The 80/20 Rule and it’s application

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I have read a lot about it and I just still don’t understand it. I feel incredibly stupid whenever I see it come up somewhere and I know it’s name and I know that I’ve read about it, but I still don’t know what it is.

This has gone on for almost a year now.

Help.

In: Other

80% of the effects come from 20% of the causes. Look at a workplace. 80% of the work gets done by the same 20% of the people.

In most places, 20% of something will account to 80% of usage.

For instance, 20% of the English words will make up 80% of the English language.

And this is followed in almost every language.

Another example is 20% of people will have 80% of the total money in the world.

[The Zipf Mystery](https://youtu.be/fCn8zs912OE) by Vsauce is an amazing video about this.

It’s kind of crazy when you think how mathematically accurate this is in almost every language.

This is related to time management and prioritization. If you are solving issues, spend your time on issues that happen 80% of the time and ignore issues that happen only 20% of the time.

In rugby football league, if the attacking team’s player in possession is behind his 80 metre line and kicks the ball forward into a legal area of play and it then bounces out of play in the sidelines past the opponent’s 20 metre line, then the attacking team are awarded a tap restart where the ball went out of play… Or something like that!

Its a little like murphys law. Like 80% of your problems come from 20% of you’re processes.

Or 80% of your complaints come from 20% of your customers. Most of them don’t complain much, but the ones who do complain a lot.

No. We discuss this from a Church setting where it should be expected to have 100% participation always. Doesn’t usually work that way. It’s always the same 20% doing the work. There are a lot more coasters than doors in life. Look at how often we see the post here about what jobs require the least effort. When is the last time you saw a post asking which jobs require maximum effort?

I’ve always understood it to mean that in any project or task, completing 80% of the work requires only 20% of the effort. The last 20% of the work that needs to be done is where most of the effort lies. Of course this is more like general guidance for time management and task prioritization rather than a hard-and-fast rule about how things really get done. It does help explain why so many projects are left unfinished, or end up ultimately half-assed even though everything was moving along perfectly for a lot of important milestones.

Rarely is everything going to be equal across the board, say a business’ revenue from customers.

Let’s say you open a burger stand. You’ll have some customers who come once because they are passing through town. Some who come in very rare occasions. Some who stop in from time to time. And you’ll have your hardcore regulars… these people come in weekly, maybe even more. And maybe they are also bigger ticket customers getting 2 burgers at a time and adding a shake on most visits. Because you don’t have to keep marketing to get them through the door, and because marginal profits grows as the ticket grows (it doesn’t take that much more work to make 2 burgers instead of 1 when assembling an order, but you charge the same for the second one) So even though they might only represent 20% of all customers you serve in a year, they end up being way more than 20% of revenues, end up representing 80% of your profits.

The 80/20 rule, or Pareto Principle, isn’t a law of nature like E=MC^2 . It’s more of a rule of thumb that provides a “first guess” estimate when analyzing a situation.

Assuming you don’t know anything about the situation, you can fairly safely guess that 20% of the cause makes 80% of the effect. For instance, you could guess that 20% of drivers cause 80% of accidents, 20% of your customers leave 80% of your complaints, 20% of your birthday party guests eat 80% of the cake, etc.

For instance, a programmer could use it to convince his boss to let him re-build some old code – after all, 80% of the bugs are probably caused by only 20% of the code.

The Pareto Principle is definitely not a substitute for real in-depth investigation – just a way to think about a situation. It means that in many situations, you can prevent 80% of your problems by focusing on the worst 20% of the people and things that cause them.

It’s also not even the best estimate. Businesses often use a 20-100-20 rule – for instance, the top 20% of customers contribute 80% of the profits, but the bottom 20% of customers actually lose the company 20% of their potential profits.

Statisticians use a much better estimate called the 68–95–99.7 rule or empirical rule. In most sets of real-world data, about 16% will be very high, 16% will be very low, 2.5% will be extremely high, 2.5% will be extremely low, 0.15% will be “off-the-charts” high, and 0.15% will be “off the charts” low. This rule applies to people’s IQ and height, household incomes, rolls of two or more identical dice, and tons of other examples.

I could write a really long explanation about 80/20, but I think this should get most of my point across.