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Review: The 80/20 Principle: The Secret to Success by Achieving More with Less by Richard Koch

The 80/20 Principle: The Secret to Success by Achieving More with LessThe 80/20 Principle: The Secret to Success by Achieving More with Less by Richard Koch
My rating: 4 of 5 stars

This book is a truly enlightening and motivating look at productivity, time management, and happiness. It shows how to apply the 80/20 Principle to your personal and professional life in order to work less, earn more, enjoy more, and achieve more. The main idea: in business and personal life, “pursue those few things where you are amazingly better than others and that you enjoy most,” and eliminate or outsource everything else. This has immediately become one of my favorite self-improvement books.

The 80/20 Principle is the doctrine that in general, 20% of efforts produce 80% of results. There are only a few things (the vital few; the 20%) that ever produce important results, and most activity (the trivial many; the 80%) is a waste of time. The ratio isn’t necessarily always 80/20, but the idea is that the relationship is unbalanced. To learn more about the 80/20 Principle, see the Wikipedia article on the Pareto Principle.

I liked these major ideas:
  • It’s more effective to focus on improving the top 20% than the bottom 80%.
  • Employ others rather than being employed.
  • Calm down, work less, and target a few valuable goals.
  • There’s no shortage of time; we only feel that way because 80% of our time is wasted.
  • Set impossible timelines to force a focus on only what’s important.
  • Happiness depends on relationships, so forge and maintain a few close personal and professional relationships (the 20%).

At the end of the book, Koch addresses objections to applying the 80/20 Principle to life. I liked his response: “We don’t want to be obsessed with efficiency, but we do want to dispose of the non-life-enhancing activities as easily and swiftly as possible.”

The 80/20 Principle appears in many other books, including the concept of the most important thing in Getting Things Done by David Allen (my review), Habit 3: Put First Things First) in The 7 Habits of Highly Effective People by Stephen Covey (my review), the Hedgehog Concept in Good to Great by Jim Collins (my review), and most of The 4 Hour Workweek by Timothy Ferriss (my review).

I read this book because it was featured in 50 Self-Help Classics (my review).

Part 2: Corporate Success
  • 80% of profits come from 20% of customers, and 80% of sales come from 20% of products.
  • Neither big nor small businesses are necessarily better; it’s simplicity that leads to higher profitability. Because of scale, big and simple is best in theory; in practice, small businesses tend to be simpler.
  • Focus on your competitive advantage, and outsource everything else.
  • Corollary: the 50/5 Principle: the bottom 50% of customers, products, and suppliers make up only 5% of revenue and profits.

Part 3: Work Less, Earn and Enjoy More
  • 80% of achievement and happiness takes place in 20% of time.
  • Money not spent today can be saved and invested for future use, but happiness not used today doesn’t carry forward. Use it!
  • The 20% of people who achieve the most work for themselves or behave as if they do.
  • Just say no to low-value requests from others.
  • Focus on what you find easy, not difficult.

Career success
Specialize in a narrow niche, then use the 4 forms of labor leverage:
  1. Leverage your own time by focusing on your strengths.
  2. Capture 100% of its value by becoming self-employed.
  3. Employ as many net value creators as possible.
  4. Outsource everything that you and your colleagues aren’t best suited for.

Happiness
  • Read Emotional Intelligence by Daniel Goleman (my review).
  • Change your attitude and actions to achieve happiness.
  • “Optimism...is a medically approved ingredient for but success and happiness, and the greatest motivator on earth.”

Shortcuts to a happy life
  • Maximize control over your life.
  • Set attainable goals.
  • Be flexible when chance events interfere with plans.
  • Have close relationships with your partner, a few happy friends, and a few professional allies.
  • Evolve the lifestyle you want.

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