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Book review: Living the 80/20 Way

Pareto Was a Limist

You can have much more quality-of-life by cutting out the inessentials. Just apply one of the most powerful patterns in Nature: the Pareto principle, also called the 80/20 rule, or the vital few and the trivial many.1

In life and nature, we frequently observe highly uneven outcomes, wherein 20% or less of causes produce 80% or more of the results and effects. And often, the ratio between cause and effect is far more extreme. This lopsided pattern is pervasive, yet its impact is seldom deliberately used by individuals. If you find it surprising (I did and still do), it's because we humans are linear thinkers2 and strongly conditioned to equate cause and effect. But if life's causes and effects are unavoidably unequal, how do we use that pattern to our advantage? Let's find out.

Why You Want to Be a LIMist Too

In his upbeat and concise book Living the 80/20 Way (hereafter, "the book"), Richard Koch, a successful entrepreneur, will convince you Less really Is More. And the sooner we recognize that and apply it to our lives, the happier, more productive, and more fulfilled we'll be.

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To jump to Koch's conclusion first (all emphases added):

We have seen that more with less is the principle behind marvelous achievements in business, economics, science, and technology. The watchwords of success are focus, selectivity, and innovation.

The 80/20 Way translates the same principle to our individual lives. We don’t have to accept the current fad — surely one that will seem bizarre and ridiculous to observers a few decades ahead — for more with more. More with more is stupid. It wastes human potential. It insults human intelligence and ingenuity. It flunks any objective test of social progress. More with more is just a wet dream for misguided yuppies.

Our lives are most enjoyable and valuable when we are driven by the few things that excite us. If we are not excited, nothing is of any use. If we are not ourselves, little will come of our lives. If we are excited and ourselves, however, there is no limit to our happiness or achievement.

The vision behind the 80/20 Way is a world where we are all individuals, responsible for ourselves, discovering and enjoying our unique place in the universe, leaving behind fond memories, happy children, or some enhancement of art, science, literature, or service to other people.

Living the 80/20 Way, Ch.10

Most excellent. So what do you need to do?

First - Convince Yourself that Less Really Is More

See and shed your opposing preconceptions. Why would we believe More is More? In the book, Koch doesn't spend much space on that question, but I'll share some observations that helped expose this harmful belief:

  • Early conditioning in school: Most classes, teachers, and systems value quantity over quality, from kindergarten right through high school, and beyond. Sheer quantity of output - in writing, reports, paper mache, answering questions - often gets high marks. But in college - if we're lucky - smarter (or better trained) teachers no longer value lengthy fluff. One of the best teachers I ever had limited our weekly writing assignment to 250 words maximum on 1 page, whether discussing Darwin or the Enlightenment.3 Unfortunately, many workplaces and schoolrooms still value effort and quantity, over results and quality, especially as it takes more skill to recognize quality. e.g. in the consulting world, the thicker the final report is, the bigger its "thud factor" and supposed credibility; in academia, the most important papers are often thin, short, and stunningly original; nevertheless, most academics aim at churning out the largest quantity of papers and aren't known for economy of words.
  • Inherent linear thinking: Humans are good at linear thinking and extrapolation; exponentials, not so much. Everyone can do 3 + 3. 3 raised to the power 3 isn't as immediately grasped. Yet as any scientist will tell you, nonlinear systems and effects are the norm in nature.
  • Incessant and ubiquitous propaganda/advertising: Consumer capitalism and our debt-based monetary system require infinite growth to avoid collapse; more of more, all the time, constantly promoted as increasing happiness and self-esteem. And if you're reading this, you're probably infected with this mental virus. In North America, this materialism drives people in the largest homes on Earth (on average) to accumulate so many things that a booming business of renting out storage space exists. If you don't see the irony there, you're really in deep. :)
  • Calvinism and other traditions: Major religions and traditions (e.g. Confucianism) advocate working hard far more often than working smart. In times when over 90% of the populace worked in agriculture, that idea had some merit, as being lazy risked starvation. But now, science, technology, and civilization advance by producing more output with less inputs.

