Question

Describe the 80/20 rule and explain why it is important to you in both the short run and long run.Write short answer

Answer 1

The 80-20 rule, also known as the Pareto Principle, is an aphorism which asserts that 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event. In business, a goal of the 80-20 rule is to identify inputs that are potentially the most productive and make them the priority. For instance, once managers identify factors that are critical to their company's success, they should give those factors the most focus.

Although the 80-20 axiom is frequently used in business and economics, you can apply the concept to any field—such as wealth distribution, personal finance, spending habits, and even infidelity in personal relationships.

The 80/20 rule can help you identify where the majority of your time, money or energy is best spent. Using the 80/20 rule, you can determine achievable goals and outline specific tasks to reach them and stay focused on what makes the most impact. Here are just a few benefits the 80/20 rule provides:

• Improved time management: By identifying tasks that yield the most results, you can organize your day to focus on tasks that have the most significant impact on your work.

• More effective leadership: If you want to improve your leadership skills, you can use the 80/20 rule to make time for socializing with your team, serving as a mentor and seeking other opportunities to build trust and team unity.

• Better use of company resources: The 80/20 rule can help you better utilize your company’s time and efforts to research competitors or industry trends, streamline hiring procedures and improve company culture.

One of the most important things an individual can do to become more effective is learning how to prioritize tasks both for himself or herself and for the people he or she manages in short run and long run. Managers and their subordinates must learn how to organize their task into different categories of importance. A good rule for this is the Pareto principle (80-20 Rule)