The “80/20 Rule”

Misapplied and Misunderstood

Part 1

Inspired from the Pareto Principle, the 80/20 Rule has been a productivity trick that I first encountered reading Tim Ferriss’ 4-Hour Workweek, and it states that 80% of results are generated by just 20% of your effort. Since then, I’ve seen this principle being referred to in multiple productivity books. There’s even whole book written on it called The 80/20 Principle. It’s a beautiful concept but its applications to real life are typically exaggerated. From the book’s summary on Amazon:

Did you know, for example, that 20 percent of customers account for 80 percent of revenues? That 20 percent of our time accounts for 80 percent of the work we accomplish?

Truth is, real life doesn’t actually work that neatly. If you actually go through the work of distributing your efforts and their returns on a graph, there’s nothing that guarantees that it will pass through the 80/20 point.

Only one the green curve passes through the 80/20 point. All other red curves are equally plausible possibilities that do not pass through the 80/20 point.

It’s important to note that those who apply the 80/20 blindly will, in any situation other than the green one in the graph above, achieve sub-optimal results. Sometimes you’ll be achieving only 40% or even 30% of the result (the straighter curves). Other times you’ll acheive over 80% of the results, while you could have had a similar result with less effort (the rounder curves). I’ve seen plenty of people, including authors of best-sellers, who apply the “80/20 Rule” liberally, with no regards to the conditions.

So if the 80/20 Rule doesn’t actually apply to most real life situations, what makes it special?

  • It’s been demonstrated numerous times in the context of economy and in biology. However, just because it was observed in those particular fields in particular instances, doesn’t mean it applies to whichever part of your everyday life you want to make more productive.
  • It sticks in our mind; Round numbers that add up to 100 just feels right. Doesn’t make it more true, but it makes it easier to remember.
  • There’s a symmetry to this ratio. Whereas 80% of the results are achieved by 20% of the effort, the remaining results (20%) are achieved by the remaining efforts (80%). This leads us to the 80/20 Rule’s corollary: The 20/80 Rule. There’s some significance to this fact, and I’ll cover this in Part 2.

With a better understanding of the 80/2o Rule, how can you properly apply it to your life?

Applying the 80/20 Rule: In practice

In practice, for your everyday life, the Pareto Principle is an illustration, an allegory that makes it easier for people to remember something that we already know:

Things aren’t equally important; Focus on the most important things to be more more productive.

This should not surprise you, as it is mere common sense; we already apply this to our lives naturally. I suspect it is because we have limited time and resources, and so if we want to maximize the amount of fun we have, money we make, etc., we need to focus on what’s most important.

What’s not common sense (and thereby more interesting to me) is that if you consciously apply this principle in some areas of your life, by letting go of activities that have marginal returns, it frees you up. And with that freed up time and resources, you can double down on the activities that are most effective to potentially yield an even bigger return.

If you feel stuck in your productivity, consider focusing your energy on a fewer, more important activities; see if that doesn’t propel you to a new level of productivity.

As for determining which activities are the ones your should focus on, don’t just take the top 20%. You’ll have to use your judgement. But don’t just use your common sense or your intuition to select your activities — you’re already doing that. To work smarter, you need to be proactive about it: You need to make time to reflect and analyze your situation.

If you have the luxury of having data to measure the importance of each activity and you are mathematically inclined, then you can find an objective way of separating the important from the less important. I call it the point of inflection, and it can help you in the process. I’ll show you how to find it in Part 2.

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