Those are the deeply rooted starting beliefs and perspectives we need to shed, cut, and discard. Seeing broad, persistent Pareto patterns can help us do so:

  • In any given profession, the top 20% out-produce the bottom 80%, sometimes by an order of magnitude. Since everyone has the same 24 hours per day, it follows the best performers use their time differently. For example:
    • Good programmers - as astute managers of such know - outproduce sub-par programmers by 10:1 or more.
    • Writing - many people write for a living to various degress, but well under 20% of writers get read by anything close to 80% of readers. From school to professional writers, the gaps of quality, income, and significance are very wide.
    • Sales - while I don't have direct experience in the field, it's well known that the top 10-20% salespeople out-earn the rest by at least 4x.
    • When was the last time you were impressed by a lawyer, doctor, or MBA, assuming you've encountered a few? Despite extensive training, mediocrity is the rule.

Moving a bit further out in our world, people and physical resources are naturally concentrated. Koch's examples (mainly in Ch.1) include:

  • The largest 53 cities in England had 25,793,036 people living there; the next largest 210 cities or towns had 6,539,772, i.e. 20.2 percent of the cities have 79.8 percent of the people. Concentrations of people, knowledge, wealth, and opportunities are inevitable.
  • Out of 6,700 languages, just 100 — the top 1.5% — are used by 90% of the world’s people.
  • 20% of countries with much less than 20% of the world's population, consume 70% of its energy, 75% of its metals, and 85% of its timber.
  • More than 80% of food comes from far less than 20% of land. Also, fruit typically accounts for much less than 20% of the mass or weight of a tree or vine. Likewise, the ratio of grain and grass to meat is far more extreme and inefficient.
  • Less than 1% of species that have ever lived on earth constitute 100% of the species now living, biologist Richard Dawkins estimates. You're one of them.

The Pareto principle and LIM is recognized in fiction too: A little gold ring carried by a certain hobbit had one helluva effect on everyone and everything in a certain story.

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Thus, while most causes have little effect, a few shape our lives and the story of the entire planet. Equality of cause and effect is not the norm, but the exception. Now let's figure out the 20% that will yield 80% of the good outcomes we want.

Second - Apply LIM to Your Life and Reap the Benefits

As Koch and others have observed, Less Is More (and More With Less) is the driving principle of progress - certainly of material progress, and arguably for mental and spiritual progress:

All human history, all progress in civilization, involves getting more with less…Every material advance of humanity — in science, in technology, in living standards, in housing, in food, in health and long life, in leisure, in transport, in everything that makes modern life so much richer and more fun than before — gives more with less.

Living the 80/20 Way, Ch.2

Yet as successful as that pattern has proven, getting more with less is not yet how most of us live our personal, social, and professional lives. To do so, we need to focus:

  • Focus our own time and energy: At any moment, choosing one area to excel in is vital not only for accomplishing something, but to enter the mental state of flow and feeling fulfilled. That's especially so with creative work, which paradoxically requires that many choices be removed and constraints clarified. Freedom of being doesn't entail the freedom of many choices.
  • Focus our social commitments: Few people would boast of having few friends. Yet having 500+ friends on Facebook never makes up for having one you can really talk to. Close friendships take time, and thus very few of our friends are close friends - someone you could call any time to discuss anything, to ask a significant favor of, or speak truthfully with, without pretense or reserve.
  • Focus our skills development: Children are often told they can be and do anything, instead of finding and encouraging their particular talents and focusing on activities which require and build those talents. Later in life and in the workplace, how often are we told to fix our weaknesses instead of building our strengths? Small wonder many well-schooled people take jobs they barely tolerate for 4 decades until retirement kills them shortly afterwards.

Pareto Time Usage

In the book, after having described the 80/20 principle and LIM, Koch starts with looking at time, the most fundamental resource. Here too, it must be the case that most of your happiness and achievements comes from a relatively small portion of your time.

