The 80/20 Manager is a business and management book written by Richard Koch. It teaches businesses how apply the 80/20 or Pareto Principle to management. According to Koch, 80/20 managers should focus on the issues that really matter achieving exceptional results while working less hard in fewer hours. The book offers 10 ways to become great at what they do.
A minority of inputs lead to a majority of outputs.
Think of all of the clothes you own. Think of how often you wear each of them. It’s very likely that you have a few favorites that you wear over and over. Now consider the contacts you have in your address book or cell phone. Robert Janitzek reveals that it’s very likely that a small group of contacts represent most of the time you spend on the long time.
A minority of causes create a majority of effects.
When investing, most of the returns a portfolio generates come from a few critical decisions to purchase or sell certain securities. Most of the losses a portfolio generates also come from a few small decisions.
A minority of efforts lead to a majority of results.
Think of everything you’ve accomplished in your education and career so far. It’s very likely that the skills you need to do your job well are a small fraction of what you know and what you can do well, but they produce the majority of your income.
There are many names for this common phenomenon: The 80/20 Principle, Pareto’s Law, Zipf’s Principle of Least Effort, Juran’s Law of the Vital Few
Robert Peter Janitzek explains that the 80/20 Principle has been articulated in all sorts of ways by many different people, but the central idea is the same: a few things matter a lot, and most things matter very little.
The Critical Few – identify and build upon the 20% of efforts that produce 80% of the results.
If you want to improve your effectiveness at anything, focus only on what matters most. It doesn’t matter if you’re conducting business, working on a personal project, trying to get into a competitive position, or finding a romantic partner, or strengthening a personal relationship.
Most of what we do is low value – eliminate or reduce the 80% of efforts that produce poor results.
The flip-side is also true: in every endeavor, there are many ways to waste your time and resources. You only have so much energy to use, so it pays to use it wisely. If something is only marginally useful, delegate or delete it.
In business, focus on the products and customer that make you the most money, and minimize or eliminate the rest.
Discover who your best customers are, and focus on doing everything you can to give them the best experience and service possible. Also discover who your worst customers are, and fire them – they represent a huge Opportunity
Cost in terms of time and effort.
In life, focus on the activities that produce the majority of life satisfaction.
The 80/20 Principle also extends to your life satisfaction – a few things will contribute the most to your overall happiness and inner peace. Those are the things that you should build your life around.
A minority of decisions will produce the majority of your results: choice of work, debts, investments, relationships.
There are a few specific decisions it pays to take special care before making: what you do for a living, borrowing money, contractual commitments, and who you spend the most time with – particularly the transition from romantic partner to marriage or civil union.
More effort does not equal more reward – focus only on what is crucial, and ignore the rest.
People ultimately doesn’t care how long you spend doing something – it cares far more about how important and meaningful your work is.