Today’s societies are in a bigger hustle and bustle. Although developing technology seems to facilitate the lives of individuals, it increases the occupation of individuals. Today, the continuing rush affects individuals’ focus on what they want. Focus, efficiency , managing, business life, nutrition etc. In order to overcome the problems, we come across the 80-20 rule. This rule is also called the Pareto principle.
The 80-20 rule gives a statistical meaning to individuals at first glance. In fact, it cannot be said that it is very different from the discipline of statistics . Here, we have a nice situation about the 80-20 rule. In order to apply Pareto principle, statistician etc. is that you don’t have to be. Although it benefits from the discipline of statistics, only experts, professors, etc. it is not a whole set of rules to understand. Yes, this rate was first observed in the economy discipline. Then, it was observed that the 80-20 rule works by using other subjects. It has been observed that it works for many subjects that touch the lives of individuals and how individuals make their lives more beautiful.
So, what is the 80-20 rule or Pareto principle that we have been talking about since the beginning of the article ? Let’s see how the 80-20 rule makes our lives beautiful.
What is the 80-20 Rule?
The 80-20 rule, or Pareto principle, was proposed by the Italian economist and mathematician Pareto. Therefore, it is also called the Pareto principle. He revealed after examining the income distribution in Italy . He found that 80 percent of the Italian territory belongs to 20 percent of the Italian population. He later realized that this invention worked in many different areas. At that time, there was an imbalance that could be foreseen everywhere . This situation, which is defined as income injustice, is still valid in today’s world. Today, 20 percent of the world’s population has 80 percent of the world’s total wealth.
In the economic discipline, 80 percent of the outputs, 20 percent of the inputs; The idea that 80 percent of the results will stem from 20 percent of the causes is called the 80-20 rule or the Pareto principle. The 80-20 rule means that 80% of the products are realized by 20 percent of the resources. As I mentioned in the article, the Pareto principle exists not only in the discipline of economics but in almost every field. For example, 20 percent of products sold in business make up 80 percent of firm profit. To give another example, 80 percent of traffic accidents are caused by 0 percent of drivers. It is possible to increase these examples, but the important part is to simplify life to find 20 percent of the results. In fact, the Pareto principle tells us “More than 20% of the reasons that make up 80 percent of the results is simplifying life. That is, finding the right minority is very important for us. Focus studies should be started on the subject.
So, how can the 80-20 rule, the main question in the title of the article, make our life beautiful? Let’s answer the answer to this question, even if we mention the above a bit. Today, most of us measure our quality of life by being happy. But by spending most of our time on things that do not make us happy, we exhibit contrasting behaviors to ourselves. So let’s ask how the Pareto principle makes our lives beautiful. 20 percent of what we do constitutes 80 percent of our happiness. Accordingly, if you find the answer that suits you and do more, your life will be better. After learning about the 80-20 rule, let’s see how this rule affects us in different areas of life.
What are the 80-20 Rule Applications?
Pareto principle, as I have always mentioned, is valid not only in the discipline of economics, but in almost all areas that touch our lives. With this rule, we can solve the secrets of beautifying our lives by being aware and focusing or simplifying life. Pareto principle is used from nutrition to the real estate sector, from business life to computer science, from management to many application areas. Thanks to the 80-20 rule applications, you can understand the logic of this rule, use your potential more accurately, and increase your performance and achievements.
So, in which areas can we apply this rule? What are the 80-20 rule applications?
- Nutrition: I wanted to talk about nutrition in the first place among the applications of the 80-20 rule. It will be a good example to talk about how a famous business person is fed correctly thanks to the 80-20 rule. At the same time, you will have an idea about the applications of the 80-20 rule. A senior manager working at a renowned beverage company uses the Pareto principle to stay fit. 80 percent of the nutritional habits compose the right nutrients required for the body. This senior manager consumes 20% of the food that he craves. In his interview, the manager states that he uses the 80-20 rule to determine his behavior and decisions.
- Real Estate Sector: Real estate sector is among the applications of 80-20 rules. It is necessary to know how best to use the concepts of time, energy and money to develop your business in the real estate sector. In addition to these concepts, it is necessary to manage daily events accurately and effectively. In this case, it is quite corrosive to real estate consultants. There is of course a way to reduce the effects of this corrosive situation. Here, 80-20 rule comes into play. Thanks to the philosophy of this rule, you can focus better and grow your business.Most importantly, you can devote necessary attention to your private life. Only 20 percent of your efforts ensure you achieve great results. Efforts to be found in 20 percent of a real estate consultant are as follows; Prioritizing and adding new contacts to your database, sending regular emails to the best and newly acquired customers, and achieving emotional security. Sending regular emails to your customers means that you are interested in them. It is also very useful to create an emotional guarantee by buying a house gift when your customer buys a house.
- Computer Science: Computer science is among the applications of the 80-20 rule. This rule is used in optimization applications in computer science and control theory in electromagnetic energy converters.
