Skip to main content

80/20 Book Review

From time immemorial our elders have preached the merits of working long and hard to succeed. The motto that hard work equates to success is a rational concept, yet upon closer analysis, the empirical evidence doesn’t actually stack up.


Over a 100 years ago an Italian Economist Vilfredo Pareto produced some counter intuitive evidence that seemed to suggest that 80% of Europe’s wealth was controlled by 20% of the population, and this pattern of skewed effort and reward manifested itself in all manner of societal observation.


80% of Crime appeared to be committed by 20% of criminals. 80% of carpet receives 20% of the wear! 20% of Insurance Sales Reps earn 80% of total commissions. You get the point.


Richard Koch examines Pareto’s Principle from both an economics and business management perspective and is unequivocal in his endorsement and the lessons and advantages that can be gleaned from acting in accordance.


Unlike many authors who talk the talk but often fail in the walking department, Koch achieved significant financial success in his private equity investments business, which he attributes to the application of this strange theorem.


Many successful business entrepreneurs attribute much of their success to the application of Koch’s lessons, and this book is frequently quoted as being the most influential and favourite book in many a library.


Some of the lessons that Kock espouses:


“Leverage your own time so that you focus on the things where you add five times more value than elsewhere.”


“Choose a niche that you enjoy and in which you can excel”

“Identify where 20% of effort gives 80% of returns”

“Figure out the 20% of what you do that will contribute the most to your success in the future, then concentrate your time and energy on that 20%”



Anyone who’s ever played golf can probably appreciate the quirky contradiction that the harder you try to hit the ball the less likely it will travel far. The more you relax the better you will perform.


This is a lesson that very few amateur ‘hackers’ will ever truly accept, and therefore continue in their futile attempt to defeat the law of effort and reward. Less effort, concentrated in the pivotal area will always produce the highest degree of reward.


This is a book that takes a little patience to reach its conclusions. The first half reads like an economics manifesto, full of graphs and charts, with statistical analysis that will not be to every one’s palette. The second half however is worth waiting for. There are at least a dozen lessons that if applied can produce some profound changes in your results.


At the risk of sounding banal, you’ll probably find that 80% of the benefits you’ll gain from reading this book will come from a mere 20% of the content!



Comments

Popular posts from this blog

The Road Less Traveled - Conformity May Be Your Achilles Heel

The tone of this post is wry and gently provocative and not a rallying to call to quit your job, divorce, burn your friendships, or change one iota of your current status quo - not that there's necessarily anything wrong with that!
We are the champions"– so sang Freddie Mercury an eternity ago and the song echoes throughout the great sporting stadiums of the world. It’s rousing and evocative. Evocative of shared triumph – and epitomizing a truly tribal sense of belonging.
There’s a primeval urge that is felt by all reasonably socialized individuals to fit. As rebellious youth we are defiant in our rejection of stereotype. It’s all about the individual, and expressing that unique albeit pompous voice that contradicts the old fashioned social mores and yet….. With an uncanny predictability, each generation ever so subtly morphs into a diluted version of their parents. 100 years ago The Who proclaimed, “I hope I die before I grow old ” and with an irony that is breathtaking, sold t…

Ordinary May Be Overrated!

We live in a culture that increasingly embraces connectivity. The melding of outward disconnection with a simultaneous 24/7 digital conversation is both ironic and mildly disconcerting to those of us not permanently attached to this digital umbilical chord.

Social niceties and courtesies are becoming severely diluted. I recently navigated the labyrinth that is Victoria Station and found myself marveling at the mass commuter hive of activity and yet clinically barren of human interaction.

Each earnest participant on this treadmill journey seemed to be lost almost trance-like in some parallel universe, having engaged some sort of automatic homing device to skilfully navigate the human traffic.
Ipods at full volume, newspaper in one hand, steaming coffee in the other and midst this madding crowd a complete absence of eye contact. 

In this new world it would seem arcane and redundant to distract the herd by smiling, excusing yourself or being so bold as to offer some poor lost soul assistanc…

Why Isn't The Law of Attraction Working for You?

This is a confronting and provocative question. It presumes there’s a gap in your life and that you are in some way failing, falling short of your own expectations.


If The Law of Attraction does indeed work, how then do we explain how bad things happen to good people? How can we explain how the worst of criminals can win the Lottery? Indeed we can question whether this much-quoted Law is in fact a myth.


The point of this article is not to ponder the riddle of this apparent phenomenon or get bogged down in the mire of attempting to define the intangible. Rather I would like to posit the following commentary.


Let’s twist the above question. Imagine that despite your initial reaction to the topic, that you are indeed living the dream, but have failed to realize this fact. Perhaps your appreciation lens is clouded. 
Perhaps you are with your ideal life partner but are blinded to this fact by virtue of your incessant fantasizing of some parallel universe where some Goddess or G…