Vital Few than Trivial many....

I was preparing for a quality training and evaluation when I came across the famous 80-20 rule.Thought of sharing some thoughts on it here......

What Exactly Is The 80/20 Rule?

By the numbers it means that 80 percent of your outcomes come from 20 percent of your inputs. As Pareto demonstrated with his research this rule holds true, in a very rough sense, to an 80/20 ratio, however in many cases the ratio can be a lot higher - 99/1 may be closer to reality.It really doesn’t matter what numbers you apply, the important thing to understand is that in your life there are certain activities you do (your 20 percent) that account for the majority (your 80 percent) of your happiness and outputs.

To say that 20 percent of your activities produce 80 percent of your financial rewards, and that is true, there are probably a handful of activities you do each week that produce your income. You can definitely apply the 80/20 Rule to most aspects of your business or working life, however I believe your overall happiness and satisfaction are much better variables to focus on.

Actual 80-20 rule's origin:

The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that, for many events, 80% of the effects comes from 20% of the causes. Business management thinker Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who observed that 80% of income in Italy went to 20% of the population. It is a common rule of thumb in business; e.g., "80% of your sales comes from 20% of your clients."

80/20 Examples:

There are many economic conditions, for example the distribution of wealth and resources on planet earth, where a small percentage of the population controls the biggest chunk, which clearly demonstrate the 80/20 Rule. There are business examples such as 20 percent of employees are responsible for 80 percent of a company’s output or 20 percent of customers are responsible for 80 percent of the revenues (or usually even more disparate ratios). These are not hard rules, not every company will be like this and the ratio won’t be exactly 80/20, but chances are if you look at many key metrics in a business there is definitely a minority creating a majority.

How You Can Live An 80/20 Lifestyle:
When you start to analyze and breakdown your life into elements it’s very easy to see 80/20 ratios all over the place. The trick, once your key happiness determinants have been identified, is to make everything work in harmony and avoid wasting time on those 80 percent activities that produce little satisfaction for you.

The message is simple enough - focus on activities that produce the best outcomes for you. This applies to both your business/working life and your personal life .


To read more on it:

• Wikipedia's definition


• Thoughts on 80-20 rule


• Pareto Principle's Complete Information