Think As Inc

The 80/20 Rule

July 5, 2010 on 6:07 pm | In life coaching | No Comments

To get a better work/life balance, you can try bringing more personal life into work.  Some actual examples of this trend are casual dress at the office, telecommuting and flextime, and bringing pets to work.  On the other hand, you can introduce business techniques into your personal life – e.g., scheduling your social calendar in your Palm Pilot, conducting family “meetings”.  My favorite technique is to apply the 80/20 rule, or Pareto’s Principle, to both work and life.

The 80/20 rule refers to the idea that in many cases 80% of the value (sometimes measured as income, revenue, or profits) is created by the top 20% of the population.  Thus, a firm with five customers that generates $5 MM in revenues would fall under the 80/20 rule, if the top customer generated $4 MM in revenues (or 80%), while the other four customers combined accounted for 20%.  If this business understands the 80/20 rule, it will not treat all its customers the same because of the disproportionately higher value of its top customer.

What is true in business is true in life.  We have many different customers – people/ responsibilities vying for our time and energy.  Our customers might be our spouse, our kids, our employer, our community, our hobby, etc.  Each customer brings us value, not necessarily in dollars and cents, but if our bottom line is overall quality of life, then each customer contributes to our bottom line in some way.  Yet, we don’t always give the bulk of our time and energy to our top 20%.  For example, if you think that family and career are your top 20%, and yet you spend a lot of time and energy on social events, committees, hobbies, and many other things, you may not be recognizing Pareto’s Principle.  Instead of spreading a lot of time and energy in disparate places, try to focus on the few things that are most valuable to you.  When you are faced with an overwhelming TO DO list, remind yourself of 80/20.  Apply your energy to the “20” to get yourself “80%” of the way to fulfilled.