Category Archives: The 80/20 Principle by Richard Koch

Time Management with 80/20 Principle

“We have been conditioned to think that high ambition must go with thrusting hyperactivity, long hours, ruthlessness, the sacrifice both of self and others to the cause, and extreme busyness…The combination is neither desirable nor necessary. A much more attractive, and at least equally attainable, combination is that of extreme ambition with confidence, relaxation, and a civilized manner…Most great achievements are made through a combination of steady application and sudden insight…Most of what any of us achieve in life, of any serious degree of value to ourselves and others, occurs in a very small proportion of our working lives…We have more than enough time. We demean ourselves, both by lack of ambition and by assuming that ambition is served by bustle and busyness. Achievement is driven by insight and selective action.” (p. 141)


80/20 Thinking is Nonlinear

“Traditional thinking is encased within a powerful but sometimes inaccurate and destructive mental model. It is linear. It believes that x leads to y, that y causes z, and that b is the inevitable consequence of a…Linear thinking is attractive because it is simple, cut and dried. The trouble is that it is a poor description of the world and an even worse preparation for changing it.” (p. 140)

Project Management with the 80/20 Principle

“The shorter the time allowed for a project, the greater proportion of time that should be allowed for its detailed planning and thinking through. When I was a partner at management consultants Bain & Company, we proved conclusively that the best-managed projects we undertook–those that had the highest client and consultant satisfaction, the least wasted time, and the highest margins–were those where there was the greatest ratio of planning time to execution time.” (p. 122)

Five Rules for Decision Making with the 80/20 Principle

  1. “Not many decisions are very important…Do not agonize over the unimportant decisions and above all don’t conduct expensive and time-consuming analysis…If you can’t, decide which decision has a probability of 51 percent of being correct. If you can’t decide that quickly, toss a coin.”
  2. “The most important decisions are often those made only by default.”
  3. “Gather 80 percent of the data and perform 80 percent of the relevant analyses in the first 20 percent of the time available, then make a decision 100 percent of the time and act decisively as if you were 100 percent confident that the decision is right.”
  4. “If what you have decided isn’t working, change your mind early rather than late.”
  5. “When something is working well, double and redouble your bets.”

(pp. 116-117)