The 80/20 rule, also known as the Pareto Principle, is a phenomenon that states that 80% of results comes from 20% of effort.
The concept originated from Italian philosopher and economist, Vilfredo Federico Damaso Pareto. He discovered that there was an uneven distribution of wealth with 80% of the land in Italy owned by only 20% of the population.
When applied to industries and businesses, it became obvious that 80% of production comes from 20% of the companies.
That’s when the 80/20 rule became known as 80% of results come from 20% of action.
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This rule is used to express a variety of contexts but for the purpose of this article, we are using the 80/20 rule to apply to personal and professional growth in our daily lives.
If 80% of a business’s income comes from 20% of the effort, we can use the scenario that 20% of the sales reps generate 80% of total sales.
In reality, the 80/20 rule represents a catchy phrase but represents that 20% effort delivers 100% of the result.
Using the 80/20 rule in your personal and professional life
To maximize efficiency, we should focus on the vital 20% of activities that we love to do and are passionate about to yield the best results.
Identify which activities comprise the vital 20%. These are the activities you want to prioritize the most.
If you have 10 items on your to-do list, you want to aim to complete the top two high-priority tasks in order to create the most impact.
This means that even if you don’t complete all 10 items on your to-do list, the two tasks you completed represent the 20% which amounts up to 80% of the impact.
If you incorporate the 80/20 rule into your time-management strategy you can maximize your efficiency by limiting the amount of time you spend on tasks, increasing efficiencies and your return on time.
Many successful businesses and executives apply the rule to prioritize the projects or tasks that will generate the most impact or return on investment (ROI).
Identifying the crucial 20% of tasks that will create 80% of impact helps businesses identify priorities and delegate or outsource work that may take more time and effort.
We have noticed that 20% of the accounting industry makes up 80% of overall business growth, based on the reported success from our clients.
How to use the 80/20 rule in your daily life
Plan Your Day
Since 20% of your effort amounts to 80% of the work, consider which activities comprise the vital few you should focus on.
To maximize your efficiency, you must identify them and work on them first. Mind you, you should not neglect the other tasks. Once you clear the big tasks, tackle the remaining ones on your list.
Sales and Marketing
If 80% of your income comes from 20% of your customers, optimize your products services and advertising for the 20%. Satisfying the majority of customers and clients will work in your favour in the end. You can always optimize and pivot strategies but in reality, the 80/20 rule proves that it’s more productive to invest time on tasks that make up the bulk of your load.
As a manager, you can delegate tasks that you may feel are too time consuming. Using the 80/20 rule means you can shift your focus on to tasks that comprise the vital 20% and to make up 80% of impact. The rest can be delegated.
From a business perspective, if you isolate the projects that represent the critical 20% of your high-priorities and alleviate 80% of your load, you can automate and improve your work ethic to tackle competing priorities much faster.
If 20% of our clients generate 80% of the referrals and value into the business, it makes sense to build goals around focussing on a narrow set of the most important tasks or priorities that can produce the largest output in your personal or professional life it can bring about great improvement.
The 80/20 principle can be a life-changing hack that can skyrocket results in both your professional and personal life.
Interested in learning more?
If you’re interested in learning more about how the 80/20 rule, check out how we use the method to scale and grow businesses. SBA uses the 80/20 rule to achieve massive thinking and massive action and as a result, we produce massive results for our clients.
We use this targeted approach to ensure we focus on what we are passionate about while ensuring that we maximize our efforts and spend time on growth levers that will generate the largest results for our business and the clients we serve to scale and grow.