The 80/20 principle in corona times

The 80/20 principle is one of the most efficient methods to gain a better insight into your own life, your work environment, organisation or business. Those who have a firm grasp of this principle arrive at profound insights, whether about their own happiness, the collaboration with colleagues, their product offer or customer portfolio.

In these corona times that are forcing us to rethink everything, this tool is more useful than ever. The 80/20 principle goes to the heart of the matter and strips it down to the bare essentials. This will be absolutely crucial in post-corona times as well.

What is the 80/20 principle?

Around 100 years ago, economist Vilfredo Pareto made an interesting discovery: he found that 80% of all wealth in Italy was concentrated in the hands of 20% of the Italian population.

That is why the 80/20 principle is also known as the Pareto principle: 20% of the effort yields 80% of the result. This is a rule of thumb that applies to practically everything. Don’t take the 80% and 20% too literally though. It can also be 90% and 10%, or 65% and 35%. The general idea is that just a small percentage of our efforts are responsible for the lion’s share of the results.

Conversely, 80% of our effort (input) generates just 20% of our results (output).

For instance, 20% of the videos on YouTube is responsible for 80% of visitor numbers and 20% of all cars accumulate 80% of all kilometres travelled by car, etc.

You can also apply the principle yourself in various areas.

Your customer portfolio

• Which 20% of your customers bring in 80% of your turnover?
• Which 20% of your customers bring in 80% of profits?
• Which 20% of your customers are responsible for 80% of complaints?

Your employees

• Which 20% of employees achieve 80% of the result?
• Which 20% of employees account for 80% of sickness absence figures?
• Which 20% of meetings or forms of consultation contribute to 80% of the result?

Your products or services

• Which 20% of the products generate 80% of your turnover?
• Which 20% of the products secure 80% of the profits?
• Which 20% of the products are responsible for 80% of complaints?

Your personal life

• Which 20% of your friends are responsible for 80% of your fun social contacts?
• Which 20% of your time gives you 80% of your quality time?
• Which 20% of your activities contribute to 80% of your happiness?

Business travel

As business travel experts we are convinced that the 80/20 principle can bring solace here as well. It enables you to further optimise your business travel policy. Here are some of the questions you might ask yourself:

• Which 20% of your employees go on 80% of your business trips?
• Which 20% of destinations account for 80% of your business travel?
• Which 20% of airlines account for 80% of your airline tickets?
• Which 20% of hotels account for 80% of your overnight stays?

A better insight often results in valuable savings because it enables you to optimise your policy. Fortunately, you’re not alone in this and you can count on our expertise every step of the way.