How to Understand and Embrace the 80/20 Rule

How to Understand and Embrace the 80/20 Rule

Just in case the 80/20 rule is a foreign idea to you, let’s first cover what it is.  The 80/20 rule also goes by the names the Pareto principle, the law of the vital few, and the principle of factor sparsity.  It’s the principle that 20% of your efforts will account for 80% of your outcomes.  That means 20% of the work you do will impact 80% of your success.  The other 80% then only accounting for 20%.

This seems odd, it’s a weighted system.  One could only hope that 1% of what you do would account for 1% of what happened or what you put in you get back.  The difficulty with this is using this rule to your advantage.  If only 20% of your work is causing 80% of your success wouldn’t it stand to reason that if you can isolate the 20% that will produce the 80% that you’d be more successful by spending your time on those activities?  Confused?  Let’s look at an example.

To make it easy we’ll go with an even 100 to demonstrate.  You send 100 emails and get a response back from 80.  You make 100 phone calls and get a response back from 20.  Which was a better use of your time?  Now let’s say of the 20 you talked to you sold 16 of them $100 worth of product each whereas the 80 people that responded to your email only resulted in total sales of $320.  Which was a better use of your time?

It’s important to understand that when we look at the 80/20 rule (especially when we are targeting a priority list) we need to consider the desired outcome to determine effectiveness so we can optimize our outcomes.  If your desired outcome is contacts vs. sales then emailing is the better use of your time.  However, if your concern is the profit then your time was better spent making phone calls.

Now, this isn’t to say that the other 80% should be discarded, otherwise you are losing that 20%.  But is it more practical to focus your attention on the 20% that will affect 80% of your outcomes?  I think it’s safe to say that this would be a logical conclusion.  Because this is based on a percentage the more you focus on the 20% that accounts for the majority of your outcomes the higher your rate of success will be, whatever your definition of success may be.

Using the 80/20 rule to your advantage will require a clear and concise goal as well as a review of how each activity correlates to the desired outcome.  Unfortunately for most of us that 20% is not going to include tasks that we enjoy doing and for this reason alone the other 80% is such an important part of our lives.  It’s what keeps us going and makes the other 20% worth doing so that we can continue to do the 80% that we love!

To learn more about the Pareto Principle please visit here. To learn how Milrich Associates can help you achieve maximum productivity, please visit here.



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