The World Turns 80/20 AudioChapter from 80/20 Your Life AudioBook by Nick Trenton

Speaker: 00:00:00

80-20 your life, get more done with less effort, time, and action, written by Nick Trenton, narrated by Russell Newton. Imagine the following scenarios. You need to pick some clothes to wear at home from your wardrobe. Out of all the casualwear you own, how likely are you to choose that one favorite top or T-shirt you always wear despite having loads of other options? One theory suggests that you actually only wear the same few clothes in rotation, and your choice will likely be restricted to those clothes. You may not even consider any of the other options unless you’re looking for a change. Yet those ’80s band T-shirts and ripped sweatpants are still taking up room in your drawers, leaving your space crammed and disorganized. Here’s another one.

Speaker: 00:00:49

Think of all the apps on your phone, and how many of them you actually use regularly. Maybe you’re the kind of person who only keeps the most essential ones, but if you were to check your usage statistics, you’d probably discover you use the same few apps over and over, with the rest taking up only limited portions of your time. These other apps are using up valuable space in your phone, and may ultimately cause it to run out of storage or work less effectively if you don’t take the time to clean them out. Now think of all the creative ideas you’ve ever had when it comes to your work or studies. If you’re an entrepreneur these ideas could be about what kind of business to start and how to grow or improve your existing one. If you’re a writer these might concern the topics you think are worth writing about, and so on. In all honesty, how many of these ideas have been genuinely viable? It’s probably only a minuscule percentage.

Speaker: 00:01:48

Let that sink in - most of the clothing in your wardrobe, the apps on your phone and the plans you spend your time daydreaming about don’t actually end up being all that important. Rather, it’s only the tiniest fraction of your ideas, items, actions, etc. that really matter. What do all of these scenarios have in common? They suggest that in different areas of our lives, a small minority of things are the most important. Be it the technology we use, the objects we own or the ideas we have, the same few patterns repeat themselves again and again. We use the same apps, implement only a few of our ideas, and we generally wear the same handful of clothes from our wardrobe. And yet, our wardrobes are still overflowing, our phones are crammed full of apps we don’t use, and we’re constantly told that all ideas are equally valuable. Not only do we make use of only a small amount of what we have, but we also tend to fill our lives with things that we can most likely do without.

Speaker: 00:02:53

This emphasis on having and doing more pervades almost all areas of our lives, despite it not serving any meaningful purpose. Without acknowledging this imbalance, we could waste time and energy on things in life that make no material difference to our success or happiness, all the while ignoring those aspects that have the real impact. These aren’t just casual observations. The phenomenon behind this human tendency has been thoroughly studied, so that we can make the most out of it in our professional and personal lives. Today, it’s popularly known as the 80/20 principle. As we will see, cutting out the excess while focusing on the few things that do matter has several benefits. Not only does it save us time and resources, but it also rids us of the constant anxiety that comes with the pursuit of more. This book explores the ins and outs of how the 80/20 principle manifests in our lives, how we can use it to our advantage, and the many ways in which it will improve your life for the better.

Speaker: 00:03:57

Once you learn how to spot the 20% that matters, and let go of the 80% that doesn’t, you’ll discover an altogether new way of going about things that will be much more productive and conducive to success and well-being. What is the 80/20 Principle? Briefly, according to the 80/20 principle, 20% of causes or inputs into any sort of endeavor result in 80% of the outcomes and results. This principle was first formulated by a renowned Italian economist named Vilfredo Pareto. This is why it’s also known as the Pareto principle. Pareto first observed this 80/20 distribution in his homeland with respect to the wealth and population of Italy. He noticed that 80% of land in Italy was owned by only 20% of the population. Further research revealed that this is the case in several other countries, too.

Speaker: 00:04:55

Since then, the 80/20 distribution has been observed in a staggering array of fields unrelated to economics. The numbers don’t necessarily have to be 80 and 20; these have just been chosen to indicate an uneven relationship between cause and effect. The rule could well be 95/5 instead of 80/20—it conveys the same message. Though there is no cosmic law stipulating that all things necessarily arrange themselves in such lopsided ratios, it does seem to be an uncannily common observation across various spheres of life. Our successes, failures, problems, and their solutions all seem to be in some way determined by how we use (or fail to use) the 80/20 principle. For example, it’s been found that 20% of our effort into projects results in 80% of our success. This runs contrary to the belief that the more effort we put into our endeavors, the more likely we are to be successful. It also explains those people who appear to be able to juggle multiple complicated tasks at the same time, and do all of it right with minimal effort.