If you're a workaholic, this may be hard to swallow: after all, surely someone who works 12+ hours per day gets more done than someone who only works 8? Well, note the desired outcomes: happiness, and achievement. Not the score of sheer number of hours worked.

Speaking just for the domains I know - writing, coding, research, analysis, and planning - unquestionably some periods are more productive than others, and working on the wrong or tangential issues can waste enormous amounts of time. Furthermore, some of the best ideas come when one is cooking, brushing teeth, showering, etc. In another highly competitive domain, trading, over-activity is the death of many accounts, and most individual traders fail to use one of their single largest advantages compared to institutional traders: choosing not to trade 4.

Koch advises you should find your achievement and happiness "islands" - the times and contexts when you get the most done:

Achievement islands are the small time periods when you are your most productive or creative: when you get more with less, accomplishing the most with little apparent effort in very little time. What are yours?

Do they have things in common? Do they happen at the same time of day? Are the activities similar, such as selling, writing, or making decisions? Do they happen in a special place, with particular colleagues, or after the same event or stimulation? What mood are you in? In a group or alone? Rushed or relaxed? Talking, listening, or thinking?

How could you multiply time on your achievement islands and reduce time on everything else?

Living the 80/20 Way, Ch.3

The same approach applies to finding happiness islands - first eliminate useless time sinks like watching TV. Then, note the times and contexts when you were most happy. Hint: it probably involved other people, family, and friends.

Koch's most radical concept here is that far from having too little time, consider that you have too much of it - thus much is wasted on frivolous activities, like keeping busy. He calls this perspective time revolution, as opposed to the usual idea of time management. Once you know your achievement and happiness islands, there's plenty of time left over.

Time revolution is something I'm still trying on; I enjoy the "work" that I do and often aim to work long contiguous hours, but certainly I'm not equally productive throughout the day. So perhaps my persistent effort to make mediocre times productive is simply unnecessary and self-defeating, and better spent relaxing. How about you?

Your Life: The Big Questions

Clarity around some big questions and choices makes life simpler, if not necessarily easier. As Koch offers in Chapter 4, addressing these big questions quickly eliminates the inessential from your life and puts you on your unique, individual path.

Determine who you are

  • Who, and what, do you care most about?
  • What kind of person are you? Who do you want to become?
  • What are your strongest qualities, emotions, and abilities?
  • What are you putting energy into that isn’t essential for your happiness?

Determine your life contribution

  • Do you want to make a name for yourself? For what?
  • Do you want to work for someone else, or for yourself on your own terms? At what?
  • Do you want to create something that other people will notice and enjoy?

Determine who you want to travel life with

  • Do you want to commit to one life partner? Who?
  • Do you want to raise children?
  • Who do you want to work with?

Who Are You? Focus On Your Top 20%

Focus is the secret of all personal power, happiness, and success. Focus means doing less; being less. Focus makes less more. Few people focus, yet focus is easy. Focus expands individuality, the essence of being human.

Living the 80/20 Way, Ch.4

No one past the mental age of say, 20, believes they're good at everything. But do you know what your particular talents are, and are you focusing on them almost exclusively? If not, Koch provides some very useful tables to quickly map out who you are by what you do well. For both tables below, place a dot where you find yourself, possibly asking friends for feedback, and then note where you have extreme strength - very high "Olympian" levels - of a skill or attribute. Your 80/20 life destination will involve those.

