The 80-20 principle is one of the gigantic secrets of extremely effective people and organizations. You can learn to use the 80/20 or Pareto Principle to achieve much more with much less effort, time and resources. You do this by focusing your efforts on the 20 percent that really matter. It can be used in a systematic and practical way to greatly increase productivity and effectiveness and improve businesses and lives.

Pareto Principle or 80/20 Rule: History and Application

The Pareto Principle in one of it’s definitions today: 80 percent of your results come from only 20 percent of your efforts. It is commonly referred to as the 80/20 rule. It basically states that 80 percent of the effects come from 20 percent of the cause. Or you can say that 80 percent of the impact is generated by 20 percent of the causes or actions. It is clearly a powerful rule, and it does apply to most aspects of your life. This clumping has been proven over and over again. Of course, 80/20 is just a nice general rule of thumb. Sometimes it is closer to 70/30 or 90/10, but the overall concept remains relevant and true.

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. He noted that twenty percent of the people owned eighty percent of the wealth. The core of Pareto’s 80/20 Principle is simple. There is an observable imbalance in the relationship between many things that we would expect balance from: effort/result, clients/sales, wealth/people, wardrobe/clothes worn. Whether it is 80/20, 90/10 or 60/40, it is a rough ratio that shows up in surprisingly varied situations:

*Roughly 20 percent of clients contribute to 80 percent of a company’s sales.
*Roughly 20 percent of a company’s products contribute to 80 percent of their
sales.
*Roughly 20 percent of the time we spend working produces 80 percent of our
results.

The principle is visible in our personal lives as well:

*If we added up all of our friends, we probably would see somewhere around 20
percent of them 80 percent of the time.
*Most of us wear 20 percent of our clothes 80 percent of the time.
*80 percent of the most valuable information in our reading material is found
in 20 percent of the text. (Provided that we are not reading for pleasure.)

And it’s true that 80 percent of the wealth in this country is retained by 20 percent of the population. If we took all of the nation’s money and re-distributed it evenly across the population, it would not take long for the 80/20 ratio to go back into play and the wealth distribution to return to 80/20.

To break this down into practical terms, consider that 20 percent of your workday contributes to 80 percent of your results. The remainder of your efforts might consist of chatting with co-workers, answering low-priority or low-value emails, creating presentations with colorful graphics that only a few people see and which don’t provide any real results, or attending meetings with no clear agenda or objective and then walking away from them with no decisions made or direction known.

Being aware to the 80/20 rule can help you learn how to make it work for you. You can learn to use it to be more productive, and declutter all aspects of your life.

Nobody is quite certain why this rule can be observed in so many unrelated areas, but it can exert a visible effect when systematically applied in our work and home life. Frankly, what the principle tells us is that 80 percent of the things we do essentially don’t matter that much at all. We do them anyway, because it is our habit, or because we have learned to do things that way, or because of the way the system has been set up. We grow up being taught that effort and perspiration bring results. Parento’s 80/20 rule is anything but intuitive. So how can we start making the principle work for us at our jobs, or is it even possible?

There is a well-known connection between the things we like to do and the things we are good at. And, too, we dislike doing things that we have no aptitude for. We are not passionate about things we do not enjoy. Fortunately these disliked tasked are usually only a small portion of our everyday responsibilities. One way to benefit from Pareto’s 80/20 rule is to discover the tasks and skills we are best at and find a way to do them more often. Thus, our effort will be spent more intelligently. The product will satisfy us more, and our time will be better spent. We will perhaps find our passion, and working with passion makes a huge difference when striving for success.

The Intelligent/Lazy Man Has the Best Chance of Success

According to Pareto’s 80/20 Principle, out of four types of people–stupid/lazy, stupid/hard-working, intelligent/hard-working, intelligent/lazy–it is, quite counter-intuitively, the intelligent but lazy man who probably will go the furthest. It is he who will have successfully identified what activity gives him the most powerful results. He will then focus on that activity and this will enable him to have more free time to pursue his leisure. He will be free and happy. For our own professional lives, this means quickly identifying what we wish to achieve, what our niche market is, our customers or the people who “buy” the concept we push, and, for some, becoming self-employed as soon as possible.

This also means taking the 80/20 rule to the alliances we form at work. Our mentors, colleagues and mentees play a part in our plans. If we want to get ahead, we need to be able to quickly identify the people who can actually help us and the ones who we can help, and stop wasting our time with people who can do nothing for us.

How to Most Effectively Use the 80/20 Rule

How to Really Use the 80/20 Rule
Pick an area of your life where you feel there is an imbalance of effects. This won’t be true of all areas, but many situations are out of balance (money, time, health and possibly even relationships).
Try to identify the key 10, 20 or 40 percent of inputs that are creating most your results. This could be the 10 percent of time that creates the most returns. It could be the 40 percent of relationships that create the most happiness for you.
Find ways to emphasize the key percentage. Spend more time in those activities. Place them first in your schedule. Meet up with your key friends more often. Invest more of your money in the best expenses.
Find ways to downplay or eliminate the rest. Get rid of activities that don’t have a high payoff. Stop spending time in relationships that don’t create enough value. Stop wasting money on investments that aren’t giving you a greater quality of life.

Apply the Pareto Principle In Your Life

The trick is in finding what aspects of your life or work that you are only spending a small amount of time on that if you focused a greater level of effort would result in a greater reward. That’s not to say that you should eliminate all things at work and at home that are not producing the positive effects desired, but rather identify the small amount of tasks, things, events, and so forth which provide the greatest return and invest more time in them. This could range from simply putting 30 more minutes a day into the tasks with the greater reward or benefit, to eliminating unhealthy aspects of your business or personal life. There is no one fixed solution that fits everyone. Just remember that in this economy those who focus on the 20 percent will most likely be those who get ahead.