The 80/20 Rule, famously known as the Pareto Principle, postulates that 80% of our output comes from 20% of our efforts. This applies to all aspects of life . For example, students working on group projects are likely to see 20% of the group members doing 80% of the work. Worldwide, less than 20% of the wealthiest control more than 80% of the wealth. Fewer than 20% of scientists come up with more than 80% of scientific breakthroughs.
In his book “The 80/20 Principle”, author Richard Koch argues that modern life is too hectic for our well-being. People pursue monetary activities relentlessly. However, in the pursuit of more money and more luxuries, they end up having no time or energy to enjoy the fruits of their labor. So, Koch argues that we should learn to apply the 80/20 principle to key areas of our lives to make it more rewarding with less effort.
According to Koch, the 80/20 Principle is based on 2 laws- the law of focus and the law of progress.
The law of focus refers to the idea that less is more. When we focus on fewer activities, the quality of our focus improves which helps generate higher-quality output.
The law of progress refers to the idea that we can get more for less. We can achieve more of what we want with less time, effort, money, and energy. For example, centuries ago, a large amount of land and a large number of workers were dedicated to agriculture in today’s developed countries. However, today, the same countries devote a much smaller amount of land and a smaller number of workers to agriculture, but generate a much larger output. This has been possible due to technological innovation.
Koch argues that we should apply the 80/20 Principle to five key areas of our life- ourselves, work and success, money, relationships, and a simple, good life. To that end, we need to follow the following steps:
Step 1: Identifying our goal/destination
Step 2: Identifying the easiest and most productive route to achieve that goal. To do this, we should jot down all the possible ways of achieving our goal, then compare all our options to find the most effective one considering the level of effort needed and the reward from it.
Step 3: Taking action based on our selected route
For example, if our goal is to learn coding and start earning money as soon as possible, we have several ways of fulfilling our goal. One way is to enroll in a BS in Computer Science program, but that would be time-consuming, expensive, and strenuous. Another option would be to enroll in an online course, which would be less demanding in terms of time, money, and effort. Considering that tech companies like Google and Microsoft no longer require degrees from employees hired for coding, a BS in Computer Science would be redundant. One should opt for joining an online course.
Similarly, we should apply the 80/20 rule to relationships as 80% of our satisfaction comes from less than 20% of our relationships. So, we should nurture the relationships which gratify us, instead of wasting time on those which are of no value.
The same holds true for income-generating activities. If a business is able to identify a few products that generate most of its profit, it should focus on increasing the production and sales of those few products and move away from the production of less profitable products.
The main aim of implementing the 80/20 Principle is to focus on what’s beneficial for us by cutting back on activities that are of little to no value. This will facilitate a fulfilling life in which the fruits of our labor are maximized.