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The 80/20 Principle, Or: Less Is More

The 80/20 Principle, also known as the Pareto Principle, asserts that 80% of outcomes result from 20% of all inputs for any given event. The rule is a precept, not a mathematical law. But it has powerful applications in almost any field of life.

The 80/20 Principle, Or: Less Is More

In the early 20th century, economic philosopher Vilfredo Pareto uncovered a powerful secret hidden in economic statistics: Cause and effect are not in balance. A minority of causes – usually around 20% – produces 80% of results.

Related Summaries in getAbstract’s Library
Image of: The 80/20 Principle
Book Summary

The 80/20 Principle

You can work less and be more productive. It’s all in the percentages.

Richard Koch Nicholas Brealey Read Summary
Image of: Living the 80/20 Way
Book Summary

Living the 80/20 Way

You spend most of your life doing unimportant things. To be more productive, learn to be intelligently lazy.

Richard Koch Nicholas Brealey Read Summary
Image of: The 80/20 Individual
Book Summary

The 80/20 Individual

If you can make 80% of your profit with only 20% of your effort, why aren’t you running the world?

Richard Koch Nicholas Brealey Read Summary

The pattern he discerned, now known as “the Pareto Law,” occurs in every area of business: For instance:

  • 20% of products rack up around 80% of total sales.
  • 20% of customers account for 80% of revenue.
  • 20% of salespeople bring in 80% of a firm’s business.

The 80/20 Principle proves pervasive outside of business, as well:

  • 20% of drivers are responsible for 80% of car accidents.
  • 20% of criminals commit 80% of crimes.
  • 20% of a plant contains 80% of the fruit.

How It Applies to Your Life

The 80/20 Principle applies to many areas of your business and personal life. Use it to improve your company’s performance, boost your personal effectiveness and increase your happiness.

Time Management

Imagine you have a to-do list with 10 items. According to the Pareto Principle, two of those items will generate 80% of the return you’ll get from your entire list. Now, when you look at your list, you will be tempted to clear up a few small things first. Your first instinct tells you to check off the easy tasks to feel accomplished. However, those items may not be significant in moving you closer to your most important goals. And that’s a problem. Effective people discipline themselves to address the most important task first, always. They avoid scattering their attention and energy among too many things.

The things that matter most must never be at the mercy of the things that matter least.

Johann Wolfgang von Goethe

The 80-20 Principle teaches you to work smarter, not harder. Most time management books are based on some variation of the Pareto Principle and offer different implementation methods. Here are a few examples:

Related Summaries in getAbstract’s Library
Image of: Eat That Frog
Book Summary

Eat That Frog

Goethe said, “The things that matter most must never be at the mercy of the things that matter least.” Tracy is less eloquent: Eat that frog.

Brian Tracy Berrett-Koehler Publishers Read Summary
Image of: The One Thing
Book Summary

The One Thing

Achieving great success in all aspects of your life calls for devotion to one single thing.

Gary Keller and Jay Papasan Bard Press Read Summary
Image of: Less Doing, More Living
Book Summary

Less Doing, More Living

Here’s how to spend less time on chores and more time on your life.

Ari Meisel Jeremy P. Tarcher Read Summary
Happiness

If you’re unhappy, chances are you are engaging in too many activities that don’t actually bring you joy. As psychologist Sonja Lyubomirsky explains, happiness is a habit (provided you are not clinically depressed). Happiness involves actively choosing to regularly engage in activities that make you feel happy. In her book, The How of Happiness, Lyubomirsky offers a menu of twelve activities that research has shown will lift your moods. She recommends that you select the ones that appeal to you most and turn them into habits. Evaluate how you spent the past few months and identify the 20% of people and activities that produced at least 80% of your best emotional moments. Make those 20% your number one priority.

Image of: The How of Happiness
Book Summary

The How of Happiness

Unhappy? Take a scientific approach and get happy. You’ll be happy to know it works

Sonja Lyubomirsky Penguin
Read Summary
Quality Control

Dr. Joseph M. Juran, who pioneered many quality management techniques still in use today, partly based his approach on the – you guessed it – 80/20 Principle. In his 1951 volume, The Quality Control Handbook, Juran observed that several root causes lead to a large majority of wastage due to defects. Thus, if you want to help your organization to dramatically improve product quality, identify the core issues that are causing the problems – and make remedying them your number one priority.

Image of: What Management Is
Book Summary

What Management Is

Management is not supervising; it is inspiring people to manage themselves in pursuit of a mutual, meaningful purpose.

Joan Magretta and Nan Stone Profile Books
Read Summary
Sales

If you’re in sales, you’ve probably heard that 80% of your sales come from 20% of your clients. Here’s a new version of that rule: 80% of your sales result from 20% of your activities. The real secret to climbing into the top 10% of your profession is simple: Determine which of your activities are linked with actual sales revenue. Weed out the irrelevancies, focus on results, and you will be on your way to becoming a sales superstar.

Image of: Be A Sales Superstar
Book Summary

Be A Sales Superstar

What sets the top 10% of salespeople apart from the pack?

Brian Tracy Berrett-Koehler Publishers
Read Summary

The Exceptions That Prove (Or Don’t) The Rule

A potential pitfall of applying the 80/20 Principle is ignoring or misinterpreting the role of the remaining 80%. Here are two examples:   

Sales

Author Chris Anderson argues that online selling has created new economic realities that somewhat change the 80/20 Principle to successful selling. Certainly, the maxim that only a handful of blockbuster products will make up 80% of your sales continues to hold true. Yet great profits can still be made selling the other 80%, thanks to what Anderson refers to as “long-tail markets.” The “Long Tail” – the extensive, sustained reach of smaller, low-volume specialized products online – is now wagging the big dog of blockbuster hits in news, music, literature and film.

A few things sell a lot and a lot of things sell a little.

Chris Anderson

The long tail consists of the “hidden majority:” the vast assortment of books, films, recordings and other items that don’t become popular hits. Long-tail merchandise includes many quality products that big retailers that carry only the best-selling products bypass as they balance expensive inventory and finite space.

Image of: The Long Tail
Book Summary

The Long Tail

Online sellers can offer infinite variety to niche buyers, giving cyber-products a longer, more powerful life: the long tail.

Chris Anderson Hyperion
Read Summary
Endurance Sports

If you are a runner and want to get faster, your coach will tell you that just a few high-intensity runs per week will lead to most of your performance gains. Marathon legend Paula Radcliffe, for example, followed an 80/20 Rule by running only 3 of her 15 weekly training runs at high intensity.

The training concept, however, does not mean that the remaining 80% you run at a lower intensity are unimportant or unnecessary. Quite the opposite: they help you build the necessary stamina that makes the performance-boosting 20% possible.

Making 80/20 Work or You

The Pareto Principle often gets misconstrued as meaning that you only need to do 80% of the work needed. But when you strive for excellence, you need all 100%. It may be true that Leonardo da Vinci painted 80% of the Mona Lisa in the first 20% of the time he spent on it, but it wouldn’t be the masterpiece it is without all the details added afterward.  

In what aspects of your life is 80% not good enough?

Start by applying the 80/20 to your life in its entirety. Look at all life aspects: career, family, friendships, personal development, spirituality, health and fitness, etc. Identify the 20% of your life most important to you – and strive for 100% in these areas. You can then apply the 80/20 rule to the remaining 80% of all the activities you pursue.

The Pareto Principle should not stand in the way of pursuing excellence. Rather, it helps you work and live smarter so that you can focus your energy on the 20% of your life where “good enough” is not enough.

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