Speaker: 00:06:05

These are the people who know how to work in efficient and carefully planned ways. Familiarizing yourself with the Pareto principle can help you too become an overachiever who doesn’t waste time on those things that are unlikely to move you forward. A popular example of how the Pareto principle can help us get on top of problems comes from an anecdote involving Microsoft. They found that, by fixing the top 20% of the most common bugs in their software, they were able to eliminate 80% of the issues plaguing it. Out of these, 1% of the top 20% bugs caused half of all errors. “One really exciting thing we learned is how, among all these software bugs involved in the report, a relatively small proportion causes most of the errors,” claimed Microsoft Chief Executive Officer Steve Ballmer. “About 20% of the bugs causes 80% of all errors, and—this is stunning to me—1 percent of bugs caused half of all errors.". Using this insight, Ballmer implemented a debugging procedure that saw Microsoft remove 20% total of all Windows XP bugs—a figure that would undoubtedly be lower if they had tackled the problem beginning with any of the less significant issues.

Speaker: 00:07:25

A caveat is that these bugs, though small in number, were actually among the most complex, and fixing them may well trigger new problems. Nevertheless, the key takeaway here is that fixing every aspect of a problem, in this case removing all the bugs from Windows, isn’t necessarily the best way to go about things. Taking care of just a small, but the most important, part of an issue can produce returns that are worth many times the effort you put in. A good way to summarize the Pareto principle is that life isn’t fair. Things almost never work out in egalitarian ways. In an ideal world, every employee would contribute in similar ways to their organization, we’d be rewarded based on the quantity of our efforts, and things would generally have relatively the same value. But the truth is you don’t get returns based on how much input you provide, the playing field across industries isn’t level but dominated by a few elite performers, and most of what we spend our time on isn’t valuable or productive. At this point there might be a question on your mind.

Speaker: 00:08:33

You may think that even though not all things provide equal value, surely they’re all still important? The 20% you put into a project might get you 80% of the success you hoped for, but you still need to put in the remaining 80% of work because that is often the hardest. We don’t usually just go 80% of the way in whatever we do, and to reach 100%, don’t we inevitably have to put in the extra effort? There is some truth to this claim, especially when it comes to acquiring new skills. Eighty percent of your proficiency in most things can be acquired by focusing on the most important 20%, but to be among the best, you’ll need to go beyond that and master your art. The point of the principle, however, is not to discount the importance of the 80% effort that only yields 20% returns. It’s to emphasize the fact that just 20% of concentrated, smartly applied effort can give you as much as 80% of your desired outcome. What’s important to learn is how to determine exactly which 20% needs the most attention, as well as how you can make any effort or input beyond that more efficient.

Speaker: 00:09:44

We’ve briefly mentioned the story of Pareto discovering the 80/20 principle through his economic research into property ownership across Italy and the world. However, there is much more to the history of this rule, with many besides Pareto playing a crucial role in theorizing and popularizing the principle. Pareto was an extraordinary pioneer in business and economics, but alas, he was terrible at conveying his genius. Nobody before him had thought of taking two related sets of data, like distribution of property and the number of owners, and comparing percentages between them. Unfortunately, Pareto’s later sociological work came to be hijacked by Mussolini and the Fascist party. This led to his 80/20 principle being ignored by academics for almost five decades, until it was rediscovered by two individuals in the aftermath of World War 2. The first of these individuals was a Harvard professor of philology named George Zipf. He called his version of the 80/20 rule the “Principle of Least Effort.". According to this principle, different resources like people, goods, time, skills, capital, and other productive assets tended to distribute themselves in ways that minimized the required work.

Speaker: 00:11:03

So 20-30% of any resource accounted for 70-80% of whatever the resource was being used for. For example, if you notice the words you use in routine conversation, you’ll observe that you rarely use the full extent of your vocabulary. While speaking to others, we use approximately 20% of all words we know 80% of the time because it’s one of the ways we make communication simpler. The speaker conserves energy by not having to think of too many elaborate words, while the listener doesn’t have to expend too much brainpower in trying to understand what’s being said. At the heart of this principle is an assumption that humans tend to work in ways that allow them to apply the “least effort.". An astonishing way in which Professor Zipf proved this is by going through all Philadelphia marriage licenses that were approved in a twenty-block radius. He was trying to see how far apart married couples initially lived from one another, and discovered that 70% of all couples married those who lived within 30% of a twenty-block area. Turns out, people don’t venture too far from home in search of a life partner!

