Use The 80/20 Principle
The 80/20 is also known as “The Pareto Principle” or “The Law of the Vital Few” — referring to the vital few factors that contribute to the majority of the outcome.
So, what is the 80/20 Principle?
Imagine you are the CEO of a company and you have a salesforce. In a world where everything is equal, you will assume that everyone contributes to your sales proportionately — i.e., 20% of the employees contribute to 20% of the sales, 50% contribute to 50% of the sales, and 80% of the employees contribute to 80% of the sales. But what if instead of a 1-1 relationship, you find out that 80% of your sales are actually contributed by 20% of your staff?
What the 80-20 Principle is About
This is what the 80/20 rule is about — 80% of the effects in a situation come from 20% of the causes. This phenomenon was first discovered by Vilfredo Pareto, an Italian Economist who found that 20% of the people in Italy control 80% of the wealth and land. He first observed the principle when gardening and noticing that 20% of his peapods in his garden yielded 80% of the total harvested peas.
Examples of 80/20 in Action
Here are just some of many situations where the 80/20 rule can be observed:
- Population: 80% of the population in England (25.8 million out of 32.3 million) comes from 20% of its cities (53 out of 263 cities).
- Resource Consumption: 70% of the world’s energy, 75% of its metals, and 85% of its timber are consumed by 20% of the world’s countries (which have far fewer than 20 percent of the world’s population).
…. and so on.
Applying 80/20 Principle in Our Life
The 80/20 rule tells us that a large proportion of effects is due to a small portion of causes.
- 20% of causes lead to 80% of results. These are what I call the 20% high-impact-tasks. High-value because they lead to high-impact results.
- On the other hand, 80% of causes lead to 20% of results. These are what I call the 80% low-impact-tasks.
It doesn’t have to be a literal 80-20 ratio — for example, 70% of the effects can be contributed by 15% of the causes, or 60% of effects can be contributed by 30% of the causes. The percentages of effects and causes don’t have to add up to 100% either — 80% refers to the effect while 20% refers to the cause, meaning they are not of the same denominator. It just happened that Pareto’s observation was 80-20 (rather than 70-20 or 60-10).
The point of the 80/20 rule is to know that (a) the relationship between cause and effect is often not 1:1, and (b) some causes have more weight than others.
Read more about the 80/20 rule by clicking on the link below.
Article by Celes. Source: The 80/20 Rule: How To Achieve More With Less In Life – Personal Excellence