What is the 80/20 Rule? (Short and Simple)

Last week I wrote a post about how to properly introduce people, and I mentioned I was using the 80/20 rule as a paradigm for approaching my how to.

But what is the 80/20 rule exactly? And why should we care?

When I hear the 80/20 rule referenced in a group situation, I always notice at least one blank face in the room. But of course it is rare that the unindoctrinated actually ask, because there are others in the room tracking right along, and interrupting to ask at that point feels awkward.

Well, be lost no more, friends. Today we unpack the 80/20 rule.

Definition of the 80/20 Rule

The 80/20 rule (more technically known as “the Pareto Principle“) says that, “for many events, roughly 80% of the effects come from 20% of the causes.” (Wikipedia, 22 July 2012)

For example, according to the 80/20 rule, we would expect roughly 80% of a company’s profits come from 20% of their hours spent or that 80% of that clean-house feeling comes from 20% of your house-cleaning efforts.

Another Contemporary Definition

In contemporary usage, the 80/20 rule also refers to the common scenario where 80% of ownership or outcomes stem from the top 20% of an ordered group.

Examples of this would be observations that 80% of the world’s wealth is owned by 20% of its inhabitants, or that 80% of a company’s complaints come from 20% of its customers, or that you spend about 80% of your time with about 20% of your friends.

It’s a Generalization

The 80/20 rule as Pareto introduced it has been studied at length and has a good bit of statistical backing. But on the whole, when everyday sorts of folks reference the 80/20 rule, they are making a generalization. They’re encouraging others to spend their time more efficiently by focusing on the 20% of actions that yield the biggest results, or pointing out that dropping the 20% of your acquaintances that eat up 80% of your energy might just save you some grief.

And whether or not the numbers would actually come out at exactly 80/20, the reality is that many people intrinsically identify with the general sense of the principle as applied to an incredibly broad range of topics. Which means it will probably be a part of our culture for many years to come.

And So…

I suppose you could possibly go the rest of your life and never again hear someone refer to the 80/20 rule. But my guess is that now that you’re familiar with it, you’ll notice it referenced all the time. And now you’re in the know!

Is there anything else you regularly come across but don’t know what it is? I’d love to hear it!