Ever heard the saying getting the “greatest bang for your buck”. In many fields it is essential to maximise output whilst limiting input and for many of us the input is time. At work we want to make sure that we complete what we need without spending hours at our desk or when studying to pick up as much as possible in the least amount of time. In this video I will talk about the 80/20 principle and how this can help you maximise productivity.
The 80/20 rule also known as the pareto principle states that in many cases 20% of the inputs lead to 80% of the results. Vilfredo de Pareto an Italian sociologist and economist, first realised when looking at the Italian population and wealth. He realised that 80% of the land in Italy was owned by 20% of the population. Upon studying other countries he found the same applied. This observation can be applied to many things we see. Yes of course it will not be exactly 80/20 it may be 75/25 or 70/30 but the point still stands, things are not distributed evenly and a small amount of inputs relate to the majority of outputs.
Let’s think of few different examples or phenomena we see:
- In online sales 80% of sales are correlated with 20% of retailers (think Amazon)
- In investing 20% of the portfolio are typically responsible for 80% of the portfolio growth
- In production quality control 80% of problems can be attributed to largely 20% of production defects
So how does this apply to us. Well the same can be true off time management and studying. 20% of the things that you learn can often give you 80% of the result whilst the remaining 80% has less and less value. If you are able to find the 20% this is where you should focus as this will give you the biggest bang for your buck.
At work this is true too, where 20% of the things you work on will give you 80% of the outcome in your year end review. What I am not saying is ignore the 80%, what I am saying is we can be smart about where we place our limited time and resources. Commit more to the areas that are in the 20% and less to those in the 80, don’t ignore them entirely. A business may have 80% of its revenue coming from 20% of its customers, to maximise impact it could allocate a dedicated person to each of the customers that make up the 20% and then less people to focus across the remaining 80%.
By using this concept we can maximise productivity and output with the inputs we put in. In language learning for example, majority of the words that are used in daily life and everyday speech actually make up a small percentage of words in the vocabulary
So how do you identify the 20%, well it differs from each situation. In the business sales examples, this can be looked at through analysing the sales numbers. In languages you could look at word frequency lists. If studying for an exam then looking at past papers you can see which concepts come up the majority of the time. In several other examples, it can be identified through experience.
For me I think the most important thing is awareness of the rule and thinking about it in different situations, at work think about what is valued by the business and which of the 20% of your tasks will contribute most to this. Do the remaining 80% but focus your efforts on the 20%. Sometimes you will have to take an educated decision on where the 20% is, if there are ten articles to read, focus on two with the titles that you think are most valuable. Skim the rest.
Hopefully this will help you maximise your productivity and free up more of your time. Let us know in the comments any examples of your life where you have seen this 80/20 principle in action.
I’m Matt and let’s reach itt!
Lifestyle