- Quality Control: Among the 80-20 rule applications, there is also a quality control application. It is the basis for the Pareto chart, which is one of the key tools for holistic quality control and six sigma . This rule is used for transportation, storage and replacement costs. It also serves as the basis for ABC analysis and XYZ analysis, which is widely used in the procurement process for the improvement of warehouses.
- Management: There is also administration among the 80-20 rule applications . The most used area in management is the strategy area. It also needs to focus on the top 20 percent of products and customers. Spending more time on a small number of jobs with more returns is also in favor of the management approach.
What is its Impact on Business Life?
Pareto principle also has effects on business life. This rule is seen as a must for maximizing total performance. The effect of this rule on business life, services or products that make up the majority of income, that is , a 20 percent segment should be determined. Those who still have the remaining marginal benefits must be ignored. Its impact on business life pushes changes to the concept of time. It allows you to spend your time on parts that you can develop with your core competencies. It also allows others to do work outside of 20 percent.
One of the most important places about the effect of this rule in business life is that you spend the most effort on those who will bring you the most value. The effect of this rule on other business life is to reward those who are successful among your employees and remind them that employees who do not work are indispensable. The effect of this rule on business life is that it enables you to improve your services and products for the customers who make up the majority of your income, rather than the customers with low income.
The effect of this rule on business life is that firms grow very profitably and rapidly. Choosing a small portion of the current market leads to big and unexpected results for the company. In this case, it gives us an idea about the effect of rules on business life. If we want to know about the effect of this rule in business life in general, let’s look at which companies used this rule or they used it in the period of promotion. For example, Microsoft, Dell, Coca-Cola, Nike, Royal Bank of Canada, Toyota, Amazon.com etc. can be counted as. When we look at these companies, we see the biggest and most profitable companies in the world. In this case, it gives us a general impression of the effect of this rule on business life.
The effect of this rule on business life is that it allows companies to focus on the most profitable 20 percent of customers, products and activities. The fact that it increases the business volume and provides great increases in revenues gives us information about the effect of these rules on business life. It can also be stated as the effect of the business life by ensuring that the company focuses on the best functioning subject and to increase the competitiveness of the company by doing it better. After learning about the 80-20 rule and its impact on business, let’s learn what to do to turn this rule into a lifestyle.
About Converting to Lifestyle
Individuals can better understand how effective this rule is in their life when they analyze their experience and break it down into smaller pieces. The important point here is to reveal the dominant characters that provide your happiness. At the same time, however, it is to ensure that everything works in harmony and to avoid spending time on 80 percent of your less satisfying activities . In short, it is necessary to focus on the activities that give you the best results in order to turn these rules into a lifestyle . In order to transform it into a lifestyle, you need to put these things into practice in both private and business life.
One of the most common problems of individuals in today’s society is how to build their lives on what they love. There is a human profile within the perception of society. The person in this profile; A person who does every job for the desire to be discovered, works during terrible working hours and turns into a famous name. According to this profile, the proportion of those who have passed through these stages and are really famous is governed by the 80-20 rule. Only a very, very small percentage of these people can achieve a reputed life. The same is true for entrepreneurs.
Today, individuals mostly work in jobs they dislike, are exposed to long working hours, and spend little time on their passions. It is a great opportunity to turn these rules into a lifestyle. Individuals who are in the specified situation have to transform these rules into a lifestyle in order to spend more time in their passions and achieve success. If you want to get rid of the bad situation and turn these rules into lifestyle, what you need to do is;
- You should learn to focus on passions, not material assets . What you need to do is determine what you are passionate about. After this stage, working wisely to have a great feeling of satisfaction. This can only happen thanks to the 80-20 rule. As long as you can apply this rule, you can get the chance to become someone you want and achieve fame.
- To have information about outputs and inputs. There are many inputs and outputs in life. If continuous outputs are more, you cannot create a passion. To turn this rule into a lifestyle, you must position events that turn into passion in your life. Because with the passions you have, you can produce new outputs that others will enjoy.
- It is very easy to turn these rules into a lifestyle by overcoming your fears. The factor that prevents most individuals from pursuing their dreams is fear. You should not let your fears outweigh your goals. Reconsider your inner passion in your mind and try to get rid of the money equation. Surround your life plans with activities based on the 80-20 rule. In general, what needs to be known to transform these rules into lifestyle can be listed as such.
What is the 80-20 Rule?
In the economy discipline, 80 percent of the outputs, 20 percent of the inputs; The idea is that 80 percent of the results will stem from 20 percent of the causes. 80 percent of the products are realized by 20 percent of the resources. This rule touches almost every area in our life.
What are the 80-20 Rule Applications?
Nutrition can start as the real estate industry and computer science. Then quality control, management, economics, business life, etc. continues as. They have applications in almost every aspect of our lives.
What is the Impact of this Rule on Business Life?
It allows us to maximize total performance. It allows you to spend the most effort on those that will bring you the most value. It enables companies to grow very quickly and profitably.