Summary: The 80/20 Principle Richard Koch

Managers love complexity because it makes their jobs appear more valuable and intellectually stimulating.

Cultivate just a few close friendships with positive, happy people.

To achieve personal success, actively seek ways to build in these personal habits:
Daily physical exercise. The endorphins naturally manufactured during exercise will be far more exhilarating than any other alternatives - natural or man-made.

The key areas in which 80/20 thinking can be applied in personal lives are:
Time management
Setting personal goals
Forming personal and professional friendships
Making career choices
Making more money
Developing the personal habits of success

80/20 thinking combines personal ambition with a structured, intelligent approach rather than trying to be everything to everyone.

Concentrate on improving the high performing product lines. Be marketing-led in this area.

Simplify the project so that team members can focus on the 20-percent of activities that will generate 80-percent of the overall value.

Once that 80-percent value threshold has been achieved, evaluate whether the time spent attaining the remaining 20-percent added value is worth it. If not, end the project at that point.
Allocate more time to detailed planning than to execution. You’ll find that 80-percent of the problems will arise in the design phase, and they will be easier to correct sooner rather than later.
Keep in mind 20-percent of the problems will cause 80-percent of the cost overruns.

Focus every available resource on expanding what those products are doing right. Don’t worry about trying to improve the poor performers - they don’t matter much anyway. Concentrate on improving the high performing product lines. Be marketing-led in this area.

The natural tendency is for products to become too complex over time as incremental features are added. Eventually, most products become more inefficient at performing their primary role for the sake of versatility in performing a number of roles. Yet, versatility does not always add value from a customer perspective, and often detracts value rather than adding it.

You can also use 80/20 principles to come at cost reduction issues from a different angle. If you intuitively accept that only a minority of your product’s or service’s features will be useful from a customer perspective, you can take the time to measure and compare which features deliver the greatest value. Armed with this knowledge, you can then creatively develop ways to provide enhanced features in just those areas for the same total cost of your product at present. In this approach, your costs remain the same but the perceived value is increased