Shocking News! the “80-20 Rule” is 80% Over-used and 20% a Waste of Your Time

If the “80-20 Rule” is not the most over-used cliché in business today, I don’t know what is.  No matter what the situation, the “80-20 Rule” is the magic solution to your problem.

Too much on your to-do list?  Use the 80-20 Rule.  Do the 20% of things that get you 80% results!

Are your customers driving you crazy?  Use the 80-20 Rule.  Serve only the 20% that brings in 80% of your revenue.

And so on . . .

The problem with the 80-20 Rule is that it seldom addresses the real problem.  We accept the advice at face value, nod our heads in agreement and use the principle to quickly eliminate a bunch of work from our lives.  Afterward, we aren’t much better off than before.  Here’s why . . .

The 80-20 Rule assumes that you know what you’re doing in the first place.   Most people can sit down and create a to-do list and prioritize it.  Figuring out what actions we think will bring the majority of results is not the problem.

We Don’t Do The 20%

The problem is that we often intentionally avoid doing that one thing that would bring the most results.  This is a motivation problem.  The 80-20 Rule doesn’t solve that.  Focusing on the prize – the reason to follow through – that helps solve the motivation problem.

We Don’t Know What the Right 20% Is

What about when we don’t procrastinate?  We might just be taking the wrong steps to get what we want (i.e., we’re doing the wrong 20%).  The 80/20 Rule doesn’t solve that either.  Understanding the cause-and-effect relationship – which actions bring which results – that helps solve the wrong 20% problem.

If Truly Applied, It Leads to Doing Nothing

The 80-20 Rule is also a logical dead-end.  Let’s assume you apply the 80/20 Rule to reduce your customer burden.  What happens after you apply it?  Do you re-apply the 80-20 Rule to optimize the 20% of customers that remain?  And then again?  Until you reach the point of only serving one or two customers?

Of course you wouldn’t do that.  Why?  Because the question isn’t, ” How do I eliminate customers?” Each customer is bringing you incremental money.  You are looking for a way to serve them.  The real question is, “How do I allocate my resources to serve my customers optimally?”  The 80-20 Rule doesn’t solve that.  A quick customer segmentation analysis would.

Don’t Be Hypnotized!

The next time someone throws the 80-20 Rule in your lap, don’t nod your head and sheepishly go along with it.  Sound the warning bell.  Stop and figure out what problem you’re really trying to solve and choose a better tool for the job.