Loading ...Apply The 80/20 Rule To Your Life.
Vilfredo Pareto was a French-Italian economist and philosopher that lived in the late 1800’s to early 1900’s. He made several important contributions in economics, especially in his studies of income distribution among individuals. His most famous concept is the Pareto principle of economics.
The Pareto principle, known famously as the 80-20 rule, states that, for any kind of event, 80% of the effects comes from 20% of the causes. Pareto observed that 80% of the income in Italy went to 20% of the population. He also noticed that 80 percent of the land in England (and every country he subsequently studied) was owned by 20 percent of the population. In his own garden, he observed that 80% of his garden peas were produced by 20 % of the peapods.
The rule became so famous that he and others observed the same phenomenon outside the scope of economics. This principle can be applied to practically anything. For example, in terms of relationships: 80 % of nurturing, support and satisfaction are provided by 20% percent of the people you know such as friends, colleagues and family. In the business world: 80 %of profit comes from 20% percent of your customers. This is what businesses focus on these days to increase their bottom line profits. For self productivity: 80% percent of what you get done comes from 20% of your activities.
I have put Pareto’s principle to good use myself. I realize why my favorite NHL hockey team, the Los Angeles Kings, is not doing so well. The reason why is because of Pareto’s law. This is analysis as of games played until Dec.9th, 2007. Of the 64 (80%) goals that the team has scored, it is spread out among 9 (38%) players. As they do in the business world, we need to focus on the 20% of the customers. That means, we have to have the bulk of the scoring spread among the top 4 or 5 players. The reason Detroit and Carolina are at the top of the standings is because is because 80% of their goals come from 20% (4-5 skaters) of their players. Remember, the minimum optimal ratio is 80/20!
How can we put the Pareto’s 80/20 principle to good use besides hockey stats? Well, there are two things you can do right now.
1) Time management: When we get bombarded with many tasks to do, simply write them down and figure out which 20% of the tasks will contribute to 80% of the results that you seek. Then simply just focus on those tasks that fall into the 20%
2) Focus: Don’t try to do more than you can handle. Just do more of the correct things. For example, 20% percent of our problems contribute to 80% of all the misery and hardship. Working on just that 20 % can greatly contribute to our personal growth. So if the 20% of your problems are the girl that just dumped you, the street bum that scratched your car or the dog that ate your homework, forget about it and you will feel 80% better!
With a little effort and the application of the 80/20 rule, we can save a lot of our emotional and physical energy to concentrate on things that really matter to us as well as enriching our lives in the process. This is a small side note regarding the 80/20 rule: the numbers don’t always add up exactly. The rule has also been described as 90/10 or 95/5 but the minimal ratio is 80/20. Which part of the crowd would you rather be in? The 20% that own 80% of the money or the 80% that own 20% of the money??
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Tags: 80/20 rule, focus, hockey, LA Kings, NHL, Pareto, pareto's principle, Time Management
