The 80/20 Principle - Richard Koch - Part 1

2017 Reading Challenge - Day 86

  March 27, 2017 

Book 28 - The 80/20 Principle: The Secret to Achieving More with Less
by Richard Koch (2008)
 Part 1 - pages 1-57
Reading Time - 1 hour

I'm pretty sure I've read this book before but, again, I was browsing the library shelves and it jumped out at me. It's still an interesting read and a bit of a procrastination. Betty Friedan's book, The Feminine Mystique, arrived via the library and it is a substantial and weighty book which, judging by the number of pages and density of text, might take me 2 weeks to read! So, a bit of light reading before I dive into that.

The 80/20 principle was originally developed by an Italian, Pareto, in 1897. It's a pretty simple idea that basically says things are unbalanced. For example, 20% of people own 80% of the wealth. Or, 20% of a company's products generate 80% of its revenue/profits. The numbers don't have to be 80/20... they could also be 70/20 or 80/10 or 90/15. The idea is that things aren't 50/50, at least not naturally.

The 80/20 rule has been applied by corporations, economists and computer programmers for decades. The author suggests, however, that we can also use it to good effect in our own lives. If, for example, we wear 80% of our clothes, 20% of the time... why not clear out our closets (or our houses). That's a kind of simple example but... I'm looking forward to seeing where else I could use it. The idea is that if we get clear on the 20% of whatever it is that we do that generates 80% of the results, then we can either devote more resources to those activities or modify the rest of what we do to be more productive.

The author touched briefly on the idea that even a tiny bit of an edge (for an animal, or a company) means that it will eventually outperform all the others. Even a bit of an edge - being a bit faster, or a bit stronger, means that one gets more than the others. Which means that on the next go around, we'll get even more. It's this tiny edge that leads to the imbalance where some end up with 80% of the resources and others don't. Which makes me wonder at some of the other stuff I've been reading which says that income inequality is a major cause of the misery in some first world countries. In a free-market economy though, one that is not regulated, nature dictates that there will be an inequality. 10% of the people will own 99% of the wealth. Sooo... how can we counter that? Hoping that this book might lead me in that direction.