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What is 80/20 rule?

    What is 80/20 rule?

    Last Updated on: 13th November 2023, 06:24 pm

    Have you ever heard of the 80/20 rule, also known as the Pareto Principle? This unique concept has been applied in numerous fields such as economics, business, and even lifestyle management.

    Origin of the 80/20 Rule

    The 80/20 rule is named after 19th-century Italian economist Vilfredo Pareto, who noticed that approximately 80% of Italy’s wealth was owned by only 20% of the population.

    This observation inspired him to develop a mathematical formula applying the 80/20 ratio, which found use in diverse economic studies.

    What is the 80/20 Rule?

    Essentially, the 80/20 rule asserts that 80% of outcomes (outputs) come from 20% of causes (inputs). The rule is a heuristic that is used in different contexts depending on the situation.

    For instance, in business, it might mean that 80% of sales come from 20% of clients. Similarly, in project management, it might mean that 80% of productivity comes from 20% of activities.

    Application of the 80/20 Rule

    In Business:

    Companies commonly use the 80/20 rule to identify and prioritize their most profitable products or customers.

    It helps them focus their resources on areas that offer the highest returns. For instance, a company might find that 80% of its profits come from just 20% of the products it sells. In such a case, concentrating on those top-performing products makes sense.

    In Productivity and Time Management:

    The 80/20 rule can be incredibly helpful for personal productivity and time management. It suggests that focusing on the most critical 20% of your tasks will yield 80% of the results.

    Thus, by identifying and focusing on these tasks, individuals can increase their productivity significantly.

    In Health and Fitness:

    In the health and fitness arena, it’s often applied as a diet principle where 80% of weight loss results are believed to derive from just 20% of exercises.

    The principle recommends a balanced approach to healthier living, suggesting that eating right 80% of the time and allowing for indulgences 20% of the time is a practical and healthy approach that’s sustainable long-term.

    Limitations of the 80/20 Rule

    While the 80/20 rule can be a helpful guideline, it does carry limitations. It’s a simplifying assumption, and the actual distribution might not always be 80/20.

    Also, it doesn’t provide detailed guidance on how efforts can be prioritized. Therefore, while this rule can provide a starting point for analysis, deeper and more comprehensive insights must complement it.


    The 80/20 rule is a powerful tool that can lend novel perspectives to business operations, productivity, and even lifestyle.

    By focusing on the 20% that matters most, resources can be optimally utilized to achieve higher returns. However, it’s essential to remember that the principle is a guide rather than an exact science.

    Life rarely offers perfect ratios, yet understanding and applying this concept in relevant areas can lead to amplified efficiency and productivity in our personal and professional lives.

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