant Big Ideas for your overall hero’s journey.
So, let’s get to business!
“The 80/20 Principle suggests that your strategy is wrong. If you make most of your money out
of a small part of your activity, you should turn your company upside down and concentrate your
efforts on multiplying this small part.”
The (very) quick look at applying 80/20 to your business: “Twenty percent of products usually
account for about 80 percent of dollar sales value; so do 20 percent of customers. Twenty
percent of products or customers usually also account for about 80 percent of an organizations
Do you know where your revenue comes from? Find out.
Do you know where you spend your time? Find out.
2 PhilosophersNotes | The 80/20 Principle
“The few things that work
fantastically well should
be identified, cultivated,
nurtured, and multiplied.”
~ Richard Koch
“Those who analyze the
reasons for their success
know that the 80/20 rule
applies. Eighty percent of
their growth, profitability
and satisfaction comes
from 20 percent of the
clients. At a minimum,
firms should identify the
top 20 percent to get a
clear picture of desirable
prospects for future
~Vin ManaktalaHere’s what the book suggests: “It is almost certainly true that you make at least 80 percent of
your profits and cash in 20 percent of your activity, and in 20 percent of your revenues. The trick
is to work out which 20 percent.”
I’ve always been passionate about simplifying my businesses and focusing our team’s efforts on
the few activities that we believed would yield the greatest results during our start-up phases.
How about you?
Are you wasting time on activities you KNOW aren’t yielding the results you want? Well, stop!!!
And, find the 20% of stuff that’s working and DO MORE OF IT. Starting now. (Ahem. :)
“Executives may suspect that some customers and some products are more profitable than
others, but when the extent of the difference is proved, they are likely to be surprised and
Now, let’s take a peak at how we can apply the 80/20 Principle to living our hero’s journey.
Koch’s incredible passion for creating your ideal life is palpable as you read his words. Truly
amazing. And the way he weaves the 80/20 into creating your ideal is genius.
So let’s start with step #1:
“Everything you want should be yours: the type of work you want; the relationships you need;
the social, mental, and aesthetic stimulation that will make you happy and fulfilled; the money
you require for the lifestyle that is appropriate to you; and any requirement that you may (or
may not) have for achievement or service to others. If you don’t aim for it all, you’ll never get it
all. To aim for it requires that you know what you want.”
It comes from Chapter 11: “You Can Always Get What You Want” which may just win best
chapter title ever. :)
So, Rule #1 in applying the 80/20 Principle to creating your ideal life is simple: We need to know
what we want. (It also helps to be unreasonable. See Shaw to your left there. :)
So, we’ll start with a simple question: What’s your ideal?
• What do you absolutely LOVE to do?
• What comes to you effortlessly?
• With whom would you love to spend your time?
• What would you be doing throughout the day?
• How much would you make?
• Where would you live?
• Would you be able to hike or meditate or sit in your sauna (my personal favorite :) whenever
you want or would you have a boss telling you what you can do when?
Good. Let that flow.
Grab your journal or a sheet of paper and write down what flows through you. Now! (Seriously.
We need to quit putting stuff like this off, because we rarely get around to it “later”!!)
When we have a handle on what we want, we can start to look at whether what we have and what
we’re doing matches up with these ideals. AND, of course, we can do something about it!
PhilosophersNotes | The 80/20 Principle 3
“A simple business is
always better than a
“The reasonable man adapts
himself to the world. The
unreasonable one persists
in trying to adapt the world
to himself. Therefore, all
progress depends on the
~ George Bernard ShawWHAT’S EASY?
“It is important to focus on what you find easy. This is where most motivational writers go
wrong. They assume you should try things that are difficult for you.”
This wisdom is echoed throughout these Notes.
From Martin Seligman who says this in his classic Authentic Happiness (see Notes): “I do not
believe that you should devote overly much effort to correcting your weaknesses. Rather, I
believe that the highest success in living and the deepest emotional satisfaction comes from
building and using your signature strengths.”
To Leo Buscaglia in Love (see Notes): “You are the best you. You will always be the second best
As Koch advises, we need to: “Pursue those few things where you are amazingly better than
others and that you enjoy the most.”
So, what are you amazingly better than others at?
I am amazingly better than others at:_________________________________________
And, what I enjoy most doing is:____________________________________________
Now that we’re getting some traction on what you’re most passionate about, let’s take a quick
peak at the people with whom you’ll be sharing this joyous life!
“Relationships help us to define who we are and what we can become. Most of us can trace our
successes to pivotal relationships.”
News flash: 20% of your friends/loved ones probably account for 80% of your enjoyment
Might sound harsh, but why wouldn’t you spend a lot more time with the group that gives you so
much pleasure and a lot less time with the other?!?
Koch has a brilliant exercise to bring the truth of the 80/20 applied to relationships to life. Get
out your journal (or, perhaps a piece of paper you can immediately burn afterwards :) and write
down the names of your Top 20 friends and loved ones—the people with whom you have the
most important relationships—ranked from most to least important.
Next step: You have 100 points. Allocate them to the different people according to how much
value they give you in your life relative to one another. As Koch says, you may need more than
one pass at the numbers to get ‘em to 100. (And, what you’re likely to find is that around 4 of the
people (20%) give you 80% of your joy.)
