I recently spoke on the 80/20 principle at the spiritual business group TGIT – Thank God It's Thursday http://www.ambica.net/thank_god_its_thursday.html
TGIT is part Book Reading Club, part Support Group and part Mastermind Group that puts us – the participants – in touch with our Deepest Essence through sharing, reflecting on, and applying wisdom from some of the most ancient as well as today's progressive inspirational literature.
The 80/20 Principle says that there is an inbuilt imbalance between inputs and outputs, causes and consequences, and effort and results. Furthermore, a minority of causes, inputs or effort usually lead to a majority of the result, outputs, or rewards. A few things are important; most are not. Most systems have an non-linear imbalance in them where a minority of inputs create a majority of the results. This is caused by the butterfly effect – small fluctuations in seemingly minor events having a big result, similar to chaos theory. Feedback loops keep a system moving in one direction until hitting a tipping point, at which point small efforts make a big difference.
A typical example is the 80/20 relationship where 80% of results come from 20% of effort. The 80/20 numbers here are only a metaphor. The real relationship may be more or less unbalanced than 80/20. The fact that 80 and 20 add up to 100 is a coincidence. The point is that a small amount of input creates a majority of the results. It could be that 5% of your effort creates 70% of the output, or maybe it creates 90%. It is rare for the relationship between input and output to be linear or 50/50. Yet this is the assumption that many people make of all situations – that working an extra hour is worth the same as any other hour already worked.
The 80/20 Principle is inherently optimistic, however. To achieve more with less focus on the 20% of resources that really matter in terms of achievement, and let go of (or delegate) the remaining 80%.
Examples:
* 80% of the bugs come from 20% of the code
* 80% of customer complaints can be eliminated by correcting only 20% of the causes.
* 80% of the benefits will be found in the simplest 20% of the software system.
* Most software spends 80% of its time executing only 20% of the available instructions.
* 80% of memory access is for only 20% of records.
To learn more see the book “The 80 / 20 Principle: The Secret to Success” by Richard Koch
OR
Read the Executive Summary by Vadim Kotelnikov.
http://www.1000ventures.com/business_guide/crosscuttings/80-20principle.html
