The 80/20 Rule of Management and How It Can Be Applied in Your Life To Make You More Successful

You have always been told to maintain balance in everything you do.

Well, it’s time to unlearn a bit of the theory.

Many of you might have heard about the 80/20 rule, but how often do you apply it?

Being a student of management, the first and extremely important principle I learnt in class was the 80/20 rule. This may come as a surprise, but the 80/20 rule is applicable in more cases than you thought. It is just not a rule that is applicable in management, but it is something that will help you glide through most problems in your life.



The renowned economist, Pareto, while at home, noticed that 20 percent of the pea pods in his garden bear 80 per cent of the peas. He used this theory and published a paper, where, using the same thumb rule, he proved that noticed that 80 percent of the land in Italy is owned by 20 per cent of the people.

Later, management consultant Joseph M. Juran developed the 80/20 rule and named it the Pareto Principle after the economist. The assumption, thus, is that 80 percent of the results come from 20 per cent of the causes.

Application in Business

The most common application of the 80/20 rule is in the business world, where the rules vary from 80 percent of the sales of a company coming from 20 per cent of the consumers to 20 percent of your operations leading to 80 percent of the profit. There have been many improvisations in this area. Perry Marshall, in his book ‘80/20 Sales and Marketing’ says that the rule can be scaled to the second power, i.e., 4 per cent (20% of 20%) sales are generated by 64 per cent (80% of 80%) of the customers. This can also be scaled up to the third and fourth powers, thus making it easier to find the customers who would generate the most sales of your company.


Outside Business

The 80/20 rule has many applications outside business.

In economics, it is a widely known phenomenon that 20 percent of the people control 80 percent of the global wealth.
In software, Microsoft noted that by correcting 20 percent of the bugs, 80 per cent of the total system crashes and dysfunctions got eliminated.
In coding, Lowell Arthur expressed a similar statement,“20 percent of the code has 80 percent of the errors. Find them, fix them!”


How You Can Apply the Rule in Everyday Life
You have many tasks to do, and most of them may take the same amount of time. But there are 20 percent of the tasks that will have 80 percent of the results. Recognise these tasks and focus on them, rather than looming in the 80 percent of the tasks that would not have a major effect on your life.

Also, you will notice that 80 percent of all the results come from 20 percent of your time: at the intervals where you are most productive in the day.

As you consciously try to turn your life to this road, you will notice other instances: you wear 20 percent of your clothes 80 percent of the time; you get 80 percent value from 20 percent of your possessions, and 20 percent of the words you speak account for 80 percent of the occurrences.

This may seem like a very easy thing to do, but once you start trying to control your life in the 80/20 way, you will see things more clearly: most of your actions in the day are divided into this rule, like your diet, leisure time, even the people you spend your day with; not just your work. Look for patterns and ratios in everything you do, which will lead to better control of your life.

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