The 80/20 Principle: The Secret of Achieving More With Less Read Online Free
Author: Richard Koch
Tags: Psychology, Self-Help, Non-Fiction, Philosophy, Business
held in the Middle Ages. The machine-based view converted God from being an irrational and unpredictable force into a more user-friendly clockmaker-engineer.
The view of the world held from the seventeenth century and still prevalent today, except in advanced scientific circles, was immensely comforting and useful. All phenomena were reduced to regular, predictable, linear relationships. For example, a causes b, b causes c, and a + c cause d. This worldview enabled any individual part of the universe—the operation of the human heart, for example, or of any individual market—to be analyzed separately, because the whole was the sum of the parts and vice versa.
But in the second half of the twentieth century it seems much more accurate to view the world as an evolving organism where the whole system is more than the sum of its parts, and where relationships between the parts are nonlinear. Causes are difficult to pin down, there are complex interdependencies between causes, and causes and effects are blurred. The snag with linear thinking is that it doesn’t always work, it is an oversimplification of reality. Equilibrium is illusory or fleeting. The universe is wonky.
Yet chaos theory, despite its name, does not say that everything is a hopeless and incomprehensible mess. Rather, there is a self-organizing logic lurking behind the disorder, a predictable nonlinearity —something which economist Paul Krugman has called “spooky,” “eerie,” and “terrifyingly exact.” 9 The logic is more difficult to describe than to detect and is not totally dissimilar to the recurrence of a theme in a piece of music. Certain characteristic patterns recur, but with infinite and unpredictable variety.
Chaos theory and the 80/20 Principle illuminate each other
What have chaos theory and related scientific concepts got to do with the 80/20 Principle? Although no one else appears to have made the link, I think the answer is: a great deal.
The principle of imbalance
The common thread between chaos theory and the 80/20 Principle is the issue of balance —or, more precisely, imbalance. Both chaos theory and the 80/20 Principle assert (with a great deal of empirical backing) that the universe is unbalanced. They both say that the world is not linear; cause and effect are rarely linked in an equal way. Both also place great store by self-organization: some forces are always more forceful than others and will try to grab more than their fair share of resources. Chaos theory helps to explain why and how this imbalance happens by tracing a number of developments over time.
The universe is not a straight line
The 80/20 Principle, like chaos theory, is based around the idea of nonlinearity. A great deal of what happens is unimportant and can be disregarded. Yet there are always a few forces that have an influence way beyond their numbers. These are the forces that must be identified and watched. If they are forces for good, we should multiply them. If they are forces we don’t like, we need to think very carefully about how to neutralize them. The 80/20 Principle supplies a very powerful empirical test of nonlinearity in any system: we can ask, do 20 percent of causes lead to 80 percent of results? Is 80 percent of any phenomenon associated with only 20 percent of a related phenomenon? This is a useful method to flush out nonlinearity, but it is even more useful because it directs us to identifying the unusually powerful forces at work.
Feedback loops distort and disturb balance
The 80/20 Principle is also consistent with, and can be explained by, reference to the feedback loops identified by chaos theory, whereby small initial influences can become greatly multiplied and produce highly unexpected results, which nevertheless can be explained in retrospect. In the absence of feedback loops, the natural distribution of phenomena would be 50/50—inputs of a given frequency would lead to commensurate results. It is only
The view of the world held from the seventeenth century and still prevalent today, except in advanced scientific circles, was immensely comforting and useful. All phenomena were reduced to regular, predictable, linear relationships. For example, a causes b, b causes c, and a + c cause d. This worldview enabled any individual part of the universe—the operation of the human heart, for example, or of any individual market—to be analyzed separately, because the whole was the sum of the parts and vice versa.
But in the second half of the twentieth century it seems much more accurate to view the world as an evolving organism where the whole system is more than the sum of its parts, and where relationships between the parts are nonlinear. Causes are difficult to pin down, there are complex interdependencies between causes, and causes and effects are blurred. The snag with linear thinking is that it doesn’t always work, it is an oversimplification of reality. Equilibrium is illusory or fleeting. The universe is wonky.
Yet chaos theory, despite its name, does not say that everything is a hopeless and incomprehensible mess. Rather, there is a self-organizing logic lurking behind the disorder, a predictable nonlinearity —something which economist Paul Krugman has called “spooky,” “eerie,” and “terrifyingly exact.” 9 The logic is more difficult to describe than to detect and is not totally dissimilar to the recurrence of a theme in a piece of music. Certain characteristic patterns recur, but with infinite and unpredictable variety.
Chaos theory and the 80/20 Principle illuminate each other
What have chaos theory and related scientific concepts got to do with the 80/20 Principle? Although no one else appears to have made the link, I think the answer is: a great deal.
The principle of imbalance
The common thread between chaos theory and the 80/20 Principle is the issue of balance —or, more precisely, imbalance. Both chaos theory and the 80/20 Principle assert (with a great deal of empirical backing) that the universe is unbalanced. They both say that the world is not linear; cause and effect are rarely linked in an equal way. Both also place great store by self-organization: some forces are always more forceful than others and will try to grab more than their fair share of resources. Chaos theory helps to explain why and how this imbalance happens by tracing a number of developments over time.
The universe is not a straight line
The 80/20 Principle, like chaos theory, is based around the idea of nonlinearity. A great deal of what happens is unimportant and can be disregarded. Yet there are always a few forces that have an influence way beyond their numbers. These are the forces that must be identified and watched. If they are forces for good, we should multiply them. If they are forces we don’t like, we need to think very carefully about how to neutralize them. The 80/20 Principle supplies a very powerful empirical test of nonlinearity in any system: we can ask, do 20 percent of causes lead to 80 percent of results? Is 80 percent of any phenomenon associated with only 20 percent of a related phenomenon? This is a useful method to flush out nonlinearity, but it is even more useful because it directs us to identifying the unusually powerful forces at work.
Feedback loops distort and disturb balance
The 80/20 Principle is also consistent with, and can be explained by, reference to the feedback loops identified by chaos theory, whereby small initial influences can become greatly multiplied and produce highly unexpected results, which nevertheless can be explained in retrospect. In the absence of feedback loops, the natural distribution of phenomena would be 50/50—inputs of a given frequency would lead to commensurate results. It is only
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