Hi, Joel. Yes, I generally agree with this rule. In fundraising, 80 percent of the total given typically comes from 20 percent of an organization's donors. It may even be closer to 90/10 for some nonprofits. Great question!
Melanie

posted June 23, 2008

In deploying computer systems I have often found 80% of the functionality takes 20% of the effort.

posted June 23, 2008

I thought the rule was 90/10. 90% of the work is done by 10% of people sort of thing?

posted June 23, 2008

The 80/20 rule, also known as "Paretto" rule, states that 80% of the impact is generated by 20% of the causes or actions. This is clearly a very powerful rule, and it does apply to most aspects of life. In work, 20% of the tasks are going to consume 80% of your time. In social life, you spend 80% of your time with 20% of your friends and family group. Of course, 80/20 is just nice general rule of thumb to use, but the principle is always valid: A small portion of just about anything will most likely represent the majority of the total impact.

posted June 24, 2008

20% of my past decisions directly impact 80% of my life--therefore I am learning to become more aware of those high impact decisions and act cautiously.

posted June 24, 2008

20% of the effort gives 80% of the results. 100% of the time divided by 20% gives us potential 5 "slots" that can be filled with result-yielding effort. Add them up and you'll end up with 400% of regular productivity :). Of course this is a really generalized and simplified application of the rule, but it shows what can be done while having it in mind. Prioritize, if you can!

While the rule does not necessarily boil down to 80/20 ratio every time, the principle remains the same.

Other applications that I can see:
- 20% of decisions influence 80% of the strategy
- 20% of the movie bring you 80% of the experience
- 20% of the products sold bring 80% of the income
- 80% of the support time is spent with 20% of customers
- 80% of failures are caused by 20% of types of problems

At Google, employees spend 80% of their time working on assigned projects, and spend 20% on their own projects - there must be something in it, too...

posted June 24, 2008

I use it for focus. What are the two most important things I do for my business each day? What are the two most important things I do for myself, my family etc. It helps me choose and prioritize.

posted June 24, 2008

According the theory of 80/20 : if you sort your work in decending order and try to finish first 20% of the tough work then you will achieve 80% of result.

posted June 24, 2008

Joel,

From a management perspective, it is amazing how true Pareto's Rule of 80/20 applies. 20% of your staff will take 80% of your time if you let them. Once you know this, it is easier to spot the pattern and address those 20% of your team and coach them to better, less time intensive performance.

On a more personal note, I spend 80% of my free RPG gaming time killing insignficant creatures and 20% on the Bigger Bosses. This just proves an interesting idea that I will spend lots of time trying to earn the big prizes if the ratios are not substantially higher than the 80/20 split.

And finally, during the school year I say NO about 80% of the time to my teenagers, but during the summer it switches to about 80% YES. Do you think the payback when school is out, matches my RPG gaming experience in a weird manner? It certainly draws a parallel.

posted June 25, 2008

20% of the sales people make 80% of the total sales in a given sales organization.
Sometimes it can be 10% - 90% or 30% -70%, but it's almost always that way.

That means that somebody is not doing the job. 80% of the actual sales force of the world is sadly but truly wasted.

Ramon

posted June 25, 2008

Hi Joel,

For me the rule of 80/20 works better in professional life than in personal life. Atleast in work life I apply it Consciously. At work 80/20 helps me prioritise my time and efforts and focus on the vital few which give greater results. Example I focus on 20% activities which give me 80% results. This helps prioritise.

In personal life one is not required to be as focussed as in professional life. But yes, sometimes at home when my to do list is a long and I am short of time, 80/20 works. I pick up the top 20% tasks which take 80% of my time and finish those first. Helps manage time better.

regards

Rajshree

posted June 27, 2008

The 80-20 rule, Haddad's Theorem, or Pareto principle
http://en.wikipedia.org/wiki/Pareto_principle
is also related to several other principles, like the 'Iron law of oligarchy' and 'tipping point principle'.

You might observe this as individual or as group. In other words, not all your work is impacting other people or will change your working style; or only a few persons in a group will impact the whole group.

Based on other social systems like 'Who writes Wikipedia?' or 'open source development' it was already shown that the rate is lower, potentially even below 10%.

Finally, in general, I am a little skeptical about the story about how people define an 'impact'. If an impact is a certain direction, the 'impact' depends on your standpoint, which also explains, that work is not lost, but might just not go in a direction some authorities might define as 'positive impact'.
For more examples on this I refer to a recent discussion of Dr. Theo Wallimann in a Nature article or Derek's blog
http://www.nature.com/nature/journal/v452/n7190/full/452935a.html
http://pipeline.corante.com/archives/2008/06/19/anarchy_in_the_eu.php
http://pipeline.corante.com/archives/2008/06/25/no_anarchy_in_the_eu_a_report_from_inside.php
http://pipeline.corante.com/archives/2008/06/26/funding_in_the_eu_the_simple_way.php

Please note that 'The Three Princes of Serendip' survived only by collecting undirected (random) information, which made only sense in a long-term global picture.
http://en.wikipedia.org/wiki/The_Three_Princes_of_Serendip

Links:

• http://en.wikipedia.org/wiki/Iron_law_of_oligarchy
• http://en.wikipedia.org/wiki/The_Tipping_Point_%28book%29
• http://www.aaronsw.com/weblog/whowriteswikipedia

posted June 27, 2008

The 80-20 rule is the Pareto principle, named after Italian economist Vilfredo Pareto who studied income distribution in Italy.

In my experience, it is a valid rule of thumb in almost every aspect of life and commerce, give or take 5%-10%.

More info at link ...

