In the 19th century, economist Alfredo Pareto first discovered the 80/20 rule after noticing that only a vital few pea pods in his garden produced a disproportionately large percentage of peas. He applied this ratio to economics by observing that 80 percent of Italy’s wealth was produced by 20 percent of the population. Management expert Joseph M. Juran popularized the concept and called it “The Pareto Principle.” The rule is plainly stated as roughly 80 percent of the results come from 20 percent of the causes, or in more personal terms, about 80 percent of benefits come from 20% of activities.
We know this 80/20 rule can be applied in business. Here are some examples:
- 20% of your products produce 80% of revenues
- 20% of your customers produce 80% of revenues
- 20% of your sales force produces 80% of the sales
- 20% of your marketing efforts produce 80% of the return
A savvy business leader will drill down into the company’s metrics to identify the vital few causes (the 20 percent) that produce outsized benefits. Once identified, the leader will then leverage those 20 percent to produce even more benefit. The company might create new products or services for the vital few customers who are most profitable, or create sales incentives that motivate the top sales people to sell even more. This is a great way to grow a business.
In personal life, it’s not so easy to see applications of the Pareto Principle. That’s because we don’t typically measure activities and benefits like we do in business. However, once you start looking for it, many examples of the 80/20 rule appear. Some are:
- 20% of your friends produce 80% of your enjoyment
- 20% of your purchases produce 80% of the benefits
- 20% of your activities produce 80% of your pleasure
In both business and personal life, it is extremely important to discover the vital few activities that produce disproportionately large benefits, and do more of the vital few.
As women in our prime years, we deserve to be discerning about how and where we spend our time and energy. We’ve earned the right to be discriminating in our taste. We must identify the 20 percent of our activities that produce the most pleasure and satisfaction – and then do more of them!
Here are some questions to ponder in your personal life:
- What vital few friends and family members give me the most joy? How can I spend more time with them?
- What vital few organizations do I volunteer for that give me the more satisfaction? How can I spend more time with those, and minimize time spent on others?
- What activities, work-related or otherwise, give me the most enjoyment and fulfillment? How can I do more of these?
- What purchases/acquisitions in my life bring me the most joy and satisfaction? How can I do do more of these activities and less of the others?
Strengths-based psychology research has shown that human beings flourish when they spend most of their time doing activities they enjoy, are good at, and have gained competence in. In other words, you are most productive and fulfilled when you are working within your strengths. The 80/20 rule teaches us the same thing. It gives you another lens with which to look at your life and decide what vital few activities give you the most fulfillment.
How can you live an 80/20 life?