Speaker: 00:12:16

with the least investment. In: 1951

Speaker: 00:13:21

principle effectively. In: 1963

Speaker: 00:14:44

We tend to believe that doing good will result in the same amount of good coming back to us, that all our thoughts and musings are valuable, and that everyone is capable of providing the same value under ideal conditions. We assume that our problems have causes that are all equally important for resolving them, that all the opportunities which come our way have the same potential for growth, and that there aren’t just one or two relevant factors while the rest are relatively useless. Sometimes these expectations are justifiable, but generally this 50/50 way of thinking results in much misfortune. The 80/20 principle does away with this misconception entirely. It suggests that if you properly analyze causes and effects, you’ll inevitably conclude that some causes are much more important than others. The imbalance could be any conceivable ratio, be it 80/20, 90/10, 95/5, or even 99/1, but what remains constant is the lopsided contribution of some causes relative to others. The two numbers needn’t add up to a hundred, either. An axiom of the Pareto principle is that, whatever the level of imbalance, it’s probably more pronounced than it seems at first.

Speaker: 00:16:04

You might’ve known that you use some applications and features on your phone more than others, but have you ever thought of exactly how much you rely on those few apps? If you were to look closely, the true ratio would likely be steeper than you thought. This phenomenon also shows that, despite how counterintuitive the principle is to our way of thinking, it does have real-world applications. Be it with your work, your social life, or your hobbies, the way you use your time and resources has a direct impact on the outcomes you achieve. By familiarizing yourself with the 80/20 principle, you can be happier and more at ease in your personal life and more successful in your professional one. Using this principle, all you need to do is reorganize and reprioritize so you’re being as efficient as possible, and the results will follow. Success also relies on substituting the unproductive elements or components with better ones, or simply eliminating them altogether. Say you have ten hours to prepare for an exam.

Speaker: 00:17:11

Eighty percent of your preparedness will be determined by how you spend approximately two of those ten hours. To maximize the efficiency of your study, you should start with these two hours of intense studying to get to know your subject matter instead of slacking off early and trying to recover later. Eliminate unproductive elements like distractions during those two hours, and spend the rest of the eight hours in ways that require less effort to achieve the remaining 20% of the preparation. If you didn't know about the 80/20 rule, you might have tried spreading out your work in ways that would allow for its completion over ten hours. But with this rule, you could actually finish much earlier. While understanding the principle saves you time and enhances your productivity, it can also result in uncomfortable realizations. To take another exampleL it’s often observed that 20% of customers or products account for 80% of a company’s profits. However, it’s also true that 80% of what the company produces and 80% of their employees are not contributing proportionately.

Speaker: 00:18:20

All that manpower and all those resources are effectively being wasted—and they might even be holding back the successful 20%. The obvious question that arises is, why not just cut the unproductive 80% out? Companies refrain from asking uncomfortable questions like these, because the answers may mean they have to change four-fifths of what they’re doing right now. Similarly, once we realize that four-fifths of how we spend our time on important projects contributes close to nothing, it can be hard to accept the need for change. But while businesses can be extraordinarily slow at rearranging their resources and efforts, the process is much simpler for us as individuals. Finding and making the most of the “vital few” resources can multiply our results many times over despite putting in the “least effort.". This is what makes the 80/20 principle so valuable - the promise of exponential growth. The 80/20 Principle and How the World Turns .

Speaker: 00:19:28

As we’ve discussed, the Pareto principle can be applied to almost any area of life. Everywhere you look, you can probably spot inefficiencies and resources that aren’t being used in the best way possible. Either that, or some outcomes are disproportionately being caused by small groups of people or factors. Here are a few examples - •80% of box office revenue is generated by 1-2% of all films. •80% of a person’s happiness and achievements are experienced in 20% of their life . •Half of all guns in the US belong to 3% of the population . •80% of all flowers grow as a result of 20% of planted seeds. •80% of sales derive from 20% of the advertising that a company invests in .

Speaker: 00:20:24

•80% of all shared social media posts are from 20% of updates. •20% of the exercises you do during a workout creates 80% of the results. •20% of what your teacher tells you creates 80% of your total understanding of the topic. •Cleaning 20% of a room seems to account for 80% of its perceived tidiness . •20% of your experiences will make up 80% of your most cherished memories . •20% of your financial decisions are 80% responsible for your current financial state. •20% of your good habits result in 80% of the total positive outcome from all of them. Though the internet is filled with similar statistics that aren’t backed up by any research or data, the prevalence of lopsided relations between inputs and outputs is nonetheless very high.

Speaker: 00:21:28

es of alcohol (Habel, et.al.,: 2003

Speaker: 00:22:24

tion is much more even (Perry: 2008

Speaker: 00:23:27

of men to choose from (Iqbal: 2020

Speaker: 00:24:36

can be quite serious (Nelson,: 2015

Speaker: 00:25:38

Given how often huge multinational companies use the Pareto rule to make their business models more efficient, there’s every reason to believe that you can do the same with your personal life as well. The mechanism remains the same; only the context changes. All you need to do is spot the 20% of your life that is having the biggest impact, and the 80% deadweight that is taking up too much of your time and resources. The next chapter tells you how to do exactly this. Takeaways. •According to the 80/20 principle, there are a small set of inputs or factors that make the biggest impact on the total outcome. Roughly 20% of the effort is behind 80% of the results. The numbers can vary widely, with 80 and 20 being just one distribution, and this pattern is observed not just in the business world, but in our personal lives as well.

