Do You Know the 80/20 Rule?
80 20 Rule Have you ever wondered why some businesses seem to be much more successful than others? It might have something to do with the 80/20 rule of business and economics, which states that about 80% of the results come from 20% of the efforts. This has also been called the law of the vital few, or Pareto’s law, after Italian economist Vilfredo Pareto who first described it mathematically in 1906 as he observed that 80% of the land in Italy was owned by 20% of the population.
What is the Rule?
The Pareto Principle or 80/20 rule states that, for many events, roughly 80% of effects come from 20% of causes. This can be interpreted in many ways: that you get 80% of your results from 20% of your effort; that you get more than 80% of your results from 20% of your inputs; and so on. The number 80 and percentage 20 are not absolute numbers.
Understanding How It Can Apply to Your Business
The 80/20 rule, also known as the Pareto principle, is a philosophy that states roughly 80% of effects come from 20% of causes. In terms of business management, it refers to prioritizing your most valuable tasks over less-critical ones. If you’re trying to manage a large workload and don’t have much time, use the Pareto principle to figure out which tasks need more attention and which can be delegated or minimized in order to maximize productivity.
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Applying The 80 20 Rule in business
Most of us have a tendency to focus on doing more and better. That’s all well and good, but perhaps we need to rethink things from time to time. Let’s examine applying Pareto’s Principle, aka The 80/20 Rule, in business.
Why You Should Think About Changing Things up
Have you ever found yourself repeating old behaviors and not getting much in return? Here’s an example: I used to put things off until late at night. Then, when I finally got around to working on something, I would feel tired, cranky, and unproductive. Not surprisingly, my performance would be subpar and it wouldn’t take long for me to lose my desire to work on that particular project. While we can push ourselves sometimes (and probably should), if you find yourself not enjoying or being productive during a routine activity it may be time to make a change. The 80/20 rule is helpful in that regard as it helps us determine where we might want to alter our current routine or methodology.