80-20 Rule

In the 19th century, an Italian economist named Vilfredo Pareto discovered that 80% of the value of a group of items was concentrated in only 20% of the items. This was a startling result because he expected a much more even distribution.

The 80-20 rule appears in a lot of different areas. For example:

• 80% of all our e-mails probably come from 20% of all our e-mail contacts.
• When we watch TV, we probably spend 80% of the time watching 20% of all programs.
• When we go out to eat, 80% of the time we probably choose from 20% of the items on the menu.
• When driving, we probably spend 80% of our time on 20% of all the roads we drive on.
• 80% of all the money we spend is probably spent on 20% of all items we buy (especially if you have a big house payment!)
• 20% of all our customers provide 80% of our revenue. Also, 20% of our customers require 80% our attention. (Unfortunately, they are usually not the same ones!)

Of course the ratio might sometimes be 70-30 or 90-10 but the principle is still the same.

Now, where this principle is especially important to us is that it shows that there is a big difference between the amount of work we put in and the results we achieve. We can achieve 80% of our results with just 20% of our effort.

Wow! If you think about this, it is really amazing so let me say it again: “The 80-20 rule says that 80% of our results can be achieved with 20% of our effort.“

How can this be? Let me give you an example.

My Miata is dark blue and shows dirt easily. When it is clean, it looks pretty good even though it is an older car. However, when it is dirty, it looks pretty bad.

One day, I decided to really clean it up. I first got out the hose, got a bucket full of soapy water and gave it a good wash. I then used some nice clean towels to dry it (Suzanne wasn’t too happy about that!) Then, I got out the wax and waxed the whole car and buffed it off. Afterwards I used Armor-All to clean all the plastic and vinyl. Finally, I vacuumed and cleaned the whole inside.

This thorough cleaning took about 4 hours but boy, did my car look good!

The next month, it was dirty again. I didn’t want to spend another 4 hours cleaning it this time so I took a slightly damp, terry cloth towel and wiped all the dirt off. Then I cleaned the most important things inside. It took me only about 20 minutes to do this and when I was done it looked pretty good. Of course, it didn’t look as good as before but it looked probably 80% as good and it took me only about 10% of the time.

Can you think of other areas where the 80-20 rule can really save us some time at work? Here are some:

• When doing tech support, e-mail instructions for fixing a problem rather than walking someone through it.
• If writing an e-mail to another team member, don’t use fancy fonts or formatting or worry too much about spelling or grammer, just send it.
• When writing a new program, see if we have a program that does something similar or search the internet for it rather than starting from scratch.
• Buy a PCI core or a PCI ASIC rather than trying to design all the PCI functions ourselves.
• When doing a broadcast email, send the same information again rather than trying to write something completely new.
• When reading a magazine, only read the most important articles. Also when reading a book, only read the most important sections.

Of course, there are times when 80% is not good enough and we need to put in the extra effort to get something to 100%.

This is the case when we are releasing a new product. Once a product is 80% finished, it is easy to think we are almost done. However, we soon discover that completing all the details to actually get the product out the door can easily take 80% of the total effort.

The real power of the 80-20 rule is to realize it exists and always think of ways to use it to our advantage.