Your Skills and Interests

Skill/InterestLowMediumHighOlympian
Academic intelligence
Analysis
Art
Broadcasting
Cooking
Communications
Computers/IT
Economics
Engineering
Entertainment
Gambling
Hospitality
Literature
Management
Movies/Theater
Music
Numerical skills
Raising children
Science
Sport
Starting businesses
Teaching
Understanding people
Verbal skills

Your Emotions and Attributes

Emotion/AttributeLowMediumHighOlympian
Ability to evoke enthusiasm
Ability to love and be loved
Appreciation of beauty
Calmness and self-control
Concern for community
Creativity
Curiosity
Emotional intelligence
Fairness
Forgiveness
Honesty and integrity
Humility
Humor
Inspiring leadership
Kindness
Optimism
Perseverance
Spirituality
Teamwork
Being trusted
Zest for life

With deeper self-knowledge, write out a life path and destination that excites you: a brief description of who you are, what you'll contribute, who you'll share it with, where it will happen, and a path to this personal utopia that draws upon and focuses you. That's the high-level description; Koch has examples in Chapter 4 of the book, but I think you'll get better advice by talking with those who know you well, personally and professionally.

In particular, you need to have some work experience so you know yourself on the career side. But even younger readers may find it a useful exercise - any answers you come up with are just more provisional. (Better yet, young readers can and should take their raw strengths and talents and pour them into their own venture, whether traditional or social entrepreneurship; your inexperience is outweighed by your energy and freedom to experiment, i.e. with no mortgage, no kids, and no expectations you've got nothing to lose and much to gain.)

LIM at Work

Our work makes up a huge portion of our life, easily more than half our waking hours (9-5 is 8 hours, you need to eat, you'll often need to commute, and you should be getting 8 hours sleep). So it follows we need to be effective at and with our work. In Chapter 5 of the book, Koch again calls for more results with less strain:

Make a great mental leap: dissociate effort from reward. Focus on the outcomes that you want and find the easiest way to them with least effort, least sacrifice, and most pleasure. Concentrate on what produces extraordinary results without extraordinary effort. Be efficient but relaxed. First, think results. Then get them with least energy.

Living the 80/20 Way, Ch.4

In particular, he offers some provocative, challenging questions to consider which I'll paraphrase:

  • The top 20% in your field/industry garner 80% or more of the results, money, and recognition. Who are they and what do they do differently?
  • Most of your value to others will come from 20% of what you actually do daily, monthly, and yearly - thus, what are your most vital, valuable activities?
  • Most of your success (80% and up) will develop from 20% (possibly much less) of all the skills and knowledge you have (and probably paid a lot of money for). What do you do far better with less effort than others?
  • Most (yup, 80%+) of your achievements are realized in just a few (yup, under 20%) of the contexts that you are in; we all have places, times, ways, and colleagues/friends where we are far more productive, useful, and even charismatic and inspiring. Where, when, with who, and why are those super-contexts so?
  • What are your 80/20 tactics and behavior, the few things you do that deliver disproportionately large results?
  • For anything you want to achieve and produce, assume that there's one path to it that's superior in efficiency and ease, that can give you 80% of the desired outcome with a fraction of the effort seemingly needed. Keep that assumption in mind and keep looking for that "golden path."

Want to be super-successful? Koch states such people have the following six attributes:

  1. Ambitious
  2. Love what they do, thus it feels like play, not "work"
  3. Focus on their strengths and talents, not their weaknesses
  4. Know a lot about a narrow area, i.e. are specialists
  5. Think and communicate clearly
  6. Found and evolved their own success formula

Maybe you don't agree that a super-successful person always shows all 6 attributes, but I wager the mantra of "focus on strengths to enjoy life" is universal to high performance and achievement.

LIM Relationships

As you can guess by now, having more and more relationships (public and private) necessarily diminishes the time and energy we have for every relationship. So here again in this vital aspect of our lives, we need to see Less Is More, and attain More With Less. Starting with ourselves - since that's where change is simplest - Koch proposes four core skills for success in all relationships:

  1. Being able to get close to other people, depend on them, and have them depend on you. Here we can ask ourselves first: are we secure (no problems with intimacy and trust), insecure/avoidant (when care is needed, run away), or anxious (uncertain of love, exhibit compulsive behavior)?
  2. Being optimistic - whether we expect the best or the worst, we're probably right.
  3. Ability to avoid harsh argument and criticism of partner - focus on solving problems over being right. Often easier said than done, of course.
  4. Agreement on basic values - otherwise, why be in this romance, friendship, or business relationship?

