The 80/20 Principle by Richard Koch - should you read it?

Hi there!

With this blog post, I would like to start yet another section on my blog - reviewing non-fiction books, or in other words - should you read it?. This section will include the non-fiction books I've read with some of the key points I've noted down when reading them, which you may find useful when deciding should you read or not read a certain book.

I also want to use this section in order to gather new insights from others as well and for my future reference, if I end up re-reading some of them. I'll start with the one I mentioned in the title.

This post is the first one to be sent in the Wildcard newsletter described in this post. Grab yourself a cup of your prefered hot or cold beverage, and dive with me into this book.

About the author

First, a bit about the author. Written in 1998 by Richard Koch, a British management consultant, venture capital investor, and book author[1] thoroughly describes the Pareto principle which states that for many outcomes, roughly 80% of consequences come from 20% of causes. Other names for this principle are the 80/20 rule, the law of the vital few, or the principle of factor sparsity.[2]

Per my knowledge, this book has three editions. I've read the third one - The New, Updated Edition of the Business Classic, so in this blog post, I will write my general opinion of the book and the 80/20 principle that it describes.

Book overview

It is written in four parts, each of them explaining one view or the other of the 80/20 principle.

The first part is an introduction to the principle, what it is, when was first discovered, the similarity with different principles, and two ways of applying it. The key points from the first part are:

  • what it represents - the 80/20 states that more often than not, the 20% of the effort gives 80% results
  • different application approaches - experience and analysis driven.

Experience-driven approach to applying this principle is to think about the things that are important to you and your happiness, both personally and professionally, and concentrate on them the most. However, this doesn't mean that the 20% of effort will yield 80% of the results, it just means to find out what is important to us and concentrate on it.

The analysis-driven approach is to actually measure the effort and results. This approach is a bit complex one and requires time and dedication, so it is not recommended by the author in general.

The second part is describing how to apply the 80/20 principle in your business. This section wasn't part of what I wanted to learn by reading this book, therefore I skipped it and decided to concentrate on forthcoming parts.

The third part is describing how to apply this principle to life. This was a bit thought-provoking part for me, however, I found out that some of the concepts repeat over and over. Some of the key points out of this part were:

  • we have the time for everything that we choose is the most important to us
  • time is not the enemy, it is the way how we use it that is the problem, so we need to be really selective and determined about our time
  • time is not left to right, but cyclical, it keeps coming around, with new opportunities to learn and evolve
  • we need to have high value/satisfaction in both work and play, we shouldn't exchange one for the other.

I would recommend skimming this part of the book, you may end up finding some additional points that may become useful to you.

Last but not least is the fourth part. I think this one is added in the edition I read, and in my opinion, the most interesting and the best part of the book. In this section, the author lists out some of the comments and criticism of the principle from the earlier editions and gives a new approach to them. The main concerns and critiques of this principle are:

  • issue with cutting corners - e.g. getting 80% of results by only 20% of effort can be a bit simplistic and not an authentic way of approaching work and life
  • is it possible that applying this principle will not work in future
  • the question of balance - this is more related to applying the principle in life – that 80% of effort that brings 20% of results can somewhat be what is making us who we are.

The author next goes on in explaining two dimensions of this principle:

  1. efficiency dimension - where we want to achieve things in the fastest possible way with the least possible effort
  2. life-enhancing dimension - what is really important to us, work or life-wise.

In the end, he offers the solutions to the above-stated concerns:

  • cutting corners - aim to cut corners (if possible), doing things efficiently - in the best possible way, by saving time and effort, you shouldn't cut corners in the life-enhancing dimension of your life.
  • use of this principle requires a long-term view - in work, we should be aware of the potentially unintended consequences if we assume that the current position with the effort and reward will not change; in life - skills and relationships require investment, be selective about which abilities and people really matter, and take time and patience to build the foundation of lifetime commitment.
  • should we be balanced or unbalanced - both. Work can fall into both efficiency and life-enhancing category, the trick is to do less of the former and more of the latter. The same is in life - spend less and less time and vitality in your efficiency box, and more and more time in the life-enhancing box.


Questions I had before reading this book were:

  • what is the 80/20 principle?
  • how to apply it in life?

Was I able to answer those questions? Yes. Although it has the same concept repeated several times, I would recommend you to read this book. Depending on the questions you have, I would for sure recommend that you read the first and the fourth part. So, in a sense, you can apply the 20/80 principle to reading this book - the 20% of content will give you 80% of value.


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