Vilfredo Federico Damaso Pareto was one curious dude.
Born into a middle class Italian family, he was no slouch when it came to the smarts department and as an adult his burning desire to understand nineteenth century society caused him to seek greater knowledge through philosophy, sociology and economics, with economics providing Vilfredo his big break.
He was intrigued by the questions that plague many of us. Why was the majority of his country’s wealth and benefits proportioned to such a small segment of its society and why did civilization seldom change much?
After investing long periods of careful analysis into Italy’s historical land titles and wealth distribution records, the discovery finally revealed itself to 58 year old Vilfredo as he was lecturing economics at the University of Lausanne in Switzerland.
To his amazement and consternation, he discovered that 80% of his nation’s income, land and wealth was owned by only 20% of its citizens and Vilfredo’s findings suggested that the vast majority of society’s power was controlled by just a few individuals. And when V.P. analysed data collected from neighbouring countries, he found similar percentages reflected. The 80/20 principle seemed to apply everywhere.
But what really bent old Vilf out of shape about this new knowledge was that the folks at the top of the heap seemed to simply change places every once in a while in order to present a contrived image of social progress when in fact what was occurring was seat swapping of the highest order. Surprise, surprise!
So The Rich Get Richer, What’s New?
Even if Vilfredo is right and our political / cultural processes are some elaborate shell game, his principle still goes a long way to helping us comprehend our current situation and illuminating those few choices which will provide maximum benefit to us.
Also known as the 80/20 rule, the Pareto Principle explains some of life’s greatest mysteries:
- Why is Life Not Fair? – because 20% of the people own 80% of the world. Always have, always will.
- How Can I Get Ahead? – stop doing 80% of your activities and focus on the golden 20%.
- Is Success Due To Hard Work or Intelligence? – Neither. Choice of action determines success. 20% of our efforts produce 80% of results.
Pareto’s Principle Brings Home The Bacon
This rule of thumb can have immediate positive impact on your life:
- Less Reading, More Learning – quickly read books by first browsing the conclusion, introduction and then conclusion again. Skim the remainder of the book for interesting points and you will obtain 80% of the meaning in 20% of the time.
- Superfluous Multifarious Abrogation– Sir Issac Pitman, inventor of shorthand, determined that only 700 words produces 80% of our conversation. Stick to the small talk because information overload makes it easy to create bafflement these days.
- The Titanic Principle – 80% of your revenue originates from 20% of your customers. Find out who they are and begin ignoring the rest. (thanks to John McNally for the title)
- Busy Is As Busy Does – 20% of your employees produce 80% of your company’s results. Please do not treat people equal because it burns bridges with your best employees.
- Stop It, Stop It, Stop It – 80% of your personal income will originate from 20% of your effort. Get real good at figuring out what practices you should pull the pin on.
Contrast Man, That’s What Life Is All About
Just by understanding distribution of results compared to activity we can seriously improve our stations in life and when one really thinks about it, wasted effort is not only fruitless but detrimental because the time spent doing the wrong thing might be far better invested in another activity. Like maybe rest or relaxation, for example…
I strongly urge you to seriously ponder this concept because I know it will enhance your life.
And it works at least 80% of the time.
Thank you, friend.
PS. The ebook link below is an excellent online publication by Richard Koch. It contains over 300 pages of everything you need to know on the 80/20 rule. Read it and improve your life!