120 years ago, an Italian economist named Vilfredo Pareto discovered a similarity between the landowners of Italy and the peas growing in his garden. This observation led to a now common rule of thumb in business known as the Pareto principle.
You may have heard it called the 80-20 rule.
Pareto made his initial observation by looking at the distribution of land ownership in Italy. What he found was that 80% of the land was owned by 20% of the people. Not a surprising observation in itself, but when he looked at other countries, he found a nearly identical distribution of ownership.
In his garden, Pareto observed that 20% of his peapods produced 80% of the peas. An oddly similar distribution. Why would these unrelated observations be so similar?
In fact, there are examples of this ratio from every facet of life.
- The richest 20% of the world takes in 82% of the income. [Source]
- In the United States, 20% of healthcare patients use 80% of the resources.
- Microsoft reports that 20% of their known bugs are responsible for ~80% of their crashes. [Source]
- and so on…
As I’m sure you’ve guessed, there’s nothing weird going on here. There’s no black magic forcing this into place. The reality, obviously, is much more mundane.
Ok, maybe it’s a little bit like black magic.
This effect comes about due to nothing more than a power law relationship between the two quantities, where “a relative change in one quantity results in a proportional relative change in the other.” Skipping the math, what this really means is that the two quantities look like this if you graph them against each other.
You have likely seen a graph or two with this type of distribution before. The green part of the graph represents only 20% of the x-axis but accounts for 80% of the total area under the curve.
In actuality, there isn’t anything special about this specific ratio. ‘The 80-20 rule’ as a saying is easy to remember, but it’s just the split that arises from a standard distribution of results. It could just as easily be ‘the 80-10 rule’, the gist is the same: a small percentage of actions produce a disproportionately large portion of the results.What This Means
What This Means
This rule is well known in the business world for its applicability as a rule of thumb for optimization. It’s valuable because it doesn’t just apply to one thing; as we’ve seen above it applies to many different areas.
If you’re a knowledge worker, I can almost guarantee that you spend a small amount of your working time actively working on things that are responsible for the majority of your results. Your job performance depends on getting great results at a few particular things and getting by on the rest.
Most of the emails you send are probably unimportant, but a few of them may be vital. If you spend all day responding to email (or in meetings) you’re probably doing something wrong.
Similarly, most of the studying that you do is probably worthless. If you’re trying to learn a new language, for example, you shouldn’t be spending time memorizing esoteric vocabulary. Native English speakers probably have a vocabulary of ~15,000 words, but the most common 1,000 words account for greater than 80% of the spoken language. The top 100 words are a full 50% of all English spoken. If you’re bothering to learn the word for ‘apple’ before you learn those, you’re doing something wrong.Learn the grammar and the most common words first and you’re on your way to learning a new language. All it takes is a small amount of research and planning.
Learn the grammar and the most common words first and you’re on your way to learning a new language. All it takes is a small amount of research and planning.
OK, So What?
Amusingly, while the upper part of this article is good background it isn’t entirely necessary to our conclusion. While I spent a while expounding upon why it’s a thing, the entire article can be summarized in 2 sentences.
Most of the things you do have little effect on your desired outcome. A small percentage of your actions (maybe 20%, maybe less) contribute to the majority (80%+) of the results.
This leads to the single most useful rule in productivity: Think about the actions you take before you do them.
Figure out what has the largest effect on the outcome you want, and reduce everything else. Ruthlessly eliminate the work that is inefficient and ineffective at getting to your desired result. There are better ways to spend your time.
This topic is a core principle of the best business book I’ve read in the past year: Deep Work by Cal Newport (who also runs the Study Hacks blog). The entire book is about the importance of maximizing time on your most impactful work, and on strategies you can take to do so. I highly recommend it.