The 80/20 Rule Revisited


The 80/20 Rule can save massive amounts of time and energy when properly understood and applied. As with many observations described as rules, failing to understanding the operating principles underlying the 80/20 Rule leads can lead to some pretty academic debates about its veracity, which ultimately leads inaction.

Repopularized in Tim Ferriss’ The 4-Hour Workweek, the 80/20 Rule is a shorthand term for a series of observations made by an Italian political economist in the 19th Century, Vilfredo Pareto (hence the other name for the 80/20 Rule, the “Pareto Principle”). He noted that 20% of Italy’s population owned 80% of its wealth. He saw this reciprocal distribution play out in other domains: 20% of all of the pea pods sown in the ground produced 80% of the peas, for instance. But just how universal is the 80/20 Rule, and can you apply it in your work and life?

Making the 80/20 Rule Work

The 80/20 Rule has become popular enough to engender an inevitable backlash. Sid Savara argues that problem with the Pareto Principle is that it just doesn’t hold up under scrutiny when you actually perform a numerical analysis. In his post, he notes that 80% of his income does not come from 20% of his clients. In a more recent article, Stepcase Lifehack’s Dustin Wax includes the 80/20 Rule in his list of questionable productivity ideas. “What is ‘20%’ of the stuff I do anyway?”, he asks rhetorically. “What would ‘80%’ of my productivity even look like?”

Stumbling blocks to 80/20 implementation

Both of these articles make some valid criticisms, but they throw the baby out with the bathwater by focusing on the literal. But we shouldn’t blame the authors for that; it’s the term “80/20 Rule” that causes the problem. The term contains two misnomers: “80/20” and “Rule,” which leads to the first stumbling block to actually implementing the principle.

Taking the ratio too literally. The 80/20 Rule is really a fancy way of saying that a few elements in a set have a lot more leverage than most elements in that set. This is better expressed as an observation than as a “rule”. Whether those few elements comprise 20%, 7% or 45% is less important than the mental exercise of separating the critical few from the trivial many. If you’re starting a new business, critical projects like getting a loan will be far less numerous than trivial projects like getting business cars or purchasing office furniture.

It’s easy to get lost in the semantics of 80/20. Edward de Bono coined a thinking operation he called “HV/LV”, where the user would spend a couple of minutes defining the “High Values” in a problem or situation that had the most impact, then the “Low Values” which also had to be taken into account. Regardless of your preferred terminology, think of 80/20 as a filtering mechanism. Which “20%” of employees in your office account for “80%” of the help you need to get your job done. Who are the few clients that take up most of your time. Which ones account for most of your income?

Undefined metrics. There’s no way to measure criteria you haven’t first defined. Notice that Dustin Wax’s questions, “What is 20% of the stuff I do?” and “What does 80% of my productivity look like?” are rhetorical, presupposing that the answers are nonexistent if they aren’t axiomatic.

Unfortunately, the full inventory of the stuff we do isn’t self-evident. When people trying to lose weight actually write down every single thing they eat and drink during the day, they’re almost always surprised at how much more they consume than they normally assume. There’s no way to know what 20% of what you do each day is unless you track 100% of what you do, at least for a day. But you have to define what you’re going to track first. Otherwise you’ll have no point of reference for whether or not what you’re measuring matters. Definition is the first step to living consciously.

Giving equal weight to all factors. Not all tasks are created equal, but humans have a strange tendency to apply the same standard of performance to all tasks, regardless of their importance. Running errands becomes as time consuming as making sales calls. Someone spends as much time making his website look pretty as he does building traffic. Someone spends as much time inside of her email inbox as she does outside of it.

The 80/20 Rules provides a reality check that forces us to prioritize some factors above others. Again, it doesn’t matter if the ratio is really 80/20, only that we try to identify the few things that matter a lot more than most things. Incidentally, “factors” can be tasks, projects, resources or people.

When you force yourself to look for the critical few, you often don’t need to make an exhaustive analysis of every single factor. When I asked myself two years, “What are the 20% of foods I eat that cause 80% of my excess weight?”, it only took a couple of minutes to identify the obvious ones: candy and pastries. Cutting them out entirely — not easy by any means, but extremely simple — I lost 1.5 pounds in nine days.

Test It Yourself

If the 80/20 Rule isn’t hard science, does that make it an urban legend? The only way to really find out is to test it. Think of a few procedures you’d like to optimize, define all factors that lead to their outcome, then ask yourself which few factors either have the most positive or negative impact on the outcome. Get in the habit of dissecting situations and defining what parts have the most leverage.

What about this article? What are the one or two points raised (~20%) that had the most leverage? What are the one or two points that fall short? Let me know in the comments.


Popular search terms for this article:

80 20 rule, pareto principle, the pareto principle has often been described as the 80/20 rule, 80/20 rule, 5 hour work wek 80 20 rule, tim ferrios 80 20 rule

Andre Kibbe currently works as a content analyst for Internet Brands. He can be found on Twitter: @andrekibbe

Discussion

  1. Sandréa Souza on the 10th February

    We, librarians, have a 80/20 rule too. Is said that 80% of our library users are answered by 20% of our collection….
    Hard is to identify these 20%…
    Needs change in time and space. One month the country history is on top of lending, and in other, the World Cup athlets’ names are on top of searches…
    Of course, nobody will throw away that encyclopedia everybody read… but beyond this, everything is nebulous…
    Your post helps in someway to find that out. Thanks.

  2. Rob Cubbon on the 11th February

    Haha, I wouldn’t say that 20% of this article carried 80% of the meaning for me, it was all marvelous!

    Having read the 4-hour Workweek a few months a go I mentally calculated that probably 80% of my income comes from 20% of my clients and definitely 20% of my time. But I admit that maybe there’s stuff I do during the unproductive 80% time that would render my 20% productive time useless. But I thought, whilst reading the book, that you could use the Pareto Principle to help you cut out some of the more superfluous effort from the working day.

    I haven’t tested it though. I haven’t got the time!

  3. Otto on the 11th February

    For a long time I’ve had a ‘gut’ feeling about the Pareto Principle’s inadequacy as a ‘rule’. But as you explained, using it as a ‘filtering’ tool makes it more palatable.

    Yes as a formal rule, the Pareto principle would vitiate what it was meant to be used for. Never mind failing under strict numerical comparisons.

    I like th HV/LV term as an equivalent of the Pareto Principle.

    Thanks for taking the time to parse it as you have!

  4. Valente on the 15th February

    Mmm, i would think it to be more of a guideline than a rule, but in a whole general sense it probably does hold some weight in terms of how one could apply it to increase productivity.

  5. Patricio on the 17th February

    Nice article although I was surprised you didn’t mention anything about The Long Tail. You probably heard of Chris Anderson and his book/blog/article? He shows that the Pareto Principle is having a hard time in modern economies specially with Internet and online services. You should take a look at this article http://goo.gl/SLAC

Add a Comment