The 80/20 Principle

I want to be up front with everyone, this article is an article more of intrigue than expertise. From the first time I heard about this principle I wanted to know more. A quick explanation, the principle states that twenty percent of what we do is responsible for eighty percent of the return. That means that eighty percent of what we do is responsible for only twenty percent of the return. The biggest issue I have found so far is that it works in so many ways that it’s hard just to talk about it in one way. I believe the first time I heard about it; it was a situation about sales. The man explained how 20% of the salespeople were making 80% of the sales. That means that 80% of the salespeople were only making 20% of the sales. That sounded crazy to me so I had to somehow find a way to put that in numbers I could see. So, if we choose really simple math, let’s say we have 10 salespeople. In total they made one million dollars in sales. That would mean that 2 salespeople made 400k in sales each, and that would leave the remaining 8 people to make 200k in sales or about 25k a piece. Is that really how it works? Do we have people at work who over the course of a month are doing ten times or more than someone else?

Let’s look at time, based on this logic, does this mean that in an eight hour shift I’m wasting over six hours? If I’m not wasting it, does it mean that I should be doing something else with my time? Twenty percent of eight hours would be one hour and thirty-six minutes. That means that when I am working during my shift, over six hours is spent doing something that I really shouldn’t be spending my time on. Someone is paying me for six hours every single time I show up to work to do something that gives them almost no return. That also means that if you sleep for eight hours in a day, you still have eight hours left. So, you are spending six of those hours doing something that gives you almost no return.

So, what do I do next with this information? The first thing I want to realize is that when it comes to work, we have a few people who are responsible for most of the work getting done. How do we reward those people? The opposite of that would be what do we do with those people who just aren’t producing anything of value? We also need to figure out what side we are on. If you truly look at what you do while you are at work, are you working on tasks that have a high return or are you wasting your day doing a million little things that have little value or impact?

I also want to re-evaluate my time. The truth is, we probably don’t have eight hours in a day to do what we need to do. We must do things like eat and get ready for work. That probably leaves us more like six hours to really look at. So, in those six hours, we waste four hours and forty-eight minutes. By waste I mean we are doing things like Netflix or spending time on social media. That means that during a typical day we spend a little over one hour doing things that help us out.

We have barely scratched the surface on things that we do that the 80/20 principle applies to, but we know enough to start making changes. What are those changes? The first thing we need to do is to look at the tasks we do every day and how we spend our time. We need to break down those tasks and see what tasks our giving us the greatest return for what I want to accomplish. Again, let’s look at our salespeople friends. When we break down how they spend their workday, we find out that they spend two hours making sales calls, four hours in meetings and two hours driving to different locations for sales. We want to be safe, so obviously we can’t make any sales while we drive. It’s also difficult to make a sale during a meeting with someone else. So, what is the next move? We need to find a way to reduce meetings to only what is essential and if we can, find a way to not be in a vehicle as often. If we can find a way to get out of an hour and a half of meetings and spend thirty less minutes in the car, we can double our sales. Now, for time outside of work. Could you spend one less hour on social media and be working on anything else? Maybe you could exercise or learn a new skill. Maybe you could read or even take an online course to improve something that you feel is a short-coming. The list of things you can do to replace the wasted time is unlimited. Maybe you have a relationship that is strained, or you need more sleep.

My challenge to everyone this week is to do two things. First, I want you to go and evaluate your tasks and your time. Second, I want everyone to find other places where the 80/20 principle applies. Once you notice it, you see it everywhere, go find it!