Speaker: 00:26:35

•This rule was first discovered by the Italian economist Vilfredo Pareto. While observing the distribution of property amongst the Italian population, he found that 20% of Italians own 80% of all private property. He researched this phenomenon further and discovered that this lopsided distribution is prevalent in many other countries as well. Unfortunately, Pareto’s ground-breaking discovery was ignored for several decades before others independently observed the same patterns. •Once the principle was rediscovered, it was adopted by large tech companies like IBM, which used it to improve their computer software. This and similar successes led to the principle’s popularization. •One of the main reasons the 80/20 rule is so important is that it goes against our conventional way of thinking. We tend to assume that the world is a fair place, that things always work out in egalitarian ways, and that one factor is generally as valuable as the next.

Speaker: 00:27:37

However, the Pareto principle reverses this belief by saying that only a few elements are truly worth our effort. •You can see the Pareto principle everywhere around you. Be it dating apps, where large numbers of men are chasing very few women, or sports, where a couple of players determine the team’s success, a few causes dominate the end results. By tapping into this potential of the vital few in your own life, you can use the Pareto principle to great effect. To use the principle in your academic studies, identify only those chapters, concepts, or definitions that help you understand the bulk of the material—e.g. study just the key chemical equations in a chapter first, and spend less effort going over the examples and illustrations. In your personal life, zoom in on only those activities that most constitute “quality time” with your partner, and always prioritize those. At work, regularly ask what’s actually effective and deliberately spend less time doing things like admin or useless process work. The principle even applies when you focus on the only piece of constructive/negative feedback you’ve received.

Speaker: 00:28:57

Using this to inspire your improvements will be so much more effective than considering dozens of complimentary but vague comments. Chapter 2. The 80/20 Rule as a Life Principle . So far, we’ve looked at many examples of the Pareto principle in the world around us. Once you start to look for it, you may see it everywhere. But the point is not just to observe the principle in effect, but to find ways we can actively use this insight to improve our own lives. Doing so might be challenging at first, primarily because it may require you to reorient and modify the way you approach different situations, tasks, and problems. Old habits die hard, but if we wish to optimize our personal lives, this is a small sacrifice in the interest of self-improvement and exponential growth. You can start doing this today by understanding three simple rules - less is more, always work backwards, and most things don’t matter.

Speaker: 00:29:59

The first step toward reorienting your life to fully exploit the 80/20 rule is to try and understand that less is more. We are constantly told that we must do more and more to achieve good results. This is often because we aren’t confident in our abilities to perform the essentials of what is required in various situations. In life there is so much we can’t control, but we can counter this somewhat by throwing everything we can at a problem, pulling out all the stops and ramping up the effort. The underlying (but incorrect) assumption is that effort is proportional to outcome, so if we’re unsure about what to do next, we may just double down on what we’re doing instead of pausing to consider whether we should be doing it at all. As a result, we fill our schedules to the brim so they’re packed for weeks and months on end. After all, everyone else seems to be doing the same thing. Regardless of whether this strategy actually works for us, it feels like it does.

Speaker: 00:31:02

By putting in massive amounts of (not necessarily productive) effort, we can assure ourselves, “at least I put in the work!" even if it didn’t get us the results we wanted. But it’s perfectly possible to “work hard,” to put in the hours and to slog away, but come up with no real result at the end of it all. Being your own slave driver will not necessarily win you any prizes—it’s more a question of the efficiency and appropriateness of your efforts, rather than their raw intensity. This need to overcompensate and do as much as we possibly can has two major downsides. Firstly, there are negative implications for our well-being. As we struggle to juggle the many obligations we’ve filled our calendars with, we tend to prioritize them over everything that is dear to us. Be it our physical and mental health, social lives, families, interests, or leisure time, all of it ceases to matter when we pressure ourselves into believing that more work is the only way to be successful.

Speaker: 00:32:08

The other downside is that we make all these sacrifices for returns that are usually not worthwhile, and could have been achieved with much less effort anyway. More often than not, we do this simply to ensure that we don’t regret not trying harder, and to avoid dealing with the uneasiness that comes with feeling like you should be doing more. However, once you learn to use the 80/20 principle effectively, the positive results you experience will help you cope with these doubts and fears because you’ll have seen firsthand that less can indeed be more. Our second rule is to work backwards. Knowing your end goal will make applying the 80/20 rule in your personal life significantly easier. The lack of a defined goal inevitably means that we spend our time on tasks that seem related to our ultimate objective, but are often not, or are only loosely connected. If you understand your goal clearly, you’re more likely to understand exactly what impacts the goal—and what doesn’t. When you identify a clear, direct line between your efforts now and how they bring your goal to life, you can tune out the noise and distraction along the way.

