Now this book is 11 years old, but I decided to pick it up anyway and it’s one of the best books I’ve read for a long time.

The basic recurring theme is that 80% of results are almost always created by 20% of the effort. 80% of revenue from 20% of customers, from 20% of employees, from 20% of invested money. 80% of divorces come from 20% of people that just divorce more often and thus skew the average statistic. 80% of pandemic deaths are caused by 20% of viruses and so on. Sometimes it’s 90/10, sometimes 99/1, but the key is that average numbers give us a false impression in, well, in 80% of the cases.

This book is written by a consultant and therefore about half of the book describes how to analyze corporate numbers and find good products, customers, places to broaden market share etc. This in itself is interesting, but the 2nd part of the book also gives advice on your personal career, entrepreneurship, relationships with friends and romances and the rest of life.

For example at one point he, as consultants like to do, classifies workers into a 2 by 2 matrix rating their performance and intelligence. The result is interesting:

  1. Stupid and Lazy : Leave them alone - they do little damage.
  2. Stupid and Hard-Working : Fire immediately.
  3. Intelligent and Hard-Working : Keep them, Good staff employees.
  4. Intelligent and Lazy : Outperformers, Key people.

Also included are a few summary lists that recommend action.
For example: Career rules for people of high education and high ambition.

  1. Find a narrow niche and develop core competency
  2. Find a niche where you have the chance to become a recognized competency or market share leader
  3. Recognize that knowledge is power
  4. Find your market, find your main customers and make them happy
  5. Find out what 20% of your efforts lead to 80% of your results (duh.)
  6. Learn from the best
  7. Go entrepreneur as soon as possible
  8. Try to find as many valuable people as possible to help you
  9. Outsource everything except your core competency to outside contractors
  10. Use leverage of capital

To sum up: It’s a great book, inspiring read that is also full of information, some interesting trivia, and that will probably change the way you look at certain things. And even if the principle itself is old news, reading that book is great fun. No wonder all later gurus now seem to me like mash-ups of Koch’s original ideas.

Ok time to go to work. :)

The 80/20 Principle at the Amazon


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