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Ye Olde Eighty-Twenty Rule
Note:this grump was originally published in August 2015, and updated in November 2018

What the eighty twenty rule is and how Mangement use it in all manner of situations

This rule has been one of the most fundamental concepts ever discussed on management courses, and frequently quoted by business management in business planning. In a roundabout way it is frequently used in the justification of cost saving exercises.

I must admit this is not really a grump, but it occurred to me that, of those currently planned, many are influenced or caused by the inept and rigid application of this eighty-twenty rule. The rule is so fundamental that it must have been around for donkeys yonks, which is why I call it "Ye Olde eighty-twenty rule". I suppose you could almost say that early agriculture probably stemmed from a very basic understanding of this rule. For example, ancient man would find he could get most of his food from very basic and simple agricultural tasks. I'm sure he was sufficiently observant, savvy and capable of joined up thinking to associate the fact that he put a lot of energy in at the beginning of the year and that was about it. Survival ceased to be busting a gut tracking and trying to kill something the size of a mastodon each week, but more like harvesting the fruits of his own labour at a time that suited him.

In simple terms, the rule suggests that of your total return, eighty percent originates from twenty percent of your investment. If you think about it, you will realise that this concept applies to a huge swathe of activities in which we indulge and in some way applies to most things that we do in life. Mind you, one must never lose sight of the corollary to this rule i.e.; in order to achieve the remaining twenty percent requires a further eighty percent of the effort. (One could say to achieve the remaining fifth, one needs to expend an additional four times the effort you have already expended).

Let me give you one or two examples of this rule

You will get eighty percent of total profit from twenty percent of your turnover.

You will get eighty percent of total output from twenty percent of your staff.

If you are cleaning, your house will look quite acceptable for twenty percent of your effort, if you put in four times the effort again, you can probably be able to eat your dinner off the floor!

When you are cleaning windows it is very easy to get the worst of the grot off the outside of the window. However if you rush it, when you go inside you will see that there are smears in the corners. These smears will take ages to remove.

Thus goes the eighty-twenty rule, not always absolutely eighty and twenty, but the general 'idea' holds.

Note:this grump was originally published in August 2015, and updated in November 2018

a perfect example of the eighty twenty rule is, I believe, in the process of unfolding and relates to Brexit. click here to go to Bigbro5-2 where you will find detail on what's happening with the Brexit negotiations. Recently the British Prime Minister announced that she believed 95% of the negotiations were complete. It remains to be seen whether achieving that last 5% will take a huge amount of time and effort. Grumpy believes that it will, however, the initial delay will not come from that old sparring partner, the EU, but will come from her own Cabinet, the DUP in Northern Ireland or from one, or both of the Houses of Parliament. Grumpy is still of the opinion that any deal that is tabled has a long way to go before reaching that state. It is also perfectly clear that once an "agreement" had been reached, this will be just the starting point of the PM's problems. Time will tell! Either way this is a prime example of how the final minute, unique factor will take a huge effort to achieve.