Speaker: 00:33:21

If you don’t have a goal in clear focus, you risk getting bogged down in irrelevant details that do nothing to bring you closer to your desired end. If your goal is a fuzzy “be healthier” then you may waste time buying useless exercise gear or gimmicky diet supplements, or spend ages planning out a new workout routine that ultimately has no chance of giving you the results you are after—and how could it, when you’re not even sure yourself of the results you’re after? You end up getting tangled in details while the goal remains unrealized. These details are often the small filler tasks we choose to do first instead of the harder ones. Completing them might feel like you’re slowly but steadily making progress toward your goal, but as the old adage goes, no pain no gain. If it feels easy, it probably isn’t providing you with much return on your efforts. For example, let’s say you’ve decided to start eating healthy. You ditch all the junk food for veggies, fruits, and salads.

Speaker: 00:34:28

But what is the ultimate goal here? Are you trying to lose weight or gain muscle? Depending on your answer, what you need to eat can change substantially. If you don’t start out with a clear goal, you might deprive yourself of your favorite foods without making any progress toward your goal. On the other hand, with a crystal-clear end goal, you could decide on an appropriate diet much sooner, and consequently see results faster. To aid you in the process of zeroing in on your ultimate goal, make a list of all the tasks you need to do in a given situation. Flag the ones that are most important to the completion of your project, and tackle those first. The last step is to realize that most things don’t matter.

Speaker: 00:35:16

Another way you’ll want to modify your approach to make better use of the 80/20 principle is to first ask yourself plenty of questions depending on the situation you find yourself in. Say you find yourself navigating a rough patch in your relationship. Ask yourself things like, “What are two or three of the biggest issues plaguing my relationship?”, or “What is the one thing I can improve about myself to ameliorate these issues?". Notice that both of these questions focus on the biggest factors relating to your issues with your partner, but not all factors. Answer these questions honestly, and then start doing the things you need to do. So, if you think you could be more open and forthcoming with your partner, make an active effort to do so. Of course, this is easier said than done. Often, the biggest tasks and problems make us the most anxious.

Speaker: 00:36:11

This makes us run away and avoid them while we turn our focus toward smaller problems that seem more manageable. We enjoy the illusion of making progress when in reality, the problem is unsolved, or even worsened. This is the second step that accompanies asking yourself tough questions—and following through on the tough answers they come with. Here’s another example of how to perform this two-step technique. Let’s assume you want to build your muscle mass and improve your fitness levels. Ask yourself questions like these - What are the two most beneficial habits I can adopt that will have the biggest long-term impact on my fitness? What are two or three of the worst habits that I need to eliminate to become a healthy individual? What are the biggest lifestyle barriers preventing me from maintaining a healthy routine?

Speaker: 00:37:10

Some common answers to these questions might be drinking more water, tracking your calories, and cutting down on smoking, drinking and junk food, or long working hours, respectively. While all of this might sound like a tall order, incorporating these changes into your lifestyle is incomparably easier than slogging it out tirelessly at a gym without having these habits in place. As such, you can make a few daunting but effective lifestyle changes instead of simply hitting the gym day in and day out without seeing the results that depend on these essential habits. A similar approach can be followed in any area of your life. If you’re looking for an example set of questions to ruminate over, here are some suggestions to get you started - •What are the biggest distractions that disrupt my workflow? •What are the best ways I can cut down on major expenses to save more money? •Which possessions of mine are the most expendable? •Which activities do I enjoy least and can be eliminated from my routine?

Speaker: 00:38:17

•Who are the people in my life that bring me the most joy and stability? •What are the biggest stressors in my life and what can I do about them? •What are the best habits I can incorporate which have the most net positive effect on my life (reading, healthier eating, etc.)? Once you’ve carried out these three steps a few times and gained some practice, you’re likely to notice a shift in your mindset and approach toward daily life and goals. You’ll experience a heightened clarity and sense of purpose or focus. Changing the way you think will remain a process that takes time, but any progress in that direction will prepare you for the next steps toward implementing the 80/20 principle in your life more holistically. A Word of Caution. This is where we discuss the potential dangers, and the ways the 80/20 rule might be used incorrectly.

Speaker: 00:39:18

Some of these mistakes have already been discussed briefly, but we’ll go into greater depth here. There are several common misconceptions surrounding the Pareto principle—let’s consider each of them. Misconception 1 - The numbers always need to be 80 and 20. This is the most obvious assumption because these numbers are stated in the rule itself, so it’s natural to use them as guidelines in your applications. Furthermore, most criticisms of the Pareto principle are based on this misconception. It’s argued that those numbers only apply to a limited number of scenarios, but there’s actually no rule about a rigid ratio of 80 to 20. The main relevance of using these two numbers is to illustrate the lopsided relationship between input and output. The ratio can be 99/1, 70/5, 82/10, and so on.

