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The 80/20 principle

By Edited Nov 13, 2013 0 0

What is the 80/20 principle?

And how can it be used?

The 80/20 rule, also called the Pareto principle, is the phenomenon that 80% of the consequenses within an area, are caused by 20% of the actions.
The Pareto principle, was discovered by the Italian, Vilfredo Pareto, who discovered that 80% of the english population owned 20% of the countries values. Pareto was also able to find this pattern in other countries and other time periods.

How are 80/20 used

The statement Work smarter not hardervery well fits the description of the 80/20 principle.
For the same reason, are a lot of companies implementing the 80/20 rule into many aspects of their business. This enables them to optimize parts of the business and cut out what's not or less important.
If 20% of the customers are responsible for 80% of the income, it might be a good idea to cut away the 80% of the customers that are costing time and effort, but providing only a small income.
The same goes for what the customers wan't. Instead of spreading out and producing a lot of different products, many companies are listening to the customers and focusing on producing 20% of the products that 80% of their customers are demanding.

Using the Pareto principle in your personal life

In our daily life, we use a lot of energy balancing our lifes between work, family, friends and time for ourselves. That's why it can be a good idea to sit down and find out what aspects(20%) in our lifes takes most of our time(80%) and simply cut away the things that aren't important.
There are of course some aspect that can't or should not be cut away. Most people probably woulnd't use less time with their kids.
But luckily there are a lot of other areas where the Pareto principle can improve our lives.

  • Friends - Are 20% of your friends taking 80% of your time by asking you favours and never giving anything back? Then you should consider if they are friends and if you wan't them in your life.
  • Job - Do you spend most of your day doing unnecessary tasks instead getting some real things done? Maybe you should tell that to your boss or find another job.
  • At home - Do you feel you are cleaning up all the time and doing house choirs instead of getting some quality time with the family? Perhaps you should cut some costs and hire a housekeeper instead.

So what you can use The Pareto principle for, is to create some effectiveness either in your personal life or business life. Doing that enables you to use time for those things in life you find most important. 


Vilfredo Pareto

The discover of the 80/20 rule.

Vilfredo Pareto

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