80/20 Thinking Will Change Your Life

“Why do a minority of pea-plants in my garden produce the majority of the peas? And how come 20% of the population in my Italian village owns 80% of the land?”

These questions took root in the mind of Italian economist Vilfredo Pareto in the mid-1890s, intriguing him enough to subsequently develop the Pareto Principle – also known as the 80/20 rule – after repeatedly observing a pattern of unequal distribution when examining the wealth of other Italian villages as well as larger cities in Britain, Germany and Switzerland. 

What’s truly incredible is that this pattern persists beyond just wealth distribution analysis. It’s been demonstrated that a minority of ants in a colony account for most of its productive work. Around 20% of quality control issues in an organisation drive 80% of customer complaints. Sometimes it’s even more skewed – less than 10% of JSE-listed companies (i.e. the Top 40) account for 80% of its total market value, and just four firms (the Big 4) audit almost 90% of large public companies in the USA. 

Why does this happen? It’s obvious that the drivers of most displays of the Principle are disparate – for example, the reasons behind the top 20% of NBA players scoring 80% of total points and similarly just three countries producing more than half of global CO2 emissions are totally different and intrinsic to each situation. There is also no “All is Pareto” law that can be copy-pasted to every set of circumstances. As best explained in Richard Koch’s titular book on the topic, the simple analysis that a minority of inputs seem to repeatedly drive the majority of results is the keystone for revolutionary thinking. 

Something that worked wonders for me in practice is to try re-frame your observations and seek to identify the Pareto Principle in action in your everyday life. You may begin to notice that perhaps only 20% of your workday contributes to 80% of your productive output. It’s probable that a minority of your clients contribute to the majority of your revenue (as well as your complaints). You may even find that just 20% of your daily routine drives 80% of your “daily happiness/misery”, whether it’s an hour of quality time spent with a loved one or instead commuting in traffic.  

Once you’ve identified the drivers, the next step is to double down on the 20% – after all, why would you spend more time, money or energy on the 80% that results in minimal marginal output? It’s in the 20% where the magic resides. With some time for practice and implementation, you’ll be astonished at both how much fluff can be eliminated from your life and consequently how much freer you feel. Ultimately, keeping the Pareto Principle in mind is an easy way to get more out of the resources you already have available – whether peas, people or time.