Speaker: 00:40:15

Later in the book we’ll look at how this principle can apply to more abstract concepts like relationships or general well-being and happiness, which are naturally impossible to quantify. This is why it’s important to realize that the numbers in the 80/20 rule are purely illustrative, and meant to convey an unbalanced relationship, however we quantify it—or even whether we quantify it or not. Misconception 2 - The numbers need to add up to 100. The fact that the numbers add up to 100 is only because that’s the original distribution Pareto discovered in Italy regarding its population and land ownership. In truth, the numbers could add up to any number greater or less than 100. This is because there will be many aspects in a situation that simply don’t contribute anything, or are neutral. So if you have to do ten tasks, don’t automatically assume that around two of them are the most important. Instead, use your judgement to gauge which of the tasks are most significant and spend the bulk of your energy on them.

Speaker: 00:41:28

Misconception 3 - The 80/20 rule encourages laziness . Given the constant emphasis on doing less rather than more, it’s easy to think that the Pareto principle condones doing only the least amount of work, i.e. that it’s great for the laziest among us. But nothing could be further from the truth. To truly understand this principle, we need to completely shift our understanding of what doing “less” means. What counts is results and outcomes. If you expend less energy achieving the same result as someone else who spends more energy achieving the same thing, then it’s not that you’ve done “less” or they’ve done “more”—rather, one path was more elegant, direct and efficient than the other. The insistence on doing less is inseparable from the focus on being efficient and productive. This requires careful planning, cultivating good judgment, and staying disciplined.

Speaker: 00:42:31

Laziness will almost certainly guarantee failure. Misconception 4 - The 80% can be ignored entirely. This misconception is probably a result of the Pareto principle’s glorification of the 20% that’s most important across different scenarios, but this does not mean that the remaining 80% can simply be ignored. After all, nobody can consistently ignore less important aspects of life—presidents still have to brush their teeth, top athletes still have to file tax returns. The idea is just to spend the least amount of time possible on these less crucial aspects while prioritizing the 20%. Even if you choose to delegate 80% of your work that you deem comparatively unimportant, you’ll still need to track and manage it to ensure that that part is being carried out appropriately as well. Yes, it’s not your priority, but it doesn’t mean you can completely ignore it. Now that you know which misconceptions to avoid, we’ll discuss the role of judgment in using the Pareto principle effectively.

Speaker: 00:43:44

You may have wondered, in reading the previous sections, about an obvious weakness to the principle in general - how can we ever be sure we are correctly identifying what is the most important aspect in any endeavor? Whenever perceptions and judgements are involved, mistakes are inevitable, especially in the beginning. This is not a weakness in the model per se, but simply an unavoidable consequence of us being flawed human beings who often work with incomplete knowledge. When you’re using the Pareto principle for your business, the role of judgment is minimized because you have data to help you make decisions. However, when it comes to your personal life, we are bound to prioritize the wrong factors and mistakenly group them into the most important 20%. It takes practice and observation to get better at this. Thankfully, it isn’t too difficult to gauge how much of a difference specific activities and inputs make to your final result. In addition, you can observe other people, how they go about doing things and what mistakes they make, and learn from them.

Speaker: 00:44:58

In personal matters, it’s natural to freeze up and become anxious of making the wrong judgments. This can only be countered by a genuine commitment toward refining our judgment and prioritizing results over what feels right in the short term. There are also ways to go about using the 80/20 principle in our personal lives in a more data-oriented manner. Use a diary or journal to keep track of your progress based on the decisions you take, and analyze the results from time to time. Give yourself time to collect enough data and information—one or two months at the most and a week at the least—and base your judgements on what you’ve collected. Perhaps the biggest reason we’re constantly tempted to do more instead of less is our quest for perfection. We want to be able to control and improve every single facet of the situation we find ourselves in, even if that means dedicating excessive resources and time to these endeavors. However, even if we choose to adopt the 80/20 principle, it’s still easy to transfer our perfectionism to the 20% we feel is most important.

Speaker: 00:46:13

We have less to agonize over, but still enough to overwork ourselves in ways that are not necessarily conducive to achieving results. One of the most important parts about learning to incorporate the 80/20 principle in your life is to learn how to let go. To a large extent, this also applies to the 80% you’ve deemed less important. If you’ve delegated it, yet continue to micromanage that part of your work, you haven’t really let go. Similarly, with the 20% that’s important, you must know when to stop and recognize that you’ve done enough. Here’s an example. You’re studying for a test that’s based on one book you’ve been assigned for the course. Out of the chapters in this book, you’ve identified three that are most important, and your knowledge of these sections guarantees you’ll pass the test.

