How does the 80/20 rule work?
It’s a simple yet potent principle that suggests a small portion of your efforts can lead to a significant outcome. It’s a concept that can empower you to achieve more with less.
By understanding that 20% of our activities yield 80% of the results, we are left to achieve more.
This powerful insight can be applied to various aspects of our lives. For instance, in personal productivity, we can identify and focus on 20% of tasks that yield 80% of our results. In business management, we can identify the 20% of customers that generate 80% of your revenue and cater to their needs. It’s a tool that can ignite our motivation and drive for success, inspiring us to maximize efforts and achieve more.
Exploring the historical context of the 80/20 rule can be a fascinating journey. Understanding its origins and rich history can help us appreciate its significance more deeply, sparking our curiosity and eagerness to explore this powerful principle further. This historical perspective enriches our understanding and stimulates our intellectual curiosity, making us feel intrigued by the depth of this concept.
For centuries, economists and philosophers have written about the 80/20 rule. Their contributions have paved the way for our understanding of this powerful principle.
Early contributors to the 80/20 rule, such as Jean-Baptiste Say and Vilfredo Pareto, have significantly shaped our understanding of this principle. Jean-Baptiste Say, a French economist, first observed the principle in the early 19th century. Vilfredo Pareto, an Italian economist and sociologist, further developed the concept in the late 19th century. Their work has laid the foundation for the 80/20 rule as we know it today, connecting us to the historical development of this powerful concept.
The entrepreneur reallocates economic resources from lower-productivity areas to higher-productivity areas with greater yields.
In 1896, Vilfredo Pareto, an Italian economist and sociologist, developed the concept of the 80/20 rule.
In any series of elements to be controlled, a selected small fraction of the number of elements always accounts for a significant fraction in terms of effect.
The Pareto Principle was born.
In 1949, George Zipf, a Philosophy professor at Harvard University, stated:
The input of resources (people, goods, time, and skills) tends to be allocated in a way that a small portion of resources (20% to 30%) accounts for a larger corresponding output (70% to 80%) of results.
In 1951, Joseph Moses Juran, a management consultant and significant contributor to the quality control revolution, wrote the Quality Control Handbook. He renamed the Pareto Principle,
Rule of the Vital Few and the Rule of the Trivial Many.
In 1957, C. Northcote Parkinson wrote two books, Parkinson’s Law and The Law and the Profits. His first law was:
Work will expand to fill the time available for its completion.
Parkinson’s Law suggests that work tends to fill the time allotted to it. Combined with the 80/20 rule, it highlights the importance of focusing on the most productive tasks to avoid inefficiency and wasted time.
His message focuses on wasted time and the expansion of unnecessary bureaucracies within business organizations and governments. When people and institutions spend other people’s money, they have a natural incentive to be inefficient and extend the time for completion. Consuming assets rather than getting results is generally their motive.
An official wants to multiply subordinates, not rivals. Officials do work for each other. The number of employees will expand by 5-7% per year, irrespective of any variation in the amount of work (if any) to be done.