The secret in simple terms as per Richard Koch ~~
“Do more of what makes best use of time and money.”
You have probably observed that often the majority of output stem from the minority of input. It could happen in your business when the majority of sales come from a little subset of your products. Often this ratio is around, but not limited to 20% and 80%.
People expect life to be fair and balanced, but it’s not. That’s why it’s called the 80/20 rule or principle. Aka the Pareto principle, the law of the vital few, or the principle of factor sparsity.
“The 80/20 Principle tells us that, at any one point, a majority of any phenomenon will be explained or caused by a minority of the actors participating in the phenomenon, Eighty percent of the results come from the 20 percent of the causes, A few things are important, most are not.” ~~ Richard Koch
Taken literally, this means that, for example, 80 per cent of what you achieve in your job comes from 20 per cent of the time spent. Thus for all practical purposes, four-fifths of the effort—a dominant part of it—is largely irrelevant. This is contrary to what people normally expect. So the 80/20 Principle states that there is an inbuilt imbalance between causes and results, inputs and outputs, and effort and reward. A good benchmark for this imbalance is provided by the 80/20 relationship: a typical pattern will show that 80 per cent of outputs result from 20 per cent of inputs; that 80 per cent of consequences flow from 20 per cent of causes; or that 80 per cent of results come from 20 per cent of effort.
“The way to create something great is to create something simple.” ― Richard Koch
“Strive for excellence in few things, rather than good performance in many.” — Richard Koch
Source : “The 80/20 Principle: The Secret to Achieving More with Less” — Richard Koch