Next step. You have 100 units again. Next to the enjoyment numbers, write down how much
4 PhilosophersNotes | The 80/20 Principle
“For the individual, too, it
is better to know a few
things well, or preferably
one thing exceptionally well,
than it is to know many
~ Richard Koch
“A surprising number of
people spend a lot of time
with people they don’t like.
This is a complete and
utter waste of time. It’s
not enjoyable, it’s tiring.”
~ Richard Koch
“You are the average of the
five people you spend the
most time with.”
~ Richard Kochtime you spend with each person such that the total time comes to 100.
What’d you come up with? Are you spending far less than 80% of your time with the 20% who
give you so much joy?
As Koch says: “The action implications should be plain. Go for quality rather than quantity.
Spend your time and emotional energy reinforcing and deepening the relationships that are
Lest you think this is some weird idea from an overly-zealous consultant/author, know that
Abraham Maslow, the great psychological researcher who created his “Hierarchy of Needs” and
coined the phrase “Self-Actualizing” says pretty much the same thing:
“Self-actualizing people have these especially deep ties with rather few individuals. Their circle
of friends is rather small. The ones that they love profoundly are few in number. Partly this is
for the reason that being very close to someone in this self-actualizing style seems to require a
good deal of time. Devotion is not a matter of a moment… One subject expressed it like this: ‘I
haven’t got time for many friends. Nobody has, that is, if they are to be real friends.’”
Koch shares a story of the wisdom his tutor at Oxford shared with him. First, he advised him
not to attend lectures because: “Books can be read far faster… But never read a book from cover
to cover, except for pleasure. When you are working, find out what the book is saying much
faster than you would by reading through. Read the conclusion, then the introduction, then the
conclusion again, then dip lightly into any interesting bits.”
How do you read a book? Do you go from cover to cover? Why? You’re wasting a lot of time. 80%
of the valuable content can be found in 20% of the book… and, according to Koch, absorbed in
20% of the time it takes most people to read the entire book.
Fun little application: Several years ago, I taught the 80/20 principle to a friend’s 10-year-old
daughter who was struggling in school. She learned to read the conclusions, check out the graphs
and charts and pictures and leading questions, and then read and mind map the content. Her C’s
went to A’s in about a month and a half.
And, more importantly, she liked herself and learning a lot more. (When I visited her school
for special friends day her teacher came up to me and asked in a whisper: “What did you do to
her?!?” I told her it was all about the 80/20 Principle. :)
So, unless you’re reading a book for pleasure, read the conclusion then the intro, check out the
graphs and pictures and then the conclusion again and maybe some sections a little deeper if you
find it particularly interesting. And teach your kids if you have them!!
My diet? Yes, your diet.
If you’re like most people, you might get a little confused by all the conflicting information the
experts share these days. Why not 80/20 your diet?!?
The reality: 20% of your healthy eating habits account for 80% of your health gains. Focus on the
fundamentals—that 20% that will give you 80% of the gains you’re looking for.
And, what are the fundamentals? The obvious stuff that we all know we should be doing but few of
us actually do.
Are you drinking enough water (take your body weight, divide it in half and drink that many
PhilosophersNotes | The 80/20 Principle 5
“For both personal and
fewer and deeper is better
than more and less deep.”
~ Richard Koch
“What is the 20 percent
of your time when you
achieve 80 percent of your
results? Do more of it!
What is the 80 percent of
your time when you achieve
little? Do less of it!”
~ Richard Kochounces)? Eating breakfast? Eating a lot of fresh, organic fruits and vegetables? Avoiding refined
foods and refined sugar?
You do these things and you’re 80% there.
And, you’ll be surprised how quickly your energy will increase (not to mention how quickly the
number of compliments from your spouse/significant other will increase as well! :).
“Whenever you spot a 20 percent activity, run to it, surround yourself with it, immerse yourself
in it, patent it, make yourself its expert, worshipper, high priest, partner, creator, propagandist,
and indispensable ally. Make the most of it. If the most appears to be more than you can
imagine, multiply your imagination.”
How great is that?!?
80/20 is all about focusing your energy. As Koch says: “Conventional wisdom is not to put all of
your eggs in one basket. 80/20 wisdom is to choose a basket carefully, load all your eggs into
it, and then watch it like a hawk.”
It’s amazing how many people hedge their bets. What about you?
Are you holding back from pursuing your dreams? Hedging a bit and waiting until just the right
time (that will probably never come, btw)?
Discover what you’re most enthusiastic about, and focus your energy on how you can serve the
world by sharing your gifts with that enthusiasm! (Pretty, please.)
Well, what are you waiting for?
Choose your basket carefully, load all your eggs into it, and create your ideal life!
2. Mark Teixeira - Angels. The Angels can probably afford one of Sabathia, Teixeira, and K-Rod. They need Tex the most.
25. Randy Johnson - Angels. An improvement on Garland, and they get the bonus of his 300th win.
47. Garret Anderson - Angels. The Halos will decline his $14MM option, but may look to bring him back at a lower salary.— Tim Dierkes of MLBTRADERUMORS.COM predicts where the “Top 50” Free Agents will sign this baseball offseason. He has some interesting takes ( The Big Unit to the Angels and AJ Burnett to the Orioles). These lists are always a crap shoot, but its always fun to imagine.
Walt Disneys 1958 vision of future transportation
Best typo ever