The 80-20 Rule: What It Is & How It Works?

Vilfredo Federico Damaso Pareto, an Italian thinker from the past. One day, he noticed something peculiar in his garden: only 20% of his pea plants produced a whopping 80% of the healthy pea pods. This got him thinking about the unequal distribution of things in life.

He extended this idea beyond his garden and discovered that 80% of Italy's land was owned by just 20% of the population. He looked into various industries and found that 80% of the production usually came from only 20% of the companies. This observation led to a generalization: 80% of results come from just 20% of the effort.

So, what's the deal with Pareto's 80/20 Rule?

Well, it's this concept that there's often an imbalance between what you put in and what you get out. While it might not always be a perfect 80/20 split, you can spot this pattern in various business scenarios:

• 20% of the salespeople generate 80% of total sales.
• 20% of customers bring in 80% of the profits.
• 20% of your expenses are responsible for 80% of your financial stress.
• 20% of tasks that contribute to 80% of your professional success and focus on them.

Now, Think about your daily life. Do you find that you use only 20% of your belongings or spaces most of the time?

For example:

• You own many suits, but you wear one particular favourite about 80% of the time.
• Despite having many rooms in your house, you mainly spend your time in just a few.
• On your smartphone, you have tons of apps, but you mainly use the ones on your home screen.
• When grocery shopping, you stick to the outer aisles and ignore the middle ones.
• And in your social life, you spend most of your time with the same 20% of friends and family.

Now have you seen these high achievers in the company? This is exactly what do they do, they realize that trying to handle everything is impossible, so they figure out what truly matters. Then, they either delegate the rest or let it go.

Now, here's the exciting part – how can you use this rule to your advantage?

• If you're an executive, focus on what aligns with your organization's or boss's main goals, and delegate or drop the rest.
• Freelancers, identify your top-paying clients and nurture those relationships for the long term.
• Entrepreneurs, consider how an 80/20 mindset can help you stick to your strategic plan instead of chasing endless new opportunities.

Remember, time is limited. Pareto's principle can be your ally, helping you prioritize and gain more control over your life. So, what 20% of your work drives 80% of your results? It's worth finding out!