The 80/20 Principle

With some creativity, you can apply it to different aspects of your life

In my very first column “Stop thinking so much”, I elaborated on the principle of energy behind each thought and how we could empower our actions by focusing on preferred thoughts.

We have only limited resources, be it our time, money, or attention. To get the most out of them, it is important to invest your resources in the most profitable places.

You may have often heard about the 80/20 rule, also known as the Pareto Principle. Around 1906, Italian economist Vilfredo Pareto noticed that 80% of Italy’s wealth was owned by 20% of the population. He then carried out surveys on other countries and found that a similar pattern existed everywhere.

In the 1930s, Quality Management pioneer, Dr. Joseph Juran took it forward by talking about the “vital few and trivial many”. His principle that 20 percent of something was always responsible for 80 percent of the results, became known as Pareto’s Principle or the 80/20 Rule.

The 80/20 rule has become a useful metaphor for project managers who know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of your time and resources.
In business, they say that “80% of your sales comes from 20% of your clients.” It also applies to a variety of other mundane matters: we wear 20% of our favoured clothes about 80% of the time, we spend most of our time with 20% of our acquaintances and so on.

You can apply the 80/20 Rule to almost anything, from the science of management to the physical world. And you’ll find most of your output comes from a few of your tasks.

My favourite 80/20 principle has to do with saying “no”. Most of us take on more than we can handle. If you’re working at capacity, say “no” to that new client. If someone proposes a project that will fall in 80 percent-work-for-20 percent-results category, just say “no”. You can manage that limit and do things well, or you can ignore the limit and do a bad job of everything. The choice is yours.

It is possible to reap rewards in life by applying the 80/20 rule creatively. Students know that 20 percent of their study material takes up 80 percent of study time and that 80 percent of exam questions are drawn from 20 percent of your subject matter. And that you can score 80 per cent of your marks by answering just 20 percent of your question paper.

The argument can be extended to different areas. Twenty per cent of books give you much more value than the other 80 per cent, so they deserve 80 per cent of your time and attention. Likewise, 20% of the content of a book gives 80% of the value. So how do you benefit from this? Identify the critical parts of a book and skip the rest.

Twenty per cent of your skills give 80% of the returns. Thosse ones that give you the most returns are your strengths. It’s important to identify them so that you don’t waste time working on things which give you only small returns.

We all have a different energy cycle that determines when we will be most productive. Some are most productive in the morning while others are effective in the evening. Identify your most productive time and do your most important work in these moments.

The value of the Pareto Principle lies in the fact that it reminds you to focus on the 20 per cent that matters. Of the things you do during your day, only 20 per cent matter. Identify and focus on those things. If something in your planned schedule has to be dropped, make sure it’s not part of that 20 per cent. The idea is to not just work smart but work smart on the right things.

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Thought for the Week

“The combination of hard work, 
and smart work 
is efficient work”
Robert Half
(Financial Head Hunter)
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First published in Gray Matter - The Hindustan Times