Introducing 80:20
Today, approximately 80% of the world’s
people live in the underdeveloped world.
This contrasts with 70% in 1950, 75% in
1980 and a projected 84% by the year
2025.
… in 1960, the richest 20% of the world’s
people shared between them 70% of the
entire wealth of the planet. By the year
2000, this figure had increased to over 84%
An Italian economist Vilfredo Pareto had forwarded the concept in 1897. The Principle of 80/20 is a study of distribution of wealth and the unbalanced patterns of wealth and income. Pareto found the pattern prevalent in the 19th-century England and further studies revealed the same for every country and time period he studied. Over the years, this observation has known as the Pareto’s Principle of 80/20. The Principle shows how you can achieve much more with much less effort, time, and resources, simply by concentrating on the all-important 20 percent.
The two most difficult things to get people to do are to think and to do things in order of importance. So, how do you get to focus on this? Everywhere, employees are fired but the job continues to remain and those employed learn to focus on it trying to achieve their best. This is deemed as the 80 percent solution, which basically says 20% of priorities will give 80% of production. If you spend your time, energy, money and personnel on the top 20% of your priorities, then result is four-fold return in productivity.
This seems little confusing. Right? Here are some examples: The concept simply tries to convey that, 20% of our time produces 80% of the results. 20% of the products bring in 80% of the profit. 20% of a book contains 80% of the content. 20% of our work gives us 80% of our satisfaction. 20% of an article gives 80% of the impact. 20% of the people give 80% of the money. 20% of the people will eat 80% of the food! Similarly, 20 percent of customers account for 80 percent of revenues. What do you say?
But, it also means that 20% of your life is spent on trying to manage 80% of it. And, 80% of your energy is spent on achieving 20% outcome - be it love or any other pursuits.
It is just that the concept is - it’s not how hard you work, it’s how smart you work. And it’s your choice: either organise or agonise! Choose or lose. Evaluate or stalemate. And, even here the Principle of 80/20 is at work.
In 1998, another economist Richard Koch took a fresh look at the Principle of 80/20 and found that the basic imbalance observed 100 years ago by Pareto can be found in almost every aspect even today. Whether you’re investing your money, analysing sales, or trying to figure out the speed and performance of a Web site, you still find it’s usually 20 percent that produces 80 percent of the total result. This means, 80 percent of what you do may not count for much. The theory helps to identify that 20 percent and shows how one can get more out of business, and life, for less.
This predictable imbalance between inputs and outputs (80/20 vice versa) are inherently right wing, and the socialist may find it hard to accept. The Principle—that 80 percent of results flow from just 20 percent of our efforts—is one of the greatest secrets of highly effective people and organisations. It is an idea most original, provocative, and powerful.
So by concentrating 20%, we can transform our effectiveness in our jobs, our careers, our businesses, and our lives and achieve 80% success. If all were to learn to tap the hidden potential of the 80/20 principle in life, to unlock the enormous potential of the magic 20 percent, the 80/20 Principle will revolutionise our life.
HHH thought:
Konsep ini saya pelajari untuk tujuan teknik 'pengurangan kos', 'penambahan nilai produk', meningkatkan produktiviti serta banyak lagi.
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