This course was created by Pete Mockaitis of How to Be Awesome at Your Job. We are pleased to offer this training in our library.
Skill Level Beginner
- [Narrator] This is an audio course. No need to watch. Just listen. Welcome to the latest addition to LinkedIn Learning Podcasts. We've curated some of the best business podcasts and made them even easier to listen to. Each episode is split into sections. Use the links in the contents area to skip to whichever section you like. We're always looking for new ways to help you learn, and we appreciate your feedback. Thanks for listening. - [Host] Let's talk about the 80-20 rule now. So you mentioned in one of your videos about your book that others, I don't know, books or speakers or experts haven't quite explained the 80-20 rule properly. Could you offer for us your explanation and tell us, you know, where are the people falling short here? - [Man 1] Well, I think in fact, I think most of the world has gotten it quite wrong. So the 80-20 principle says that 20% of what you do produces 80% of what you get. And the other 80% of what you do only produces 20% of what you get. So it could be how you invest money, how you invest time, how you use people. It could be the volunteers at a church. It could be the production of salespeople in a sales department. It's almost always 80-20, and people have been writing about this for a century, but almost all of them have missed something really important. So first let me just say, this is, a lot of people think that, a lot of people have heard of it, and maybe they've heard the story of the Italian economist, Vilfredo Pareto, who figured out that in all the different countries he studied that 20% of the people had 80% of the wealth. And that's true, but that's only the tip of the iceberg. It's true in sales. It's true in business. It's true if you're advertising, 20% of your advertising money gets you 80% of the responses, and it's true in, like 20% of the carpet in your house gets 80% of the dirt and wear, (host laughs) and 20% of the rooms in your house is where people spend 80% of their time. So it's-- - It's like it's the kitchen. A party, everyone goes to the kitchen. - Yeah, that's right, that's right. And then there's the refrigerator, which is, well so the refrigerator is the 20% of the 20%. So this is the part that almost everybody missed, which is inside every 80-20 is another 80-20, and then there's another one, and then there's another one, and there's another one. So let's say, we're talking, let's say you got a church, and it's got 1,000 members. 80% of the volunteer work gets done by 20% of them, which is 200. Okay, but then we can break it down again. And it's still true that 80% of the 80% is from 20% of the 20%. So what that means is 64% of what gets done gets done by 40 people, which is 20% of 200. But then it's true again, that 80% of the 80% of the 80% gets done by 20% of the 20% of the 20%. Well, that means that half of everything that gets done in a church of 1,000 people gets done by eight people. - [Host] Yeah, that's powerful (laughs). Appreciate those eight people. - Well, it's true. It's also true of the giving. Okay, eight people - Right. - [Man 1] give half the money. It's, so it's true of salespeople. If you hire 10 salespeople, two of them will outproduce the other eight. And you didn't do anything wrong. It's just a law of nature. And so it's the clothes that you wear in your closet, and it's the traffic on the roads in your town, and it's the size of checks that you write, and the size of of charges on your credit card statement, and it's income sources in your, like in your family or in your, you know, let's say you got a bunch of customers, it's true almost everywhere. It's like gravity, and it's probably the most useful generalization about life that I know. It's incredibly powerful. And most people have never heard it explained the way that I am explaining it, and-- - [Host] With those powers or the squaring or cubing effects of it? - Right, right. So, okay, not only is 80-20, but it's also true that 4% comes, produces 64%, and 1% produces 50%. And so there's the, in every career, in every budget, in every organization, there are these tiny little levers, there's these tiny little hinges that swing big, big doors. - [Host] And we're not talking about big doors on tiny houses. You're talking about a full-blown door with a tiny hinge, - Oh yes. - yeah, with you. - Oh yes, oh yes, and so it's government and taxes and healthcare and social problems and politics. It applies to all of it.