The 20 Percent That Matters Most

by Marguerite Granat on April 17, 2010

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Are you focusing on what matters most?

Do you ask yourself-what actions cause the best outcome?

If any of these questions resonate with you, well…you might benefit from knowing how to use the 80 20 rule.

How about these little observations:

  • 20% of patients use most of our medical care
  • In general we use 20% of the clothes in our closets
  • Usually 20% of people achieve 80% of results
  • 80% of profits usually come from 20% of products
  • Approximately 80% of revenues can be traced to 20% of customers
  • We usually use only 20% of the software 80% of the time
  • If you take a product apart, 80% of its cost comes from 20% of its parts

Vilfred Pareto in 1897 looked at this pattern for the first time. He was studying patterns of income in 19th century England. What he found was that most income went to a minority of people. He looked at these patterns mathematically throughout history and geographies and found the same proportion. He started the process of figuring this out but it truly picked up when leaders such as Juran started to implement these concepts during the Quality revolution and is being utilized today in Six Sigma with the Pareto Chart. Please don’t ask me what this is because I have no clue but I thought it fitted nicely here. I also just noticed that the 80/20 principle is a big part of Tim Ferris’s book-The 4 hour week.

When I start to think about this theory, the implications are great. Our lives can dramatically change when we figure out this formula. I’m still getting a handle on this concept and will start observing more closely the impact of various activities on the outcomes in my life.

Your Thoughts and Insights

How about you?

Are you currently taking advantage of the 80/20 rule?

If so, would you please share how this has made an impact in your life?

Please Share!

    Tagged as: 80/20 rule, Pareto Rule, Six Sigma, Vilfred Pareto

    • http://www.mthreeadvisory.com Mac Martirossian

      Great article; thank you for writing it.

      I have lived by this rule for as long as I can remember. For me, it is all about Making a Difference. In fact, I have a keynote speech wrapped around it. Where do we add value to our companies or the organizations we serve? 80% of what someone does can be replaced by another person hired to replace them. We should hold ourselves accountable to deliver that 20%…..all day, every day.

      Cheers,

      Mac

      • Marguerite Granat

        Mac, that’s great that you’ve developed a keynote speech around this topic. It is all about focusing on the right things. Do you have any suggestions on how to identify the most important 20% that delivers that 80% result?

        • http://www.mthreeadvisory.com Mac Martirossian

          To focus on the most important 20% that delivers the 80% result, we have to do three things:

          1. Understand what is important from your organization’s perspective
          2. Be a Pain Reliever by improving or fixing a broken process (most of us like to point them out, but few of us step up to correct them)
          3. If what you are doing does not have a “wow” factor, it’s probably not in the 20% category

          In my last senior leadership position at The Home Depot, Home Services Group, I would do a weekly soul search, as to what I had accomplished the prior week, before facing another Monday filled with meetings, conference calls and e-mails.

          Cheers,

          Mac

          • Marguerite Granat

            Thanks Mac for your insights on how to focus on the most important 20%. These make a lot of sense!

    • Montague Boyd

      I and my partners have structured our business around this rule. In our world we think/call the 20% our “unique abilities”. This concept from STRATEGIC COACH Dan Sullivan has helped us focus on each team member’s unique ability and build a unique ability team. The real task is to stay on only your unique ability. We want the fries to taste the same to each client. This thought pattern makes it clear that to make THAT (fries taste the same) happen each of us must stay in our zone. The more we follow this the more productive we become.

    • Marguerite Granat

      Yes Montague, being in the zone and expanding on your core strengths is a key factor in becoming more productive rather than trying to improve our areas of lesser strength. You’re right that when you focus on your unique strengths the results will be outstanding.

    • Pingback: The 80/20 Rule Demystified | TalentCulture

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