Links:

• http://en.wikipedia.org/wiki/Pareto_principle

posted June 27, 2008

Find the 20 percent that contributes the most to your life. Don't follow the herd, because that's where the 80 percent is.

posted June 27, 2008

Great question Joel!
I apply the 80/20 rule by listening more and talking less!
Superb! It does work!
I apply this when I am with clients, with the team and every where else when necessary.

Best Regards

Marieme

posted June 28, 2008

Ah, Pareto...
20% of the congregants in my church tithe 80% of the total donation every week;
80% of my volunteer work at the church is spent creating media for 20% of our diaspora;
80% of the time I'm consulting or advising others is spent listening, the other 20% is spent offering solutions;
80% of my schoolwork is done in 20% of the alotted homework time;
80% of the fat on my body came from the 20% of my food that comes from restaurants, lol
80% of my cell phone minutes are used on 20% of my friends;
80% of the men I go on a first date with don't get a second one, and
80% of you won't read this post. lol!

Smile!
MD

posted June 28, 2008

Personally, I don't think that this notion of 80/20 really truly applies to very many situations. However, as soon as people are presented with this convenient idea, they start perceiving reality accordingly.

While there are differences in performance between individuals and groups over time, it's not really 80% of the results that are produced by 20% of the employees. For example. If that was the case, why isn't performance rewards and incentives divide along the same way instead of the otherwise popular ideology of using Bell-curves?

Do these groups that we measure not have to be representative of the population for this notion to work?

Nor is 80% of the wealth owned by 20% of the people.It's a lot more uneven. 80% is owned by a much smaller group of people - but again it depends on how you measure it. Globally or in some homogeneous middle-class western-hemisphere neighborhood or by country? Is it by nominal income exchanged to USD or by purchasing power? Does it compensate for the enormous differences in real-estate price and value?

Nor is it 20% of the effort that creates 80% of the functionality of a new IT system. But when you think along those lines, you adjust your assessment and evaluation of a % accordingly so that it may fit. The reality is that the complex or contentious functionality simply takes longer to develop. How do you weigh simple functionality vs. complex functionality? If you have this rule in mind, you will make it fit 80/20 split.

Certainly, it's always good to keep in mind how to most effectively spend your time and expend more effort on the most valuable activities and this 80/20 idea can be useful in reminding us about it. But beyond that, it's a rather superficial assertion about a very complex reality that does require a lot more empirical backing to really be worthy of it's "rule" status I believe.

There is an inherent danger of bias and prejudice when assuming that new contexts conform to this 80/20 idea. It can severely inhibit our ability to see complexities and when you think about it, what more do you need to get out of this than being reminded to use your time and efforts where it's most valuable (no matter what standard you hold the word "valuable" to?).

But that's just me :-)

posted June 29, 2008

I think we are actually moving towards a point that this is actually the 90/10 rule across the board.

Even though are responsibilities have gorwn, we are judged harder and harder and harder on less and less information.

We send out more information and more requests and get fewer responses from a more concentrated group of people.

So yes, other than the severity of the situation, I agree with the substance of your statement.

posted June 30, 2008

If the 80-20 rule applies, then 20% of the time this rule should be most impactful for 80% of the phenomena being analyzed.

posted June 30, 2008

Lately I've been reading the book by Rolf Smith - The 7 Levels of Change - Different Thinking for Different Results. He often refers to this rule of how people in companies (and in their personal life) waste a lot of time on the 80% of things that have little effect compared to the 20% of things that can cause a major impact. So, it is fun to re-evaluate issues and sort them to find out which can have the most impact and then really focus on the 20%. The 80% are reassigned at a later date or delegated. This process can certainly be helpful in looking at budget cutbacks as well as areas of improvement -- esp. in the non-profit world.

posted July 7, 2008

Hi, Joel - interesting question.

I'll let the other folks give you examples of when the 80/20 rule appears to be applicable, but I do have two comments.

1) This rule, which arose some centuries ago, appears to be based on the belief that things have to equal 100 - which they don't, since we are not talking about a complete entity.

2) The general idea that a very large amount of some outcome (efforts, benefits, issues, for example) is related to a relatively small amount of something else (work or people, for example) probably has some basis in reality.

I just don't believe that it is a rule that can be illustrated as "80/20". Life is not that tidy.

Let the stoning begin . . . .

John S.

posted June 23, 2008

80% Linked In questions are left for others to answer, I pick maximum 20% from a page/subject.

80% work is done by my team members, I do 20%.

80% thinking is done by others, I do the rest.

I save 80% of what I earn or learn, spend or share 20% to live frugally and respectfully.

I use 80% human energy and 20% expensive fuel/electricity than others. My environment is not spoiled by me, and I get good digestion and maintain appetite for good food.

I believe maximum 20% people are not so good, and I avoid them; I live with 80% good and common people.

I use 80% common sense in solving an issue, but need to use other senses 20% of the time.

posted June 23, 2008

Out of 100% of my time, I work smartly. Work 20% and Socialize 80%, which makes my work perform better 100%.

posted June 23, 2008

20% of the projects contribute 80% of the company's revenue.

And when your workers achieved 80% of their performance, I consider that it's good enough. :)

posted June 24, 2008

80% of conventional wisdom is wrong, the remaining 20% is merely questionable

posted June 24, 2008

20% of my ties get 80% of the use.

posted June 26, 2008

I try not to bog myself down with rules and just concentrate on the things that matter to me and that I can influence.

posted June 27, 2008

The problem with the 80/20 rule is that there's also a 20/80 rule. I do 80% of my work in 20% of the available time. But then I need 80% of my time to do the remaining 20% of the work.
20% of your customers provide 80% of your revenues. That means you need to spend 80% of your resources to bringing in the remaining 20% of small customers. You can't win :-)

posted June 28, 2008