T h e u n i v er se i s w on k y !

1
Wh at i s t h e 80/20 Pr i n ci pl e?
Figure 1. The 80/20 Principle
Wh y t h e 80/20 Pr i n ci pl e i s so i m p or t an t
The an d ch aos t h eor y
A gu i d e t o t h i s gu i d ebook
Wh y t h e 80/20 Pr i n ci pl e br i n gs good n ew s
2

D ef i n i t i on of t h e 80/20 Pr i n ci p l e
Figure 2.
Figure 3. A typical 80/20 pattern
Figure 4. An unusual 50/50 pattern
Wh at t h e 80/20 Pr i n ci p l e can d o f or y ou
 H ow t o u se t h e 80/20 Pr i n ci p l e

Figure 5. Two ways to use the 80/20 Principle

Figure 6.
Figure 7. 80/20 frequency distribution chart of beer drinkers
Figure 8.
Figure 9.
80/20 T h i n k i n g an d w h y i t i s n ecessar y
T h e 80/20 Pr i n ci p l e t u r n s con v en t i on al
w i sd om u p si d e d ow n
3
T h e f i r st 80/20 w av e: t h e qu al i t y r ev ol u t i on
 T h e secon d 80/20 w av e:
t h e i n f or m at i on r ev ol u t i on
T h e i n f or m at i on r ev ol u t i on h as a
l on g w ay t o r u n
T h e 80/20 Pr i n ci pl e i s st i l l t h e best -k ep t
bu si n ess secr et
Wh y t h e 80/20 Pr i n ci pl e w or k s i n bu si n ess
L ook f or i r r egu l ar i n si gh t s f r om t h e
80/20 Pr i n ci pl e
H ow com p an i es can u se t h e
t o r ai se p r of i t s
4
Wh er e ar e y ou m ak i n g t h e m ost m on ey ?
Figure 10. Electronic Instruments Inc, sales and profits table by product
group
Figure 11. Electronic Instruments Inc, sales and profit chart by product
group
Figure 12. Electronic Instruments Inc, 80/20 Table

Figure 13. Electronic Instruments Inc, 80/20 Chart

 Wh at abou t cu st om er p r of i t abi l i t y ?

Figure 14. Electronic Instruments Inc, sales and profits table by customer
group
Figure 15. Electronic Instruments Inc, sales and profits chart by customer
group
Figure 16. Electronic Instruments Inc, 80/20 Table by customer type

Figure 17. Electronic Instruments Inc, 80/20 Chart by customer type

 80/20 An al y si s ap p l i ed t o a
con su l t an cy f i r m

Figure 18. Strategy Consulting Inc, table of profitability of large versus small
projects
Figure 19 Strategy Consulting Inc, chart of profitability of large versus small
clients

Figure 20 Strategy Consulting Inc, table of profitability of old versus new

Clients
Figure 21. Strategy Consulting Inc, chart of profitability of old versus new
clients

Figure 22. Strategy Consulting Inc, table of profitability by project type

Figure 23. Strategy Consulting Inc, chart of profitability by project type
Segm en t at i on i s t h e k ey t o u n d er st an d i n g
an d d r i v i n g u p p r of i t abi l i t y
Figure 24. Electronic Instruments Inc, table of profitability by segment
Figure 25. Electronic Instruments Inc, chart of profitability by segment
Figure 26. Electronic Instruments Inc, 80120 Table of sales and profits by
segment
Figure 27 Electronic Instruments Inc, 80/20 Chart of profitability by segment
Figure 28. Electronic Instruments Inc, result of 80/20 Analysis
Figure 29. Electronic Instruments Inc, strategic diagnosis
D on t t ak e 80/20 An al y si s t o si m p l i st i c
con cl u si on s
Figure 30. Electronic Instruments Inc, actions taken after all 80/20 Analyses
80/20 as a gu i d e t o t h e f u t u r ed ev el op i n g
y ou r f i r m i n t o a d i f f er en t an i m al
Con cl u si on
5
Si m p l e i s beau t i f u l com p l ex i s u gl y
Figure 31. The cost of complexity
Si m p l e i s beau t i f u l ex p l ai n s t h e
Con t r i bu t i on t o ov er h ead : on e of t h e
l am est ex cu ses f or i n act i on
Go f or t h e m ost si m p l e 20 p er cen t

Red u ci n g com p l ex i t y at Cor n i n g

The 50/ 5 Pr i nci pl e
M an ager s l ov e com p l ex i t y
Cost r ed u ct i on t h r ou gh si m p l i ci t y
Red u ci n g cost s u si n g t h e 80/20 Pr i n ci pl e
Figure 32. Causes of publishers typesetting overruns
Figure 33. 80/20 Chart of causes of publishers typesetting overruns
Con cl u si on : si m p l i ci t y p ow er
6
T h e 80/20 m ar k et i n g gosp el
Sel l i n g
T h e v i t al f ew cu st om er s
7
Figure 34. The Top 10 business applications of the 80/20 Principle

