Tuesday, 19 April 2011

What is 80/20 Rule? How to Apply 80/20 Rule?

"In matters of style, swim with the current; in matters of principle, stand like a rock." Thomas Jefferson

The 80/20 rule, the law of the vital few, States that 80% of results come from 20% of inputs, the other 20% of results come from the other 80% of inputs. Invented by an Italian economist Vilfredo Pareto, as he noticed that 80% of lands owned by 20% of population, means he observed that twenty percent of the people owned eighty percent of the wealth. Also referred as “Pareto Principle”.

The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are trivial. Today, in the business world it states that you will get 80 percent of your results from 20 percent of your effort. The 80% of your revenue comes from 20% of your customers and 80% of complains comes from 20% of customers.

How to apply 80/20 rule to your life?

You can apply that rule to your life to cut out inefficiencies, like time spent at work on less important activities like meetings, emails, etc.

The 80/20 rule can be applied to most anything in our lives. It is the time to change, Focus on 20% of high values activities to give you the output of 80% high value results. Let states tips on how to apply the 80/20 rule

- Find out activities which consume 80% of your time and energy, and produce only 20% or less output.

- Focus on the 20 percent that matters.

- If you are book worm likes reading – Look at books you’ve read. Rate them on the usefulness; learn speed reading, to get the maximum outputs with less time spent.

- In relationship, if you spend 20% of your quality time with your partner/husbands or wife, you get about 80 per cent of what you needs or want from your partner. But if you are still chasing the remaining 20% somewhere else (cheating), you will get 0 %, I guess you know what I mean. :)

- The 80% of your calories will likely come from 20% of the foods you eat. Reduce out those foods, you can reduce your caloric intake

- 80% of your bad eating can be reduced by changing bad habits, don’t eat front of TV or don’t eat junk food.

I was excited to share 80/20 rule with my wife to buy 80% what we needs, saves our time and energy on 20%, to cut down the frequency from every two weeks to once a month. She said "What's for "!
I personally believe 80/20 rule does not apply to women! when it comes to shopping. Just Kidding :)

Follow the 80/20 principle for a few days just to see what happens.  Share your thoughts and comments.

If you like to know more about 80/20 rule, I'd suggest The 80/20 Principle: the Secret of Achieving More with Less by Richard Koch