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Turning Point

Split Ends

A little effort goes a long way.

By Debra Phillips

Maybe you know the theory. Maybe you don't. For those who don't, we'll explain that the 80/20 Principle centers around the idea that less is, well, more. Specifically, this means 80 percent of results stem from only 20 percent of efforts. How could this be? Author Richard Koch conducts a thorough analysis in The 80/20 Principle: The Secret Of Achieving More With Less (Doubleday, $25 cloth).

According to Koch, the 80/20 split holds up in the business arena--where, he writes, a mere 20 percent of customers account for roughly 80 percent of sales. Factor in a similar imbalance between the number of products you have and your corresponding sales, and you begin to understand what a difference a little more effort could make--if it's strategically applied.

For a 100-year-old theory, the 80/20 Principle holds surprising relevance today.

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This article was originally published in the April 1998 print edition of Entrepreneur with the headline: Turning Point.

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