

I’ve long been an advocate of the ‘80/20 rule.” Have you never heard of it? It refers to the concept that most things in life, can be attributed to any cause, complaint, or event, by way of an 80/20, or 20/80 proportion. It may be somewhat cynical, but it certainly does offer some balance, and has proven an addictive philosophy to embrace.
Historically also referred to as the ‘Pareto principle,’ the ‘law of the vital few,’ the ‘power-law differential,’ and less often as the ‘principle of factor sparsity,’ they have for ages referred to 80% of the consequences of any outcome, strangely, being caused by only 20% of the concerned population. It stems from the 1906 declaration by Italian Vilfredo Pareto, who, in his Political Economics Course at the University of Lausanne, identified that 80% of the land in Italy was owned by 20% of the population.
Anyway, not that 80/20 is genuinely provable in any way, it does appear to be a fairly accepted pair of glasses through which to view life, warts and all, as we who do not have all the answers seek a philosophical starting point for discussion or argument.
As a researcher, I can take comfort in the knowledge that 80/20 is an acceptable heuristic measure, a ‘rule-of-thumb,’ if you like, and is academically recognised as ‘a pragmatic method not fully optimised, perfected, or rationalised,’ according to Gigerenzer and Gassmeier (2011), while it ignores conveniently some of the information, still allows one to “make decisions more quickly, frugally, and/or accurately than more complex methods.”
Of course, the 80/20 ‘thing', is ‘loose,’ but not random, and refers to a general distribution of responsibility, so it could in fact be as diverse as 90/10, or 70/30 or any other apportioning of that distribution as a unique phenomenon, of which there are many common practices in finance, business and the stock market. That in itself is ironic, because it suggests that many of the 80/20 evaluations are made to offer an entirely believable ‘holding position,’ to satisfy initial enquiries... until you come up with something better...
Well, I did say that it was somewhat cynical.
More legitimately though, Richard Koch is a successful UK-based entrepreneur, management consultant, author and venture capitalist, who says, “the 80/20 rule is behind any innovation, or extra value. It is an entrepreneurial principle, a formula for value creation utilised not only by entrepreneurs, but by most managers and organisations.” Koch, being as innovative and successful as he has proven to be, is adamant that the 80/20 rule applies almost universally and he finds it, “like the truth, sets you free, you can work less, earn more and enjoy more.”
Global consumer giant ‘Amazon', offers these examples: 20% of your effort will contribute 80% of your results; 20% of your customers will provide 80% of your turnover; 20% of your customers will give you 80% of your complaints; 20% of your marketing leads to 80% of your results; and 20% of your online content delivers 80% of your custom. Now, whether real or imagined, they offer sufficient ‘believability,’ to be acceptable and motivational... don’t they? And if you needed something real to lead you towards, rather than away from, the 80/20 perspective, a 1992 United Nations report found that the richest 20% of the world’s population received 82% of the world’s wealth...
Don’t say I didn’t tell you!
I may not be the most erudite of columnists, but if there is one positive thing I can always read into the 80/20 rule it is this. Why would you not want to embrace it if you could see 20% of your work bringing you 80% of your benefits, why on earth would you not want to embrace it, and then make it work for all of the other things you do?
Challenging? Maybe. Enjoyable? Yes. Fun? Well, if not always fun in the same way that a party, or a day at the beach may be, it’s certainly going to put a smile on your face as you face the diversity that every day invariably throws your way... One hundred per cent!
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