What is the 80/20 rule?

  

The Man Behind The Concept:


Pareto, who developed the 80/20 principle, was born in Italy in 1848. He noticed in his garden that 20 percent of the pea plants produced 80 percent of the healthy pea pods. It forced him to focus on the uneven distribution. 

It was revealed through his own studies that 80 percent of the land in Italy was owned by 30 percent of the people. Upon investigating other industries he found out that 80 percent of the production came from 20 percent of the companies. This gave him the idea that 80 percent of the outcomes happen because of 20 percent of the action.


What is the 80/20 Rule?


As a result, the Pareto Principle or 80/20 Rule refers to the imbalance between inputs and outputs. There is often an imbalance in business cases such as:

  • Almost 20 percent of the sales reps generate 80 percent of the total sale
  • Almost 20 percent of the customer’s account for 80 percent of the profit

People and organizations that are successful know how to apply the 80/20 rule. In business, it is of greater importance since 20 percent of the customers generate 80 percent of the revenue. Using this principle, you can achieve more with less effort, time, and resources. Identify and focus only on 20 percent of the work that matters.


The benefits of 80/20 rule – Pareto Principle:

According to the 80/20 rule, a small percentage of what you spend your time on matters most. When you focus on those things, you can unlock the enormous potential of the magic 20 percent. This course helps you to boost your effectiveness at work, in business, and in your personal life.

In order to apply the 80/20 rule in your life if you are an executive, you need to understand the projects that are important. It is because as an executive, you are faced with the constant challenge of limited resources. You need to maximize your time as well as the time of your entire team. With the Pareto approach, you will understand which projects are most important? What are the goals that value the most? And which specific tasks you need to focus on in order to align with your goals. Delegate all the ones that are important and drop the rest.

If you are a freelancer then it is important to know who your best clients are. Concentrate on strengthening the professional relationships that are good sources of income. Otherwise, you will suffer burnout and lose motivation to keep up with quality work.

Being an entrepreneur, you are tempted to try new and exciting things. There is nothing wrong with that but you need to focus your energy on the real goals. With an 80/20 mindset, you will stay focused on your goals and will spend less time chasing new endless opportunities.

Conclusion:

It is very important to spend time in research, getting things right before starting that particular work. By spending 80% of the time getting things right, you will enjoy 80% of results by only exerting 20% of effort in a long run.

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