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Life Changing Magic Of The 80-20 Rule


What is the 80-20 rule and can it make 80% of work disappear?

What you’re going to learn:

  • How to identify which projects or goals are most important to your organization and which ones are going to get you that promotion
  • How to apply the 80-20 rule to your work as a freelancer

Key Quotes:

“Don’t try to do everything at once.”

Read Full Transcript

Hey I’m Kevin Kruse, and I am here to 10x your productivity at least in key areas of your life and to dramatically increase your productivity everywhere. Today I’m extra high energy because Saturday night I did something I don’t usually do I went to an NBA basketball game. I’m outside of Philadelphia, so I went and watched the Philadelphia 76ers play the Detroit Pistons. Don’t worry this isn’t about basketball. If you don’t follow American basketball, if you’re listening from some other part of the world and don’t even know the teams or what I’m talking about it’s okay. I only got to about 1 or 2 games a year. I like to go with my friend we take our boys have a good time.

The Sixers this year are horrible. They’ve won the worst records in the history of the NBA, but we were there for fun games get out to have some cheese steaks and just relax. It was a good game it was a fun game but what made me take notice is all over sudden this short kid for the Sixers comes running out onto the court and the entire pace of the game changed. This guy his name is T.J. McConnell; he all over sudden starts racing up and down the court like someone’s chasing him. I mean all the sudden he’s going for steals, he’s only 6 foot 2 and he’s jumping in trying to get rebounds, he’s making crazy plays I mean he’s bringing it.

It’s like nobody told them that the Sixers are going to be in the last place no matter what happens. No one told them that the game didn’t really count. He was bringing it no matter what. Like I said I don’t follow the Sixers or basketball that much so I’m Googling this guy, turns out he’s a rookie he was undrafted. As I mentioned only 6 foot 2 he used to play for Arizona I believe, has no profiles on social media. He’s not out there trying to be a star or anything else. That might be a mistake but as soon as he took the courts the entire energy and mood of the game changed. You might not be the star on your team, but you can always bring the energy you might not be the tallest or most naturally gifted.

You can always set the pace you might not have the best jump shot or whatever the analogy is in your career you, but you can always set the tone. This is the underlying secret of productivity. There is no such thing as time management. We can’t control time, but we can control our energy and focus. You take two people with the same 1 hour and the same to do list to burn through in that 1 hour. You take someone who’s feeling tired, and lethargic, and is multitasking, and is low energy. I’m sounding like Donald Trump accusing people of being low energy, but anyway, you take the other person like T.J. McConnell, who I’ve never heard of before this undrafted 6 foot 2 rookie, and you decide to bring it. You are high energy you’re focused you’re not multitasking you’re loving what you’re doing you’re trying to beat the clock.

Who’s going to get more done? It’s the same 60 minutes, it’s the same 1,440 minutes in a day, it’s about bringing focused energy to the task at hand. Hats off to T.J. McConnell, and he’s my new favorite player. I hope he’s got a jersey or something out because I’m going to get it. Listen, in the last episode, I talked about the 6 secrets to stop being so overwhelmed new book for my friend Kelly Exeter. If you didn’t hear that episode listen to that one after this one. It’s not going anywhere so you can wait. Today I’m going to talk about the very real possibility that you might just be able to make 80% of your workload disappear. You just might be able to ignore it or, at least, give it to someone else.

First, you know I want you to have that one-page planning tool that millionaires use to schedule their day. I want to stay in touch with you. Just text the word achieve to 44222 or open up your web browser and go to that way I can send you this quick start action plan you can 10x your productivity and the world will be a better place. Alright, what is the 80-20 rule and can it make 80% of work disappear? Here is the story behind this concept not already knows the story even if you’ve heard of the rule. There was a guy named Pareto, he was born in Italy in 1848. He was a business manager and all the rest but in his 40’s kind of an old guy by 1848 standard he became an economist, he started doing more serious work.

Legend has it that one day he noticed in his own personal Garden that 20% of the pea plants gave him 80% of its healthy pea pods. Twenty percent of the plants out produced 80% of the plants. He started thinking about this rule in nature of uneven distribution. He started doing some digging in the files in research among Italian landowners. He found out that 80% of the land in Italy was owned by 20% of the population. He then investigated different Industries and found that usually 80% of production came from just 20% of the top companies in that industry. He came up with this generalization 80% of results come from just 20% of the action.

People started to look around and apply this rule of thumb to a lot of different areas, and you could probably see it yourself specially if were a small-business owner, medium-sized business owner. Twenty percent of sales representatives are usually the ones that are getting you 80% of your sales. You have a 100 sales reps most of your sales are coming from about 20 of them. Twenty percent of your customers generally account for 80% of total profits. Some customers are a pain in the butt, they’re difficult to work with, they complain, they need special customization, they don’t pay their bills. Those are money-losing or low-profit customers others they’re ready to buy off the shelf they pay cash their dream customer dream clients.

Twenty percent of your customers are accounting for 80% of your profit. In software, 20% of the software bugs reported are generally the ones that cause 80% of software crashes. If you want to stop your software from crashing you don’t need to fix all your bugs, you need to fix those 20% that are causing 80% of those crashes. Let’s look at healthcare, today in the United States 20% of patients account for 80% of all healthcare spending. By the way, 5% of all patients account for 50% of all of our healthcare spending. Over half of our healthcare spending is going to a very small number of patients.