Speaker: 00:47:10

The perfectionist in us might be tempted to review these three chapters endlessly. But this would defeat the purpose of adopting the Pareto principle because you likely won’t end up reducing your overall workload. Instead, set out a time period that you think will be sufficient to gain a good grasp of those three chapters, and let it go after that. This will not only ensure better retention, but also help you implement the 80/20 rule more effectively in the future because of the better results it will yield you. Illustrating the 80/20 Rule . When used correctly, the Pareto principle can lead to great results through minimal effort. However, not every situation calls for the same approach. If you aren’t careful about how you use the 80/20 rule, you may unwittingly suffer some negative consequences.

Speaker: 00:48:06

Thankfully, it isn’t difficult to recognize the kinds of situations that are appropriate for the Pareto principle and those that aren’t. One area where the Pareto principle can unquestioningly be applied in several productive ways is your career or business. This is the main reason behind the popularity of the rule in the first place! When it comes to careers, arguably the best way to use the Pareto principle is to streamline your job search. Hunting for jobs involves researching, networking, and applying. All of these can take a lot of your time, but it doesn’t necessarily have to be that way. Instead, divide your time over these three activities in efficient ways. Don’t just apply to every job opportunity that comes your way, and, as tempting as it is, don’t rely entirely on networking and contacts to get you a good job.

Speaker: 00:49:03

Even within these three overarching activities related to your job search, some are worth it, while others aren’t. For example, researching prospective employers is a rabbit hole that’s easy to fall into, and hard to get out of because of how important it seems. You might find job opportunities that appear interesting, but they’re located in places you wouldn’t want to move or commute to. Yet, you might be tempted to apply to these jobs as a backup in case nothing else works out. Here, apply the Pareto Principle by identifying your geographical preferences for jobs early on, and searching for employees only in those regions. Give some thought to where you’d prefer working, and then find jobs available there. Since only a small number of positions is likely to be appropriate, narrow in on those soon in your search process, and save yourself the effort of considering loads of unsuitable positions. This way, you cut out the 80% wasted time spent looking for and applying for jobs you’re unlikely to really want.

Speaker: 00:50:09

Another common tendency is to apply to jobs that don’t quite fit your background or experience. Though this might give you more varied opportunities, it isn’t always a good strategy. Starting out, only apply to jobs for which you fulfill 70% or more of the listed parameters. This will not only save you time that could be better spent elsewhere, but also the disappointment that comes with not hearing back. You’re much more likely to be rejected for jobs whose requirements you don’t meet. Avoid applying to these and you’ll save time and effort. The principle here is simple - only a tiny fraction of jobs is likely to be right for you, so focus on honing in on those positions. If you work hard to pursue only the most eligible and appropriate 20% of jobs, you’ll be more successful in your job search than if your technique was more scattershot.

Speaker: 00:51:05

You may ultimately expend less energy, but the effort, being more targeted, is more effective. When combined with the previous tip, this will narrow down your search drastically while also providing you with the best options that suit your experience, background, and geographical preferences. A third highly recommended strategy for getting jobs is to build your profile on social networking sites. Taking time to enhance your profile, expand your list of contacts, and enlarge your database can open new doors—but not all techniques are equal. Twenty percent of what you do on social networks will give you 80% of your returns. Reaching out to a single key person who has the power to influence your career is more effective than constantly engaging hundreds of people who will never realistically improve your prospects. This will depend on your business or your skillset, but it would be foolish to think that pointless Facebook posting could yield the same results as a targeted, informed networking campaign on LinkedIn, for example. In your career, once you’re hired, the 80/20 rule can help you think carefully about what actions genuinely bring you closer to your goals.

Speaker: 00:52:25

For example, in a dispute, it may make more sense for you to try to contact someone more senior from the get-go, or you may quickly discover that you’ve got more of a chance of getting what you want if you reach out to ten more junior people first. By constantly asking how your efforts and rewards weigh up, what you can ditch, and what you can focus on, you keep your eye on what matters and avoid getting bogged down by what doesn’t. These are just some of the ways you can implement the 80/20 rule in both your job search and your job itself. The trick is to work smart, not hard. Eliminate tasks that provide too little return for too much effort, and don’t put all your eggs into one basket. The beauty of this principle is that it lets you shape your approach to prioritize the people, products, and resources that offer the most value to your company. For example, let’s say you’re a restaurant owner. You’ve observed that around 80% of your revenue in a day is earned in 20% of your working hours.

