Friday, April 23, 2021
Life isn’t fair, unless you are Pollyanna. Then life is pretty much all fair, all the time.
Pareto principle is an observation which states that most things in life are not evenly distributed. People generally refer to it as the 80/20 rule.
This means that 20% of the input gives 80% of the results, 20% of the bugs cause 80% of the errors, 20% of the meetings give 80% of the solution, 20% of the employees are responsible for 80% for the revenue generation etc. etc.
Here, The numbers 20 and 80 are just used to represent the average scenario. Hence the figure should not be taken literally. It is highly possible that in a company of 100 employees only 20 work while the 80 goof around. Therefor 20% of the people bring 100% of the revenue.
In a perfect world, each employee should be responsible for bringing in the revenue, every bug should be equally important, every meeting should give be equally effective, every asset should return equally…..
However Life isn’t fair.
The key point is that each unit of work (or time) doesn’t contribute the same amount.
The 80/20 rule observes (not a law) that most of the things in this fragile world are unequally distributed. Out of 100 things, only 20 can be categorised as cool which will result in majority of the impact.
For example:
Only a handful of people contribute in the group project which makes it successful.
A very small fraction of people in the country pay their taxes which helps the government generate revenues.
Because of the greedy-opportunistic mindset of a few people, the entire population suffers at the time of a national emergency.
A small group of intellectuals are behind a startup which goes on to provide employment to thousands of people in the future.
A handful of bugs generate majority of the bugs. Rest are just warnings.
Only a few people in your life brings you happiness. Keep them close.
20% of the assets in your portfolio brings you 80% of the returns.
And the list goes on…..
Of course, this ratio can change. It could be 80/20, 90/10, or 90/20. The key point is that most things are not 1/1, where each unit of input (effort, time, labor) contributes exactly the same amount of output.
Pareto Principle observes that majority of the results come from minority inputs. Therefore the focus should be on 20% of the input that is giving you the maximum ROI. The point is to realize that you can often focus your effort on the 20% that makes a difference, instead of the 80% that doesn’t add much. Channelize your energy in the right direction to yield maximum returns.
For example:
Instead of spending 1 hour writing a blog, which you thing is not a good one, spend 10 minute researching about the idea and 50 minutes on writing.
Instead of agonizing 3 hours on a single design, make 6 layouts (30 minutes each) and pick your favourite.
Rather than spending 3 hours to read 3 articles in depth, spend 5 minutes glancing through 12 articles (1 hour) and then spend an hour each on the two best ones (2 hours).
Instead of spending a week on one project (which you are not sure of), spend a day or two exploring different ideas and the rest of the time working on the project.
The point is to realize that you have to focus on 20% of the input that will reward you with the maximum output.
Explore and analyse WHAT generates HOW MUCH and then ACT!
See you next month.
Cheers!
Some things that you may find interesting-
Article I am reading: Millions of Jobs Are Going Away, But Universal Basic Income Isn’t the Answer by Sam McRoberts
Thought I am pondering upon: We have elected to live in a society where people are free to make their own choices, let's respect the choices other people make.
Song I am listening to: Since We’re Alone by Niall Horan
Quote I am enjoying: “Not only is happiness not money, it is not even like money.”
Here are the last three posts if you were too occupied to read them:
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