The 80/20 Principle

Business essay #7

The 80/20 Principle, also known as the Pareto Principle, is the theory that 20% of the causes are responsible for 80% of the effects. For example 20% of the customers of a business provide 80% of the profits, also 20% of the population has 80% of the wealth. The book The Breakthrough Principle Of 16x is about how to use the Pareto Principle to achieve greater results for less effort.

The Breakthrough Principle Of 16x follows the 20/80 principle as well so lets look at what 20% of the book had 80% of the information. The book has 10 parts; eight chapters, an introduction and an endnote. So we will look at the most useful 2 sections of the book.

The first section that is most important is chapter two The Amazing Math of 16x. The reason  this chapter is so useful is because it really shows the power of the 20/80 principle. In business the one of the 20% of big customers give 16 times the profit for the same amount work as a smaller costumer. This chapter really got across that you need to figure out what the most productive 20% of the stuff you do is and then focus on that.

The other important section of the book is the endnote. The reason it is the best part of the book is that it is really just a summary of the whole book. It has almost all the information in the whole book right there in a few pages.

Those two sections are the most important 20% of the whole book and I think that they contain at least 80% of the useful information.



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