The 80/20 Rule And The Importance Of Value
I’m a big fan of the 80/20 rule, but much like my other fave – Parkinson’s law – how to put it to use isn’t very obvious. 80% of output comes from 20% of input. 80% of my time goes into 20% of my work. Useful knowledge, but what next? Then I started viewing it in terms of value. 20% of the stuff in my life produces 80% of the value. The books I’m writing and this blog are worth my time and energy because I enjoy doing it and who knows where it might lead? The amount of time I spend keeping my home tidy, though, is a waste.
It’s been a while since I got all technical and did a snazzy chart, but say hello to the value/input matrix. Consider some of the work you’re doing right now. Where does it fit on the chart? Basically, for the amount of time and energy you’re putting in, is it worth doing? I used to spend ages trying to keep my home spotless everyday (as probably many of you do), but why? It had two people living in it, of course it wouldn’t stay tidy! That was high input for low value. Nowadays I dust when it’s actually dusty and wash the dishes when there is actually more than a couple of plates to clean. That made the task high value and low input.
- Low value (80% of your work)
Low value tasks are the most common type of work. They include such things as paying bills and filing paperwork away. Business is especially full of them (of course what is of low value to you, is often high value to the company in terms of safety, legal issues, etc.). If you have to put in lots of time and effort to do them too, that’s even worse. While you should attempt to cut out as many low value tasks from your life as possible, If you can’t do that look at how you can streamline or automate them. - High value (20% of your work)
This level is where tasks will make significant differences to your life. It might be a big hobby you indulge in or a large takeover you are trying to broker. In a lot of cases, you may have to put a lot of energy into something but at least the results are big. However, there is always scape for making the whole process easier to do because very often it’s this hard work that puts people off really doing something valuable.
There is a whole lot I could write about this that I haven’t even touched on here. What do you think of this idea? Does it make sence? Let me know your thoughts and maybe I can develop it further in a future post.
6 Comments
I gotta agree with Carmen on this one. I think the percentage level should be adjusted to your lifestyle, because the 80/20 rule may not work for everyone. After all, everyone is different. So if you are able to adapt it to your lifestyle and your needs, you can go a long ways for sure!
Yeah, the percentage level certainly isn’t fixed. It’s more a rule of thumb. The important thing to bear in mind is there there is a predictably uneven distribution in all walks of life, whether it be with sales, your wardrobe or your expenses.
Thanks for this thought provoking post. I too am a great believer in the 80/20 Principle. I have found it to be a very effective principle for almost everything I have done in life.
My personal work is in helping people promote entrepreneurship, especially baby boomer entrepreneurs. One of our first conversations is about the 80/20 rule. If one is to do planning, the first goal is to identify the result you want to create. That is followed by identifying the possible actions that can be taken to reach that goal. And thirdly, to identify the 20% that best contribute to probable success of the original goal. Of course, the final step is to take action and adjust until the goal is reached.
Like the other people leaving comments thus far, I agree that it is not always strictly 80/20. Sometimes it may be 75/25 or 85/15. The point is that the rule seems to apply to most of life and a lot of waste can be avoided by looking at how it applies to a specific situation, before diving into the work.
Interesting post and comments so far. Whilst I agree with what’s been said, I’d be interested to know how people actually focus on the vital few. It’s one thing to know that (approximately) 20% of customers cause 80% of the complaints, for example. Doing something about it is another thing altogether.
You’re quite right Tim. To put it in simplistic terms, I find when you cut out the low value 80%, you automatically focus on the remaining 20% because… well, that’s all that’s left. Plus, the value you get out of it gives you all the motivation you need to stay focused on the vital few.
The trouble is, most of the vital few are the hardest things to do, they test our resolve the most and may take a lot of thought, initiative or even courage to complete.
Solution? Obviously there’s no ‘one size fits all’ answer, but I find it helps to do a chunk of it at a time. For example, say I have identified a meeting with my boss as one of the tasks for the day that will have the most bang for buck value. What if I can’t summon up the resolve to meet with him or her? Break it down and perhaps schedule an appointment for another day.
As I said, there’s no perfect solution, but taking action on the 20% of activities that produce 80% of the results doesn’t always have to be done in one go.