The 80/20 Principle
“The Secret of Achieving More with Less”
from Warrior Spirit.com 20 Nov 10 enhanced by Peter/CXO Wiz4biz 5/14
Examples of the 80/20 Principle. The amazing truth is:
– 80% of your Business comes from 20% of your Customers.
– 80% of your Products produce only 20% of your income. Focus on the 20% that is producing 80%. Eliminate or reduce the slowest movers.
– 80% of your Workers produce only 20% of the work. Focus on the 20% that is producing 80%. Train or look for opportunities to eliminate or reduce the least productive. The morale will rise also
– 80% of your Marketing produces only 20% of your income. Focus on the 20% that is producing 80%. Eliminate or reduce the non productive ones.
– 80% of the Sales revenue comes from 20% of Sales force. Focus on the 20% that is producing 80%. Train or look for opportunities to eliminate or reduce the least productive.
– 80% of your Productivity (and therefore the value of your efforts) comes from only 20% of actual time spent working.
– 80% of Anything that gets accomplished in your life comes from only 20% of your effort or time. So focus on that to accomplish more
Then, what is the 80/20 Principle – that most (80%) of what gets done is due to a minority of the causes (20%) – is the basis behind “The 80/20 Principle” book. This book, by Richard Koch, explains this concept and then illustrates what the 80/20 principle means for your everyday life. The subtitle, “The Secret of Achieving More with Less”,” is a pretty enticing promise, and I believe that the Author delivers on this promise. This book will change the way you see the world, and should be read by anyone interested in achieving their full potential (or at least 80% – Wiz4biz).
The Mechanics of 80/20. The first section of the book is dedicated to explaining the concept of the 80/20 principle. This principle is simple: most of what you accomplish is the result of only a minority of your effort. The ratio might be 90/10, 80/20, 70/30 or even 60/40, but it is probably unbalanced if you take the time to analyze it. The principle applies not only to individual productivity, but personal happiness, social programs, & natural phenomenon (the process of natural selection follows the 80/20 principle).
In Business, for example, the vast majority of most companies’ revenue comes from a small minority of the customers. However, most companies spend equal amounts of time & energy on all their customers, which ultimately leads to frustration for the good customers(who deserve better) and a waste of resources on the bad customers. If your good customers give you most of your money, why not direct most of your resources to them? This process of finding the inefficiency and using 80/20 to develop your most valuable assets, takes up the rest of the book.
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