In a sad day for most digital products and services, an italian economist, Vilfredo Pareto, observed that 80% of Italy's wealth was owned by 20% of the population. From that economic observation has come a torrent of the most far flung interpretations of a non-existent 80-20 rule. There is no 80-20 rule. There never was and never will be. Yet so many developers, designers, product managers evoke this mythical rule to justify the most outlandish pipe dreams, shoddy work or just plain laziness. Which is a pity because it ruins the credibility of a principle that in 20% of the circumstances can be 80% helpful.
The crux of when the 80/20 principle is helpful is when you need to fend off perfectionists. The the 80/20 principle helps you to illustrate that a minority of factors can result in a majority of effects, the aka 'biggest bang for your buck.' But how can you tell when the principle is being used wisely or not.
80/20 Pipe dreams
Some G-d forsaken Gui Guru once said that 80% of screens could be driven by templates; while only 20% of the screens needed to be designed. This completely unsubstantiated drivel has lead to many efforts to "automatically generate a UI". It has lead to millions of wasted dollars and development effort in worthless tools and idiotic processes all aimed at designing without designers. If the Guru was right then about 80% of the screens could be generated, reasoned the technocrati, you hit the 80/20 rule and you applications will be fine except for 20% of the time. Some more thoughtful product managers then would hire in an army of designers to cover the 20% they thought 'really needed design.' But even then, as one Product manager in just such a project told me, in how own pipedream: "I want you to design templates with such a narrow path of movement that a designer can only make the right choice."
The reality of the matter is more along the lines that 80% of a given screen could be generated while 20% needed to be designed, but oh the devil is in the details and often that 20% is where the most difficult design challenges lay. Therefore, the 20& should end up driving the other 80%, not the other way around. [Never mind the fact that this pipe dream totally negates the necessity and power of the conceptual design (see It's all about the concept).]
80/20 Shoddy work
Often someone will deliver (or even ask for) 80% of the work they really need to get done. This is usually done to purposefully keep the quality low. Example. A software engineer asks the designer for rough documentation that is quick and easy to read, just giving the 20% key interactions and let the 'no brainers' to the engineer himself. This assures the design bar remains low. With it this low shoddy work can triumph the design goals being so low. The design fails to deliver but it was set up to fail and no one even expected it to succeed in the first place. This way the technology can triumph, reason the developer, while the design has a systematic back place.
All to often a designer themselves will end with a rough sketch and miss some of the finer details of the design they need to deliver again claiming to deliver according to the 80/20 rule. Often the excuse is: "No need to over deliver those developers won't design it to spec anyway." Or: "Stuff always comes up during development it will change anyway. I will just give them 80% and give them 20% margin to play with." This is pure laziness. As any good designer will tell you that the devil is in the details. Or as some of the better desigers have pointed out G-d is in the detail; because those small details are often what separates an ordinary design from a truly excellent well thought out design. That last 20% is again, the last thing you want to leave to a developer or other non-designer. Furthermore, those gnarly details you have solved will go a lot further in helping developers improvise when they have to than if you just leave them a blank space to fill in all on their own.
The 80/20 principle works excellently when you need to stop someone going off into the weeds of perfectionism. The software should be bug free. The software should please every user to do everything. The software should have perfect tests. Anything that reeks of perfectionist is liable for the 80/20 rule. For as we all know at one moment, the waters can get murky. e.g. one user's bug is another user's feature. Just make sure whenever some pulls an 80/20 on you, or you pull it on someone, that you have an objective measure to back up your 80/20. Yes, 20 percent of the people own 80% of the wealth. Yes, if we provide 20% of the functionality we will make 80% of the users happy as we can see in these usability tests, etc.