80-20 Rule (Pareto Principle) Definition & Explanation

By Eser Yilmaz, M.S., Ph.D.
​Reviewed by Tchiki Davis, M.A., Ph.D.
What is the 80-20 rule or Pareto principle? Find out what it means, how it relates to your life, and how you can use it to increase your productivity and improve your well-being.
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Most of us have been told from a young age that the key to success is hard work, may it be our education, careers, or relationships. But have you ever wondered why you sometimes fall short of reaching a goal or get mediocre results at best, despite putting so much of your time and effort into achieving it? Your immediate instinct might be to work even harder and dedicate more of your time and resources to your task. On the surface, this reaction makes sense; the harder you try, the more likely you will achieve your goal. 
On a deeper level, however, the harder work may make you feel drained, burned out, and sometimes less confident in your ability to succeed, especially if all that extra effort doesn’t move the needle in your favor. You may think how unfair it is, given that some people around us achieve more without putting in much effort. As it turns out, the key to success isn’t working harder, but working smarter. 

Although we might expect some things in our lives to be more critical than others, we don’t always judge well the extent of these differences in importance. Working smarter involves determining what is essential and trivial, which requires understanding the 80-20 rule. In this article, we will discuss the 80-20 rule, which is also known as the Pareto principle, how it applies to various aspects of your life, and what you can learn from it to improve your productivity and well-being.
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What is the 80-20 Rule? (A Definition)

At the turn of the 20th century, an Italian economist, Vilfredo Pareto, observed a peculiar wealth distribution pattern in Italy and other countries he surveyed: approximately eighty percent of the wealth belonged to only twenty percent of the population (Pareto and Schwier, 1971). This observation didn’t gain much traction beyond economist circles until a few decades later, when a young engineer named Joseph Juran started optimizing quality control and management methods. Juran noticed that the frequency pattern of quality defects resembled Pareto’s observation of the unequal distribution of wealth (Juran and DeFeo, 2010). In other words, approximately twenty percent of quality defects caused around eighty percent of the issues. 

Later in the 1940s, Juran noticed that this unequal relationship between causes and effects applied to many other aspects of life and stated that “the vital few” reasons were responsible for the majority of results or the most critical consequences, whereas “the trivial many” causes were associated with the remaining few. Hence, the 80-20 Rule or the Pareto Principle is also known as the Law of the Vital Few. 

At its core, the 80-20 rule states that the minority of causes have the most impact, whereas the majority have the least.  Yet, one thing to keep in mind is that the 80-20 rule is not a magic formula, and therefore, the values of eighty percent and twenty percent aren’t exact values that will always hold.  In some cases, the relationship between causes and effects is skewed less, such as 70-30. However, the relationship is highly skewed and unequal in other cases, such as 95-5. Hence, our goal isn’t to get an exact value for the relationship between causes and effects. Instead, we use the 80-20 rule to understand that this relationship is rarely equal and determine the vital few and the trivial many in a given situation. Let’s take a closer look at this principle in different contexts.

Video: Pareto's Law, The 80/20 Principle by Vilfredo Pareto

What is the 80-20 Rule in Business?

Have you ever driven by a construction site or walked into an office and observed that a few employees were absorbed in their tasks and working diligently while others were just idling around?  You might have wondered whether you happened to be at the scene during break time or if your observation was due to your imagination or unfamiliarity with the conditions of that work environment. No doubt that these factors – i.e., your imagination and unfamiliarity – might play a role. Yet, you might have also seen the 80-20 rule at work, literally and figuratively. According to this rule, twenty percent of employees produce eighty percent of the work output, while the remaining majority produce only twenty percent (Koch, 2011). 

However, the 80-20 rule may apply to businesses in more than one way. For instance, approximately twenty percent of a company’s products might be responsible for eighty percent of its sales (Koch, 2011). Similarly, eighty percent of the company’s sales might involve twenty percent of its customers (Koch, 2011). Moreover, not all sales carry the same value either; twenty percent of sales likely make up eighty percent of the profits (Koch, 2011). 