D eci si on t ak i n g an d an al y si s
I n v en t or y m an agem en t
Pr oj ect m an agem en t
N egot i at i on
H ow t o secu r e a p ay r ai se

B ey on d t h e T op 10
8
St op t h i n k i n g 50/50
Figure 36. How to act 80/20

On t o Par t T h r ee
and
9
B ecom e an 80/20 t h i n k er , st ar t i n g w i t h
y ou r ow n l i f e

80/20 T h i n k i n g i s r ef l ect i v e
80/20 T h i n k i n g i s u n con v en t i on al

80/20 T h i n k i n g i s h ed on i st i c
80/20 T h i n k i n g bel i ev es i n p r ogr ess
 80/20 T h i n k i n g i s st r at egi c

80/20 T h i n k i n g i s n on -l i n ear
80/20 T h i n k i n g com bi n es ex t r em e am bi t i on
w i t h a r el ax ed an d con f i d en t m an n er
80/20 i n si gh t s f or i n d i v i d u al s
T i m e i s w ai t i n g i n t h e w i n gs
10
T h e 80/20 Pr i n ci p l e an d t i m e r ev ol u t i on
T h e p oi n t i s n ot t o m an age y ou r t i m e
bet t er !
80/20 t i m e h er esy
T i m e i s t h e ben i gn l i n k bet w een t h e p ast ,
p r esen t an d f u t u r e
Figure 37. The time triad
A p r i m er f or t i m e r ev ol u t i on ar i es
F ou r i l l u st r at i on s of eccen t r i c an d ef f ect i v e
t i m e u se
 T h e T op 10 l ow -v al u e u ses of t i m e

T h e T op 10 h i gh est -v al u e u ses of t i m e
Figure 38. The Top 10 low-value uses of time

Figure 39. The Top 10 highest-value uses of time

I s a t i m e r ev ol u t i on f easi bl e?
11
St ar t w i t h l i f est y l e
Wh at abou t w or k ?
Figure 40. Desired career and lifestyle
Wh at abou t m on ey ?
Wh at el se d o y ou n eed t o h av e i t al l ?
12
Com p i l e y ou r T op 20 p er son al
r el at i on sh i p s ch ar t
T h e v i l l age t h eor y
Pr of essi on al r el at i on sh i p s an d al l i an ces
You n eed a f ew k ey al l i es

Ach i ev em en t al l i an ces
I f y ou ar e i n t h e ear l y st ages of y ou r car eer ,
f i l l y ou r al l y sl ot s car ef u l l y
M u l t i p l e al l i an ces
 Con cl u si on

A f or k i n t h e book
13
Figure 41. The Von Manstein matrix
I m bal an ce i s r am p an t i n p r of essi on al
su ccess an d r et u r n s
Source: Forbes

Figure 42. Superstar earnings for top professionals

 Ach i ev em en t h as al w ay s obey ed t h e

80/20 r et u r n s al so ap p l y t o n on -m ed i a
p r of essi on al s
Wh at d oes al l t h i s m ean f or t h e am bi t i ou s?
Figure 43. 10 golden rules for career success
 Su m m ar y

M u l t i p l y i n g m on ey
14

M on ey obey s t h e 80/20 Pr i n ci p l e
80/20 i n si gh t s i n t o m ak i n g m on ey
Figure 44. Kochs 10 commandments of investment
Con cl u si on
15
T w o w ay s t o be h ap p i er
B u t ar en t p eop l e p ow er l ess t o d eal w i t h
u n h ap p i n ess?
M ak i n g ou r sel v es h ap p y by st r en gt h en i n g
em ot i on al i n t el l i gen ce
M ak i n g ou r sel v es h ap p i er by ch an gi n g t h e
w ay w e t h i n k abou t ev en t s
M ak i n g ou r sel v es h ap p i er by ch an gi n g t h e
w ay w e t h i n k abou t ou r sel v es
M ak i n g ou r sel v es h ap p i er by
ch an gi n g ev en t s
D ai l y h ap p i n ess h abi t s
Figure 45. Seven daily happiness habits
M ed i u m -t er m st r at agem s f or h ap p i n ess
Figure 46. Seven short cuts to a happy life
Con cl u si on
16
Wh y soci et y sh ou l d ad op t t h e
Is the i n h er en t l y r i gh t w i n g?
I s t h er e a l ef t -w i n g i n t er p r et at i on of t h e
T h e 80/20 Pr i n ci p l e asser t s t h e p ot en t i al f or
t er r i f i c p r ogr ess
T ak e r esp on si bi l i t y f or p r ogr ess
Ch ap t er 1
Ch ap t er 2
Ch ap t er 3
Ch ap t er 5
Ch ap t er 6
Ch ap t er 7
Ch ap t er 9

Ch ap t er 10
Ch ap t er 12
Ch ap t er 13
Ch ap t er 14

Ch ap t er 15
Ch ap t er 16