Look I like to personalize everything right so here’s are some examples from my own life. Think about whether they apply or you have something similar in your own life. I own about I think 5 very expensive amazing suits. I don’t suit up very often unless I’m going out on a speaking gig or something. Eighty percent of the time when I need a suit I just grab my black very well-tailored single-breasted Armani suit I grab the same powder blue shirt. Even though I’ve got 5 suits, I don’t rotate I just keep grabbing the same suit 1 out of 5 suits all the time.

For you ladies out there how many shoes do you own, how many high heels do you own? I’ll bet you probably grab the same 20% and wear those over and over and then there’s others that you we’re almost never. I’ve got 15 rooms in my house and about 80% of the time I spend in just the bedroom family room or my office that’s 20% of my rooms. I don’t know how many miles of roadway are Highway are in and around my town, but I’m sure I drive on less than 20% of them. I go to the school, I go to the grocery store, I go to the bank ,I go to the gas station, and that’s about it and then the airport.

On my smartphone, I counted about 48 different mobile apps but 80% of the time I’m only using the 8 apps that are on my home screen. Look, this 80-20 it’s not always exactly as you start to look at your own sales reps in sales or as you start to look at your own life practices. It’s more about the point of uneven inputs and outputs. In fact, it all started we talked about Pareto looking at wealth distribution and of course, in the United States it’s a big topic right now is the growing wealth gap. As of now it’s not 80-20 that would seem pretty equitable by today’s standards.

As of now in the United States, .1% one-tenth of 1% of Americans own 90% of the wealth, the same amount of wealth as 90% of all other Americans. That’s not even 80-20, it’s 90 and .1. When I was doing all those interviews with the Olympic athletes, the self-made millionaires, the straight A’s students, and others. They were all using explicitly or not they were using some form of the Pareto Principle. They’re all distinctly aware that listen we only have 1,440 minutes in a day, and there will always be more to do. There is always more stuff that can be done that we’ll never get too.

It’s not like you just work and try to get everything done, you will never get everything done. A strategy is like when is enough enough. Use 80-20 use the Pareto principle as a way to help you figure out the core things you need to be working on and then let the rest go or delegate it if it does have to be done. How can you apply it, how do you apply this into your real world? Listen if you’re an executive you’re a team leader in a large organization a company, not all projects are equal instead of trying to do the impossible. Instead of you trying to do everything or have your team do everything.

Instead, a Pareto approaches is to understand which projects which goal are most important to your organization which one’s align to your organization’s goals. Which projects or goals are most important to your boss, right? like some things are going to be scrutinized something things she’s asking you about for follow-up and tracking the progress. Others she hasn’t asked you in about 6 months so not all things are created equal. Understand what are the 20% of projects 20% of goals 20% of tasks that you need to personally stay on top of because they’re going to get you 80% of your bonus of your evaluation of your outcomes and then the rest delegate it to others or drop it in entirely if you can.

If you’re a freelancer startup entrepreneur this still applies to you I mean money is time. Use the Pareto Principle to understand who your best paying clients are. It’s always going to be easier to sell more stuff to an existing customer than new stuff to a new customer. Don’t burn yourself out focus on quality work with fewer project and fewer customers and entrepreneurs in general. I’ve got an idea every single day for a new gazillion dollar business whether it really would be who knows but I still have those ideas. Entrepreneurs need to focus just stay focused in your one area until you’ve maximized the results from that area then expand your marketplace.

I can remember years ago to being in a board meeting and supporting the CEO. The CEO presented to the board this idea of we’re going to … we were in the United States software company, and he says “okay now here’s our plan we’re going to open up offices in Europe to expand.” He went through this whole presentation about global expansion, and finally, one of the board members raised a hand and said “when you only control about 2% of the market in the United States is it a little easier to grow your market here in the United States before you decide on flying across the Atlantic and dealing with different cultures and languages and currencies and Technologies and everything else. Why do you want to do that?”

That was the end of our global expansion plan. He didn’t use the words, he’s basically saying stay focused don’t try to do everything all at once. This is a powerful principle even in your personal life. You could be a stay-at-home parent or just a busy homeowner trying to do it all at home. The never ending chore list the Honeydew list right? Think about that 80-20 rule, I think about let’s say yard work. I’ve got one neighbor in particular who spends every morning night weekend out in his yard. I’m hoping he enjoys that I hope that’s like a hobby so good for him if it is.

When I look around my neighbors yards and my own yards I drive up and down the street what do I notice? I notice that someone needs to mow their lawn or if they’ve got really tall weeds growing around. Other than that I don’t notice if the bushes have been trimmed a little bit, I don’t notice if they’ve got fresh flowers by their doorsteps, I don’t notice if they fertilize their lawn right? There are two things long weeds and mowing their lawn that would get them 80% of the beauty of their front yard, and they wouldn’t have to work on all those other things. Again if you enjoy doing it, that’s a different story. What 20% of your to-do list items at work and at home drive 80% of the outcome? Eighty percent of your reward 80% of your happiness. Alright, I hope you tell a friend about this episode.

There’s got to be someone you know who is too hard on herself always trying to get it all done. Someone who foolishly thinks she can just keep adding more things to her to do list and that she will do them all. Just send her to so she can listen to these other episodes. She can also text the word achieve don’t forget about that way, text the word achieve to 44222 and that will get her signed up as well. Do it so that you both can listen to the very next episode its doing to be a funny one. I’m going to tell you about who I call the world’s biggest slacker and how he won company awards for excellence while he goofed off 8 hours a day surfing the web. Strange but true tale of unusual productivity. Until next week remember master your minutes to master your life.