Again, when we think about the 80-20 rule, it is wise to keep in mind that these numbers are not set in stone. For example, ten percent of a company’s products might be associated with nearly seventy percent of their sales, or thirty percent of their customers might be responsible for ninety percent of all sales. Regardless of the exact values, most businesses likely have a minority of stellar workers, a few popular products that sell well, and a small fraction of customers loyal to that brand or willing to buy more of their products and services.  But what can businesses do with this information?​

How Can Businesses Use The 80-20 Rule

​Let’s imagine a restaurant manager who wants to understand why her restaurant isn’t as profitable as she thought it should be, despite having an extensive menu option and a decent flow of customers. One of the first things she might notice is that only about a quarter of the dishes on the menu are ordered frequently. She might also see that some customers order multiple items and come often, whereas others order only one dish and rarely return.

In other words, her restaurant might be serving vital few dishes to vital few customers. In this case, this manager might choose to focus her restaurant’s efforts on the few favorite dishes and eliminate the items that don’t sell, especially if these rarely ordered dishes involve ingredients that require special handling or wouldn’t be stocked otherwise. Similarly, the manager might determine the demographics of her best clients and cater to their needs and preferences. ​

What is the 80-20 Rule for Your Diet?

Speaking of food, let’s put the 80-20 rule on the table. When nutrition experts talk about the 80-20 diet, they mean a specific type of flexible dieting. More precisely, the 80-20 diet entails eating healthy meals eighty percent of the time and consuming reasonably indulgent options for the remaining meals (Hernandez, 2017). For instance, if a person eats twenty-one meals per week, seventeen would be healthy, and the remaining four would be indulgent meals. 

A recent study compared the efficacies of the 80-20 diet and a strict diet (100-0 diet) by measuring their emotional and physiological effects on participants (Hernandez, 2017). A healthy meal in this study was defined as a meal that adhered to the USDA MyPlate recommendations. Hence, participants in the flexible group had the option to eat twenty percent of their meals outside the USDA MyPlate criteria.

​In contrast, the inflexible group participants had to adhere to the USDA MyPlate standards at all times. There were no statistically significant differences between the two groups regarding weight loss and any other physiological measures. However, participants in the 80-20 diet group had lower drop-out rates (16.7%) than the participants in the inflexible group (58.8%) (Hernandez, 2017). These results might mean that the 80-20 diet’s flexibility makes it easier to stick with it. However, since this study was relatively small, any interpretations should be taken with a grain of salt. 

Another Example of the 80-20 Rule in Diet

Another way we can think about the 80-20 rule in the context of food consumption is a Japanese tradition called hara hachi bun me, which roughly translates to “eighty percent full belly.” As its name indicates, practitioners of this diet put their forks down before they feel the need to unbutton their jeans. Remarkably, Okinawans who typically practice hara hachi bun me are one of the healthiest and longest-living people on earth (Willcox, Willcox & Suzuki, 2002). 

The elderly individuals in Okinawa have lower body mass indexes and fewer chronic health problems than their peers who eat western diets (Willcox, Willcox & Suzuki, 2002). Although some health advantages of these populations might be attributable to other factors, this traditional eating practice can still be one of the reasons for Okinawans’ remarkable longevity. In other words, eating until eighty percent full isn’t associated with health concerns, but eating the remaining twenty percent might trigger them.

What is the 80-20 Rule for Your Relationships?

Let’s imagine your friend circle. Do you feel equally close to all of your friends? If you are like most people, the chances are that you have a few significant friendships and many not-so-significant connections. Moreover, you might prefer to spend more time with your close friends than with others. In other words, you might notice that your friend circle includes vital few friends with whom you interact the most and trivial many others with whom you occasionally meet up.

What about individual relationships, may it be with a romantic partner, a family member, a coworker, or a friend?  In a one-on-one relationship, you may notice that only a few issues or differences cause most problems, disagreements, and arguments. In other words, approximately twenty percent of issues might be responsible for eighty percent of negative interactions. In this case, you can use the 80-20 rule to determine these relatively few issues so that you and the other person can work them out. 

