80/20: Our lives in ratios

Also known as the 80/20 rule. We have all heard of 80/20 rules over the years, in many different contexts, and also in reverse, 20/80 rules. We have heard variants of this: the 90/10 rule. The 85/15 rule, and so on. What are these approximate numbers?

80/20: The Pareto Principle

People are using many variants of this principle, even if they don't know they are doing it, for example:

• "You should focus on the 20% of the work that drives 80% of your success."
• "In terms of SEO, if you do the basics right, 20% of the work, you can achieve 80% of the results."
• 80% of your sales come from 20% of your customers."

When searching for 80/20 or 20/80, one primary reference comes up: The Pareto Principle.

The Principle states that "Roughly 80% of the effects results from 20% of the causes."

This principle was coined by Joseph M. Juran, who named it after economist Vilfredo Pareto, who noted that 80% of the land in Italy belongs to 20% of the population.

90/10: The Stephen Covey Principle

Stephen Covey stated: "10% of life is made up of what happens to you. 90% of life is decided by how you react."

Life coaches and motivational speakers use this principle and variations of the 80/20 rule to drive their messages home to their audiences.

But what does this mean?

These rules have been adapted to many fields and applications:

• Mathematics use the Pareto Distribution and Pareto Indexes.
• Computing science use it as part of the COCOMO software coding estimate.
• In economics, the 20% richest people in the world holds around 80% of the world's GDP distribution.
• In baseball, it was stated that 15% of players created 85% of the wins, while 15% of the wins were created by the remaining 85% of players.

The exact number is not what is important, but what it stands for is. I am going to shamelessly summarize an example used at baass.com:

Your daughter knocks her coffee over, and messes up your shirt. Nothing you can do about it, it has happened - but how you react can make all the difference.

• You criticize your spouse for placing the cup too close to the edge.
• Your daughter cries so much, she did not focus on finishing her breakfast, so she misses her ride to school.
• In the rush to get out of the house, you forgot your briefcase.
• Because you're late, you drive too fast and get a fine, and a further delay.

It is not the the coffee, your daughter, your spouse or the cop that caused this problem. It is your reaction to the initial event: the spilling of the coffee. Had you stayed calm, your daughter would not have missed her school ride, you would not have had to take her to school, and you would probably not have forgotten your briefcase or gotten the fine: 10% is what happened to you, 90% is how you reacted.

In business, the Pareto Principle can help you tremendously when analyzing problems. Remember: Roughly 80% of the effects results from 20% of the causes.

• 80% of your software bugs are likely to be solved by resolving the top 20% of the causes of said bugs.
• 80% of your workflow problems can be eliminated by taking out the top 20% of the stumbling blocks.
• 80% of your revenue generating issues can be resolved by eliminating the top 20% of the causes thereof.

There are countless examples of this, and there are variations on these figures, but one thing remains:

You do not have time to deal with 100% of all your problems (whether personal or business related). Deal with the top 20% first, and solve 80% of your problems.

Is this enough for a happy life or a prospering business? Of course not. Once your primary 20% of issues are resolved, new issues will take their place, and if not, take the remaining issues, deal with the top 20% and solve 80% of your remaining issues.

Except for marginal and low-impact cases, there is no such thing as 0 defect. There is no such thing as a 100% bug-free piece of software. There is no such thing as solving all problems a business has.

Besides focusing on what you can control, limit your biggest effort to the 20% that will make 80% of the difference.