Today I want to explore a quick tool called an 80/20 analysis that can help you achieve better results in a shorter period of time.
The 80/20 analysis is based on the Pareto Principle. This principle was named for Vilfredo Pareto, who found in the late 1800s that 80% of land in Italy was owned by 20% of Italians in the same way that 80% of the peas produced in his garden came from 20% of the peapods. This finding was one of many analyzing inequality and examining how the few end up with so much in our economies.
From this and similar findings of the tilting of economic benefits, Pareto decided that democracy was an illusion and a ruling class would always emerge from the 20%.
In modern parlance, this extreme conclusion has been ignored and the Pareto Principle has become more of a rule of thumb applied to a wide range of areas.
While my interest in politics and economics would push me to examine the implications for modern income inequality and the policy proposals to address it, this blog is about providing tools and information that is helpful to individuals.
So instead, we’ll be looking at the modern version.
The Rule of Thumb
As a rule of thumb, the 80/20 Rule states that roughly 80% of [output] comes from 20% of [input].
This could mean that 80% of your income comes from 20% of your clients. 80% of the conflict in your life comes from 20% of the people you interact with. 80% of your results come from 20% of your work.
This is obviously not an exact numerical analysis. However, it is useful as a rule of thumb.
Everything in life is unevenly distributed. The 80/20 rule reminds us of this and draws our attention to it.
Look at your to do list. (If you don’t have one, make one. Then look at it.) Which tasks on that list are part of the 20% that will have outsized results? Which are the few tasks that are the most important?
Don’t assign equal time and equal importance to each item on your to do list just because they take up the same number of lines on the list. Identify and prioritize the few most important items to maximize your results.
Creating a habit of this will lead you to be much more efficient. Efficiency allows you to achieve the same results in less time. Or better results in the same time. Up to you.
When we work through our tasks without weighing their importance, we waste time and potential. We spend too much time on little things that don’t matter much. We are inefficient, causing us to spend unnecessary time or achieve worse results.
Doing a quick 80/20 analysis can boost our efficiency drastically, saving time and improving results.
80/20 the Negatives
This can also be viewed from the other side.
80% of negative results can come from 20% of risks. 80% of your lost time may come from 20% of your problems.
What are the negatives in your life that are creating larger than expected results?
Identifying and preparing for the most impactful risks gives us the best chance to stay on the path to success. Identifying and addressing the our most time-consuming problems allows us to improve our productivity as much as possible in minimal time.
Don’t forget to do an 80/20 analysis on negatives as well as positives.
80/20 Your Happiness
An 80/20 analysis can improve your happiness as well.
Maybe 80% of your stress is caused by 20% of the problems in your life. Identify the few biggest stressors in your life and work to eliminate them.
Perhaps 80% of your interpersonal happiness comes from 20% of your relationships. Identify those relationships and strengthen them.
Maybe 80% of the enjoyment from the things you own comes from 20% of those items. Appreciate those items and work to get rid of some things that aren’t adding to your happiness.
80/20 Your Life
The 80/20 analysis can be applied to pretty much any area of your life.
What few things have the biggest impact on your happiness?
What few routines have the biggest impact on your health?
What few uses of your time produce the biggest improvements in your life?
The 80/20 analysis can help you get on track to live a more productive life, for sure. But it can also set you up for building a happier, healthier, and wealthier life, as well.