80 20 Rule

80 20 Rule

Hey, it’s Jackson. We’re back with more tools that you can use to create a high-performing culture of well-being. This applies to, of course, your team, your organization, but also to you individually. And what I’m about to share, kind of a mental model, is I think one of the most powerful insights or principles that I’ve ever come across in all my studies of business, science, psychology, philosophy, everything. And it’s called the 80/20 rule. I’m going to tell you about how you can also apply this to your work and your life.

A quick story on this. I was giving a training, and I asked someone in the audience, just off the cuff, I said, “You know, I have a hunch that when it comes to your recruiting for the military kind of productivity, something like 20% of your recruiters recruit 80% of the new soldiers, and the remaining 80% of your recruiters just kind of get all the rest in smaller doses.” Well, some of the audience were like, “How did you know that?” “I’m guessing that 20% of your clients lead to 80% of your revenues,” etc. And that’s because this is a common pattern known as the Pareto Principle or the 80/20 rule. You can Google it, go down that huge rabbit hole, but I’ll give you the summary here. It’s exactly that there’s a non-linear, a non one-to-one relationship between inputs and outputs. This was actually discovered by an Italian economist many years ago when he was in his garden and he noticed that a small percentage of his pea plants were accounting for almost a hundred percent of the peas. And you can see this pattern everywhere in economics. Usually, it’s like two percent of the people own 95% of the wealth, everything about populations, maybe one percent of towns or cities have 97% of the population. So, important thing to point out, the numbers don’t always have to add up to 100. They aren’t always 80 and 20. Right? Maybe I say there’s a couple of activities I do every day that lead to the vast majority of my successes. It’s not always that specific, but maybe you can start to see that pattern, right? Another one might be 20% of people or ten percent of employees lead to 80% or 90% of the problems. So, this pattern is everywhere. It’s in economics, it’s in the natural world, it’s also often in psychology and organizations. And so, starting to see things through that model, again, I’d encourage you to Google it, watch a few videos on it. They give plenty more examples, but it’s a really powerful concept.

But here is how you can strategically use that and apply it. We’ll talk about a work application first. So, this is the point where you’re going to want to think about breaking into pairs or groups of anywhere up to five people because I have a few discussion questions for you. Number one, with work, what would you say, and maybe take a note of these, what are the 20% of activities that lead to 80% of your outcomes? What are the 20% of your activities that lead to 80% of your outcomes? And again, it won’t necessarily be like exactly 20%, but it’s essentially saying often we get bogged down with a lot of things we have to do. We got meetings, we got emails, we got all these things. But what is the really important part of your performance that you’re assessed on? And what are the few activities that really lead to that? The second piece under the work category is, what are the very few activities that would lead to 80% or 90% of the outcomes with respect to building connection with people and building the culture you want on your team? So, another good example that might be, well, if I were to just actually once a day stop and have a really meaningful 10-minute conversation with someone where I asked about how they were doing personally, that would have an outsized impact on the culture of my team.

So, on the work side, your two reflections: What are my Pareto 20 activities that lead to my most important outcomes? And what are my Pareto 20 activities that lead to building the type of culture and connection I want for my team? Okay. And I promised you a Life Application too. That’s the second part of this. When you think about your happiness, your quality of life, you know what really matters to you, again, there’s often this Pareto 20 thing. If you think about all your friends or people you know, maybe it’s only a few of them that kind of lead to the outsized happiness, right? So, it’s like, I maybe know a hundred people, but it’s really my family, two or three best friends, and my parents, for instance, that kind of have the greatest impact on my quality of life. So, when you think about your happiness, is there an activity, is there a person, is there a thing, an interest, whatever that kind of, again, represents that essential Pareto 20 that has a very outsized impact on your happiness and quality of life? Can you identify that and can you create time for more of it?

So, that’s part two. There you have it. Part one, you got your work Pareto analysis. Part two, you got your life Pareto analysis. So, reflect on each of those questions and bring them to your partner, bring them to your group, and just talk through them for a few minutes. See what comes up. And I think this could be a very, very high-impact activity for you. And that’s it. I’ll see you next time.