The 80/20 Rule for Increased Efficiency

A very helpful rule which can be broadly applied in business, to one’s job or to life to increase efficiency and get “more bang for your buck” is called the 80/20 Rule, or “the vital few and the trivial many” (also known as the Pareto Principle).

80-20-1The concept of this principle, applied to productivity, is that  80% of the results of your work comes from 20% of your efforts. In other words, 20% of “vital few” actions will produce the greatest results. The other 80% of your efforts are usually spent on activities that produce only 20% more in results (the “trivial many”).

One way of looking at this is in relation to the sale of products or services – 80% of sales tend to come from 20% of the products/services you offer, or from 20% of your customers. A bank sells many more regular checking accounts, and has many more regular checking account customers, than it has high-value certificates of deposit.

Another way to apply this principle is to understand that 80% of your difficulties come from 20% of your tasks. Try to80-20-2 identify the very time-consuming duties that must be done but which don’t yield much in the way of results. There may be a way to reorganize these activities so they don’t take so long, or to reschedule your time so the majority of your work is done before you tackle these “low-yield” tasks.

Use a systematic approach to identify which areas of your job are creating the most difficulty and how to make them simpler. Rather than a quick fix, go for a solution that permanently improves the task or situation.

Alternatively, if you can identify which 20% of your work activities produce the greatest results, then you can concentrate on those first. A way to do this is to look at how much time you must spend on an activity or task in relation to the importance of its results.

When you have accomplished these 20% activities or they are rolling, then look at the remaining 80% of your normal efforts or activities. Then select the next 20% of these activities that will achieve the most results.

This represents an additional 16% of your total work effort (80% X 20% = 16%). Decide which of these will produce the most results and do them. You will have accomplished 96% (80% + 16%) of your work results with just 36% of the time and effort!