What are our most important relationships? Family and friends. Koch offers that there are a few key 80/20 practices for happy families and close friendships:

  • Happy families practice "love spirals" - that means showing affection, patience, and generosity again and again in small acts, continuously building up the strength of the family so that inevitable difficulties are borne well, instead of being straws that break the camel's back.
  • Happy families give more positive than negative feedback - Koch doesn't cite the source, but it's been found that praising good work and good behavior, and ignoring (not blaming) bad behavior soon caused the bad behavior to vanish.
  • The parents of happy families are always available and generous with their time - as Koch notes, the 80/20 way is to give more to fewer people. Also, Koch notes that if you can't be available to your kids, you should be absent - parents who are in sight but too busy to care are worse than parents who are simply not there.
  • Happy families have united and loving parents - again, unquestionably true, and I doubt anyone would wish that their parents quarreled more.
  • Happy families impose discipline but never withdraw love - no sources for this assertion, but certainly seems logical. It's the job of parents to set limits as clearly as possible. While temporarily withdrawing privileges can work, withdrawing affection/love does not.
  • Happy families share bedtime stories and "best moments" - many historical figures5 have advised sending children to sleep with fables and stories - as a simple, inexpensive (time and money-wise) tool of family bonding that also boosts long-term creativity and psychological health.

Against this small set of working principles for happy families, there are lots and lots of ways to screw things up, far too many to list. So just follow Tolstoy's advice.6

As for the vital friendships in our lives, our closest friends: think of whose death outside of family would leave you devastated. Then make an effort to spend time with them, including moving closer to the same city. Life's short, and even shorter without old friends.

80/20 Habits

One more bit of utility to leave you with: Certain habits, repeated over a lifetime, deliver disproportionate rewards. In Ch.2, the book suggests many of the following daily habits:

  • Get up early: spend the first quiet hours working on your true long-term priorities, improve health, feel prepared for the day.
  • Prioritizing: choose what's important to do every day, and stop being driven by outside events and people.
  • Meditation: increase your own inner clarity, solve problems.
  • Exercise: boosts your health, attractiveness, self-esteem.
  • Learning: maintain and enhance your mental agility and sharpness.
  • Altruism: doing one selfless act per day boosts your own happiness.
  • Nurturing: doing something for loved ones strengthens the relationship.
  • Gratitude: giving thanks makes everyone feel good.
  • Generosity: also makes everyone feel good.
  • Relaxation: setting aside regular downtime will likely boost your creativity. As Koch notes, this means no email, no cellphone, no pager, no distractions.
  • Never lying: keep life simple, cut anxiety, and build your reputation.
  • Never worry: either take action or take no action; worrying is useless.
  • Seek LIM in everything: always ask yourself how to get more with less, and you will do so.

Apply LIM and More-With-Less, Now

Try applying any of the above suggestions and guidance immediately, and see what impact it has. Aim for more results with less effort, in all the important areas of your life: work, love, and play. And please post your comments and experiences below, to share an idea whose time has clearly come. Thanks!

Footnotes:

1 See http://en.wikipedia.org/wiki/Pareto_principle

2 If on day 1 a pond has one lilly in it, and 2 on day 2, doubling in number every day such that the entire pond is covered by lillies in 30 days, on which day was the pond half-covered?

3 Dr. Peter Henderson - thank you forever for caring enough to eliminate useless words.

4 See Alexander Elder's book, Trading for a Living, for more such insights. Another finance example: Warren Buffet has often noted his own choice of inactivity borders on "lethargy," taking the time to make only the most important decisions.

5 "If you want your children to be intelligent, read them fairy tales. If you want them to be more intelligent, read them more fairy tales." - Albert Einstein. See also http://www.surlalunefairytales.com/introduction/quotes.html

6 "All happy families are alike, but each unhappy family is unhappy in its own way." - Anna Karenina

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