Moreover, the 80-20 rule in romantic relationships might also mean that it is unrealistic to expect your partner to meet all of your needs and expectations all the time. It is common for partners in a healthy relationship to spend significant portions of their free time together but still find time for their individual hobbies, activities, and friends.

What is the 80-20 Rule for Time Management?

One of the most important rules for managing your time effectively is to stop doing activities that waste your time. The 80-20 rule can help you determine the actions that waste most of your time, so you can reduce or eliminate them from your schedule and reclaim your lost hours and use them for activities that matter more to you.

Here is an example; a few years ago, I used to complain that I didn’t have enough time to read books. At best, I could finish one or two books in a month. When I took an inventory of my daily activities for a few days, I was shocked to find out that I spent a minimum of two hours on social media every day, and some days even more. I gradually quit using the most popular social media platform, limited the time I spend on my accounts on other platforms to a total of twenty minutes per day, and refused to create profiles on new platforms. The result? I have been finishing at least ten books every month for the past four years. 

The 80-20 rule of time management also implies prioritization. Let’s imagine a work-related meeting that lasts about 100 minutes. According to the 80-20 rule, it is likely that only twenty minutes of this meeting is spent on essential business, whereas the remaining eighty minutes is used for nonessential discussions. Determining these nonessential time wasters might allow businesses to have shorter and more productive meetings.

What is the 80-20 Rule for Productivity?

The 80-20 rule for productivity is very similar to how it is used for time management. Thus, according to the 80-20 rule, one of the best ways to become more productive is to figure out and eliminate the most unproductive activities on your schedule and prioritize the most effective activities. 

One method to figure out what to prioritize is by making a list of all activities you aim to tackle that day. Next, you can sort them in order of importance or value. Then you might start tackling them by spending most of your effort into completing the vital few activities on top of your list. That way, even if you don’t finish everything on your list, you might still feel productive and accomplished by getting the most important tasks done well.

Here is a video about using the 80-20 rule to improve your productivity.

Video: Improve your Productivity with the 80-20 Rule

More Examples of the 80-20 Rule

If you are like me, you might have a closet full of clothes that you only wear once in a while and a handful of outfits that you wear, wash, and wear again and again. You might have also heard that most of the internet traffic is associated with visits to a small fraction of websites. Here are some other examples that you might find interesting.

Library circulation
Assessments of library book circulation patterns found that nearly twenty percent of the books accounted for about eighty percent of the circulation, whereas most of the titles remained on the shelves and were borrowed occasionally (Nash, 2016).

Healthcare 
Health problems aren’t distributed equally in our society. Healthcare professionals seem to spend a significant chunk of their efforts on a relatively small fraction of the population with multiple health issues (Turabian, 2017).

Studying
Not every material covered in class has equal importance. Students who pay attention during lectures to which topics their instructions dedicate the most time to or ask their instructors whether something will be on an exam are likely to focus most of their studying efforts on essential topics and spend less time on trivial subjects. In contrast, a student who assumes every topic carries equal value may spend hours on trivial subjects and not enough time on what matters the most.

80-20 Rule Quotes

  • “Do the hard jobs first. The easy jobs will take care of themselves.” – Dale Carnegie
  • “It is not shortage of time that should worry us, but the tendency for the majority of time to be spent in low-quality ways.” – Richard Koch
  • “Doing less is not being lazy. Don't give in to a culture that values personal sacrifice over personal productivity.” – Tim Ferriss
  • “Discern the vital few from the trivial many.” – Greg McKeown​
  • “Strive for excellence in few things, rather than good performance in many.” – Richard Koch

Articles Related to the 80-20 Rule

​Want to keep learning about productivity tricks like the 80-20 rule? Check out these articles:

Books Related to the 80-20 Rule

If you’d like to read more about the 80-20 rule, here are a few books you might be interested in.

Final Thoughts on the 80-20 Rule

Increasing your awareness of how the 80-20 rule applies to your life can help you figure out your priorities, so you can make the best use of your talents and resources.  By focusing your efforts on actions and tasks that matter, you may be able to increase your life satisfaction.

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