The 80/20 rule

A good portion of our everyday life is based on the 80/20 principle (or 80/20 rule) which is also known as the Pareto Principle. Italian economist Vilfredo Pareto first formulated this theory in 1897. Pareto was studying incomes and money and discovered that a small portion of the population had a large portion of the money. Pareto referred to this phenomena as the “unequal distribution of wealth”, and developed several mathematical formulas to quantify his this maldistribution.

The work of Pareto was later taken and expanded on by an industrial engineer by the name of Joseph Moses Juran. Juran took the work Pareto had done and made it into a more universal law with his work on what Juran called "vital few and the trivial many". Juran had worked much of his career as a quality control engineer and he observed that often 80% of a problem is caused by 20% of the causes. It was Juran who is actually credited with coining the term “The Pareto Principle”. In his paper The Non-Pareto Principle Juran explains it this way.

“It was during the late 1940s, when I was preparing the manuscript for Quality Control Handbook, First Edition, that I was faced squarely with the need for giving a short name to the universal. In the resulting write-up2 under the heading "Maldistribution of Quality Losses," I listed numerous instances of such maldistribution as a basis for generalization. I also noted that Pareto had found wealth to be maldistributed. In addition, I showed examples of the now familiar cumulative curves, one for maldistribution of wealth and the other for maldistribution of quality losses. The caption under these curves reads "Pareto's principle of unequal distribution applied to distribution of wealth and to distribution of quality losses."”

Thanks to the diligent work of Duran we can now see how the 80/20 rule can be applied to any area of our lives or our work. As he points out “the trivial many” are the areas we do not need to spend our time or energy on as they are just not all that important to our end result.

The first time I can remember consciously using the 80/20 rule to my advantage was in my grade 10 math class. That year I had 2 teachers who would alternate months in which they taught, on of which I liked, one of which I did not. At this stage of math class the equations were beginning to get quite complex and multi step. I discovered however that with creative thinking I was able to skip most of the steps in the process and still come up with the correct answer. In essence I was doing 20% of the work but still coming up with the desired effect. One of my teachers saw my gift and encouraged me to continue using it to my advantage. It was he who coined the term for me “The Chuck Method”. The second teacher however saw things in an entirely different light. He decided that even though my answers were correct he wanted to grade on compliance to the system and would give me 20% on the tests because he could not come up with how I got to my answers.

I use this story because I believe it really illustrates why so few people actually put the 80/20 rule into practice. We live in a society that places emphasis on compliance more than creative thinking. When we try to develop something new it is often shot down as disobedient. I believe that each one of us has the power to challenge this system. This is one of the major reasons why the 80/20 rule is so powerful is, 80% of the population is willing to accept things as they come and don’t believe that they deserve anything better. It is the top 20% who will not accept this and they increase the gap between the haves and the have nots. It has been said that one of the biggest problems people face is not that they aim to high and fail; it is that they aim to low and succeed.

One great example of putting the 80/20 rule to a very positive use is the Windows operating system we are all familiar with. The Windows desktop is a fantastic example of the rule in action. On any given computer there are hundreds of programs installed but most are rarely used. On our desktop we have a small number of programs we use on a regular basis. It is much more convenient to have things like our web browser in an easily accessible place, but we don’t need every program there.

There are plenty of examples in our everyday world of the 80/20 rule being used, often times by each one of us. The real power of the rule however comes into play when you begin to make a conscious effort with each decision you make during the day. As soon as you become deeply and innately aware of the power the 80/20 rule has over your life the sooner you can begin to unleash to power it contains.

The secret to success is knowing what are your 20% activities which are producing the 80% of your results. Doing more of the productive activities in your life will allow you to earn more in less time and have more free time to do the things you enjoy.