What is 80/20
By: Hubert Crowell
You may ask what is 80/20? It could be 89/40 or 300/30, but 80/20 looks better and sounds good. The numbers do not have to add up to 100 and in fact we are talking about two groups that are compared to each other.
The pattern of 80/20 was discovered in 1897 by the Italian economist Vilfredo Pareto. His discovery has been called many names, the Pareto Principle, the Pareto Law, the 80/20 Rule, the Principle of Least Effort and the Principle of Imbalance. He was looking at patterns of wealth and income in nineteenth-century England and found that most income and wealth went to a minority. This was not surprising, but what was surprising was the fact that the distribution of wealth was predictably unbalanced. And the unbalance was about 80/20 with 20% having 80% of the wealth.
Other pioneers after World War II took this study further and was accepted by the Japanese corporations who began to challenge the U.S. industry. In the 1960's onward the U.S. and other industrial nations began to use the 80/20 Principle to improve products.
The 80/20 Principle asserts that when two sets of data, relating to causes and results, can be examined and analyzed, the most likely result is that there will be a pattern of imbalance. It may be 65/35, 70/30, 75/25, 80/20, 95/5 or 99.9/0.1 or any set of numbers in between. They do not have to add up to 100!
Whether you realize it or not, the 80/20 Principle applies to your life, your social world and to your work. Understanding it will give you great insight into what is really happening around you.
The chaos theory which help explain the 80/20 Principle, does not say that everything is a hopeless mess. There is a self-organizing logic lurking behind disorder, that some called spooky, eerie, and terrifying exact.
With every thing we do in life, producing a product, developing a new social habit such as jogging or excising, we reach a point where it is difficult to make headway. A great deal of effort generates little if any results. At this point many give up, but if you can persist and cross the tipping point, a small amount of additional effort can reap huge returns. Runners refer to this as getting their second wind, at that point they can run forever.
The tipping point is were we can reap much benefit from understanding the 80/20 Principle.
Did Jesus know the tipping point when he feed the five thousand with five loaves and two fish? Luke 9:10 may be the greatest example of the 80/20 Principle taken to the extreme. How productive could we be if we could find the tipping point in our lives?
Assignment: Read Chapter 1 of The 80/20 Principle, By Richard Koch, ISBN 0-385-49174-3
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Optional Exam: Explain the tipping point in the 80/20 Principle.
For more information on the 80/20 Principle visit: http://www.the8020principle.com/
Course Outline
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