Speaker: 00:53:35

The peak time for your business is around eight to ten p.m., right when you usually shut your doors for the day. An effective way to use the principle here would be to extend your working hours by an hour at night while opening a few hours later in the morning to capitalize on peak hours. A good way to break down the ways in which you can apply the 80/20 principle to your business is to split it into three major factors - products, customers, and marketing. Each of these likely takes up an overwhelming portion of your time and resources, so you’ll want to make sure that they’re always being optimized. Regarding products, we know that 20% of products generate 80% of revenue. But how do you find out which 20%? For online stores, you can use tools like Google Analytics to track sales, whereas other software is available for brick-and-mortar stores. Another way to narrow down products is to analyze the percentage of sales versus the percentage of profits.

Speaker: 00:54:41

This is especially useful when some of your products require more customer support than others. Make a table and account for all related costs to your products and find out which ones are the most profitable and in demand with your customers. These are the ones you should advertise the most. When it comes to customers, use a similar strategy. Find the 20% that are generating 80% of your revenue and regularly follow up with them and offer incentives to ensure they remain loyal. Additionally, find out which 20% are the cause of 80% of the complaints you receive, and consider how to convert them to happy clients, or eliminate them altogether, if possible. Lastly, marketing your product will require the use of the Pareto principle in several domains. These include the way you manage search engine optimization, content marketing, social media outreach, web traffic, etc.

Speaker: 00:55:45

Using the 80/20 rule here has a lot to do with tracking relevant data for all of these categories, choosing the ones that generate the most leads, and capitalizing on them. You want to find the keywords, content, social media posts and so on that do the most work, and focus your efforts there. Can you cut what is underperforming or even hurting your ratings? Tools like Google Analytics help enormously with this, so spend some time familiarizing yourself with the program to boost sales and reduce inputs over the long-term. When you use one tool for various activities relevant to your business, you’ll save time that would otherwise be spent learning how to use different tools for different tasks. This might tempt you to just delegate this work, which means you’ll expend resources on something you could easily do yourself. Instead, pick up a book or course on this topic, and you’ll save yourself a lot of time and money in the long run. Takeaways.

Speaker: 00:56:53

•Three simple maxims can help us use the 80/20 rule in everyday life - less is more, always work backwards, and most things don’t matter. Firstly, don’t do a lot of busy work simply because it feels like you’re making progress—always try to work smarter, not harder simply for the sake of working harder. Secondly, always make sure your goals are crystal clear so you can work backwards and decide which actions matter—and which don’t. Finally, understand that some factors simply matter much less than others, and let go of the minor details to focus on the more important ones. •Use smart questions to zoom in what ultimately matters. Get curious about the biggest rewards, costs, obstacles and sources of joy, and don’t worry about considering all of them. •The numbers don’t have to be in an 80/20 ratio and they don’t need to add up to 100. Rather, the 80/20 fraction is simply meant to illustrate that one side of the equation is significantly larger than the opposite.

Speaker: 00:58:11

•Understand that the principle doesn’t encourage laziness but optimizes the energy that you do spend, maximizing on its returns. At the same time, don’t think that you can completely ignore the 80%--it needs your attention, just relatively less compared to the 20%. •The effectiveness of the principle depends on your accuracy in identifying the most important 20%. You’ll make mistakes in the beginning, but it’s a learning curve— constantly check in with your appraisal and adjust as necessary. Gather objective data to analyze so you can make objective, rational decisions as much as possible. •You can use the Pareto principle in your career, specifically your job search. Expend the least energy for the most reward by honing in on only those job roles most appropriate for you early on. This means you search less, and come up with fewer hits—but those hits will be of greater quality, saving you time and energy.

Speaker: 00:59:16

•You can use the Pareto principle in your business, too, by letting it guide your marketing efforts. Using gathered analytics data, for instance, you can identify the top performing posts, campaigns or keywords, so you can focus on those. Though it’s true that the principle isn’t a magic formula that will solve all your problems (or save you from having to consider the 80%), it can be an enormous time and energy saver if used correctly. In short, the 80/20 principle is about using data or observations to help identify and optimize on the most essential aspects of any process, so that you spend the least energy for the most gain.

Speaker: 01:00:01

A simple example is a company offering free samples at a convention.

Speaker: 01:00:07

Using data, they can identify their top performing and most popular item and promote that exclusively, knowing that this move is likely to generate more revenue than any other.

Speaker: 01:00:20

This has been 80-20 Your Life.

Speaker: 01:00:23

Get more done with less effort, time and action.

Speaker: 01:00:27

Written by Nick Trenton.

Speaker: 01:00:29

Narrated by Russell Newton.

Speaker: 01:00:30

Copyright: 2020

Speaker: 01:00:33

Production Copyright by Nick Trenton.

Speaker: 01:00:35

All rights reserved.