Leverage Tool:
80/20 Thinking
Used for
- Hypothesize which 20% of inputs produce 80% of output or success
- Getting a quick idea of potential strong causes and effects
- Quickly producing a hypothesis that can be tested in practice
Strength
3
/ 5
Versatility
5
/ 5
Difficulty
2
/ 5
What?
Hypothesize which inputs or actions may give 80% of results
Why?
Hypothesizing, with 80/20 thinking, is quicker and often right
How?
Think the situation through quickly and form a hypothesis
“80/20 Thinking is too valuable to be confined to causes where data and analysis are perfect. For every ounce of insight generated quantitatively, there must be many pounds of insight arrived at intuitively and impressionistically.”
Richard Koch
–
Bestselling author and billionaire investor
What it is?
"80/20 Thinking" is a strategy based on the Pareto Principle, where you hypothesize the 20% of factors or actions that yield 80% of the results. It's about qualified guesswork instead of strict analysis.
Why use it?
Using the 80/20 thinking helps in quickly prioritizing efforts, time, and resources on what truly matters. It is effective for increasing efficiency, reducing waste, and achieving more with less. By identifying and concentrating on these pivotal 20% of activities or causes, one can dramatically improve productivity and effectiveness.
How to use it?
- Analyze: Look at your activities, decisions, or data to identify where the most significant outcomes are coming from. This might involve reviewing business data, personal productivity, or any area where you seek improvement.
- Prioritize: Once you've identified the 20% that matters, focus your time, resources, and energy there. This could mean spending more time on high-value clients, key projects, or personal skills that give you the most satisfaction or success.
- Simplify and Eliminate: Reduce or eliminate the less productive 80% of your efforts. This might mean saying no to low-impact tasks, cutting down on meetings that don't contribute to significant outcomes, or decluttering your personal or professional life.