Live the 80/20 Rule

Live the 80/20 Rule

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“There is nothing quite so useless, as doing with great efficiency, something that should not be done at all.”
Peter Drucker

Also known as the 80:20 rule, irrespective of the nature of your business, the Pareto Principle holds that 80% of the consequences of any action come from 20% of the causes.This principle can actually be applied to everything you do. It is a powerful, fundamental principle of life – and of working smart.

The original 80:20 observation was as a result of Italian economist Pareto noticing in 1906 that 80% of Italy’s land was owned by 20% of the population. He then carried out surveys on a variety of other countries and found to his surprise that a similar distribution applied. He and others later discovered that this principle is proven in many other areas of interest:

  • 80% of results come from 20% of effort;
  • 20% of your customers will account for 80% of your profit.

Apply the 80:20 rule to the information you receive: 20% is useful, whereas 80% is not. The key is to identify and focus on that 20% and ignore or remove the rest completely.

The same is true of time expended for results achieved. Think of the benefits of applying the Pareto Principle to your time management and personal and business productivity!

Which one of these statements rings true for your business?

  • 80% of your business comes from 20% of your customers
  • 20% of your product or service range contributes 80% of your profit
  • 80% of customer complaints originate from 20% of the causes.
  • 20% of your individual effort and time achieves 80% of the desired results
  • 80% of your business productivity loss results from 20% of the causes
  • 20% of your staff is responsible for 80% of the business outputs and results
  • 80% of the value in the business is generated by 20% of the processes

The common approach to business is to squeeze every last drop out of each opportunity, to go ‘100% all-out’, without consideration of the impact on time, productivity and wastage. Simple, time-efficient businesses recognise that it is fundamentally inefficient to go for the ‘whole pie’ when you can get the majority of results for the minority of effort. With knowledge of the 80:20 principle, you can concentrate on what wins you customers and success. Look at your business and concentrate on the 20% that produces the 80% of benefit. Spend 80% of your time doing the 20% that really gets you results. ‘You win some, you lose some’ is no way to run a successful business, but armed with knowledge of the Pareto Principle, you can work the system to your benefit.

It’s not just about working smarter – it’s about working smarter on the right things that will get you the best results. Think really boldly about this law – how far, and in how many ways you can apply it. The more incredible the results can be.

  • Why spend 100% of your money and time on ‘growth at all costs’ when you could downsize, freeing up capital and time? Spend just 20% in developing the most profitable 80% of your current business, and invest the rest in other ventures?
  • Why work full time, when you can work only 20% of the time on the things that get you 80% of your profits? And spend the rest of the time sipping a cold beer on the beach, watching the sun go down!

How can you use this rule to revolutionise your business and your life? Take it to the limit!

Further Reading:

The Four Hour Work Week by Tim Ferris (Amazon Link UK, US)

If the above topic, or indeed any of my blogs are of interest to you, then contact me and let’s talk! Drop me an email at

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add a comment
  1. I couldn’t refrain from commenting. Perfectly written!

  2. abdullah alghamdi says

    Outstanding topic! Lovely ideas! You open my eye!

    • What i feel that it depends on business to business, the logic of 80-20 principles, you mentioned that… 80% of your business comes from 20% of your customers
      Now how can this be possible, when 100 customers are coming at the shop buying goods and they are all different and new customers then in this case it is 100% customers giving business and not from 20% people getting the business
      Please clear this equation for our better understanding

      In case of efficiency i can agree that when focused and pay less time you get more results compare to whole day involved

  3. Hello

  4. thank you, this rule so real, with my condition.

  5. SUNIL VYAS says

    But to know what 20 % makes the 80 % results needs 100 % efforts. That you know only when you spent 100 % on each and every task and then you come to conclusion that these are Trivial Task and these are vital task.

  6. Surely though 20% of your customers could easily be giving you 80% of your takings.

  7. I appreciate the authenticity and vulnerability you bring to your writing.

  8. Your blog emanates an aura of sagacity, wherein readers are seamlessly ensconced within the realm of your sagacious ruminations and exalted musings, forging an intellectual odyssey like no other.

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