Do you know Vilfredo Pareto – the guy, who observed that 80% of the land in Italy was owned by 20% of the population? This observation he made in 1906 would not have had this impact if he was not convinced that this ”law of the vital few” is true “through any human society, in any age, or country”.
Nowadays the “80-20 rule” is a common rule of thumb in business and sometimes you might like to put an end to the universalization efforts concerning this law. No one doubts that 80% of your sales come from 20% of your clients, or that fixing the top 20% of the most reported bugs, 80% percent of the errors and crashes would be eliminated. But what about the notion that we wear our 20% most favoured clothes about 80% of the time, or – the other way round – we spend 80% of the time with 20% of our acquaintances?
It was the famous Paul Krugmann, who dismissed this “80-20 fallacy” in the New York Times as being cited “not because it’s true, but because it’s comforting.” Instead he insists to the truth that in the last 30 years “the big gains have gone to a much smaller, much richer group than that.”
But even if Krugmann is right, there are still very convincing offshoots of the Pareto principle, proving its value for managers. Remember Timothy Ferriss’ Bestseller The 4-Hour Workweek from 2007 where he recommended focusing one’s activities to those 20% that contribute to 80% of the income. And more notably, to firing the 20% of your customers who take up the majority of one’s time and cause most trouble.
Of course, the rule that “in anything a few (20 percent) are vital and many (80 percent) are trivial” is very general. But it is a restless reminder to focus on the 20 percent that matters, as F. John Reh points out: “Of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results. Identify and focus on those things. When the fire drills of the day begin to sap your time, remind yourself of the 20 percent you need to focus on. If something in the schedule has to slip, if something isn’t going to get done, make sure it’s not part of that 20 percent.”
The same holds true with automation. It is like I said elsewhere in this blog: At the end of the day you will find out that there are just a handful of events remaining that are actually impacting on your business. And I bet you anything that these are less than 20%.