A rule fundamental to every human being’s life is that 80 percent of the results will come from merely 20 percent of the action - a fairly statistical concept. If you’re not a big fan of probability and statistics, the good thing about this rule is you don’t have to understand its theory to follow it.
This principle was named after the Italian economist Vilfredo Pareto, who observed that 80% of the income in Italy was received by 20% of its population. The assumption is that most of the results in any situation are determined by a small number of causes. He came up with recommendations for the feasibility of this rule. Pareto demonstrated with his research that this "rule" holds roughly in an 80/20 ratio, although in many cases the ratio can be a lot higher, going up to 99/1.
Numbers aside, the outcomes we see here might be of any form, depending on the activity or event. They can be financial or emotional rewards, as a result of anything you love to do. At this point, you should have probably realized that using an 80/20 is all about setting our priorities right while giving appropriate input to anything we do. The very basic principle of the rule demands quality and not quantity. While 20% of inputs account for the majority of the outcome produced, it makes us realize the importance of small yet most important things in our life having the highest impact on our outcomes and the way we live. Famous thinker John L Walt once quoted, “He who wants to live his life happily to the fullest, makes sure he works and thinks in harmony”.
Management thinker Joseph M. Juran saw that “the vital few and the trivial many” principle applies to business as well. It may not be surprising to know that business, particularly, the management people are the ones who are most benefitted by this rule. The reliability of this rule is indeed a factor of probability, meaning the plan can work for 80% of our expectations or even up to 99% for some people, while less than 30% for others. Here, the probability is not to be blamed. The rule favours people who spend more time on planning and organizing those crucial 20% inputs. Thus, 80/20 cannot be taken for granted and its feasibility has to be very well understood before involving oneself deeply in the plan.
For example, let’s take a business model of a well-known website. We must have all come across Facebook, a social media platform having more than 2 billion subscribers. Mark Zuckerberg wanted it to be a platform where his college students can share and look at the pictures of their peers. Following the massive response to the website, he took the company globally, offering the services for free, whereas, visiting celebrity pages and communities on the website demanded extra costs to be paid by the users. As time passed, Facebook received multiple offers from many businesses who wanted to socialize and globalize. Here, the companies asking for adverts wanted to pay Facebook based on one main factor - the number of users the advert had reached. At this point, he realized that greater the number of users using the platform, the more the adverts can be viewed, thereby making the business lucrative. Hence, he decided to offer the website completely free of cost. As a result, the page traffic increased, hence generating higher income.
In the above example, we can see the importance of setting our priorities right using the 80/20 rule. A decade back, the only major objective people looked forward to, was to expand their income after starting a business. The people who wanted to increase the reach of their business were highly successful in situations like these, thus showing that the 80/20 rule helps us in keeping our priorities right.
A simple fact is that not everyone can become a famous artist. It’s not easy for everyone to start a million-dollar business. However, no one can stop you from striving for those goals. We can work smarter today to find greater fulfillment, and that is what living an 80/20 lifestyle is all about. Most of all, your likelihood of becoming one of the famous artists or entrepreneurs is enhanced if you tweak your life to follow the 80/20 rule because you tap into what you do best more often.
The first thing you must decide, which is often the hardest step, is to determine what exactly your passion is. Some people can answer this question easily – “I want to be a famous pianist/singer/poet/author”, “I’d like to run my own real estate agency/coffee shop/advertising company” etc. Others may have a general idea like “I don’t want a day job” or “I want to run a business” where the specifics are not sorted yet. If you are not sure what your passions are, it’s important to test yourself. It’s usually easy to determine what you don’t like, so keep analyzing and interpreting until you find, what it is you do like.