The 80 20 Rule - The Pareto Principle

What exactly is the Pareto Principle (The 80 20 Rule), How it Works, and How it Can Help You

We work under the impression that the more time we spend working, the more results we'll get. This attitude is drilled into us from our school days, where attending lessons and completing hours of homework resulted in good exam results. It's the same mentality as practice makes perfect.

But spending hours and hours working may not be the best way to achieve success. Sacrificing time, the most precious resource that we have, with extended hours of inefficient work is, quite simply, a waste of time. After all, there are only so many hours in a day.

The amount of time you spend working is not as significant as the quality of the work. You need to work smarter, not harder. You want results as efficiently as possible, so you don't waste time and energy. What you need is the 80-20 rule—or The Pareto Principle

I can help apply the principle behind the Pareto Principle to help you work smarter, not harder. It's the perfect way to find the perfect work-life balance without jeopardising your business or career prospects. Find out how by booking an initial, completely free discovery meeting with me – a highly experienced life coach in London.

But if you want to learn more about the Pareto principle, keep reading.

What Is the Pareto Principle?

The 80-20 rule is otherwise known as The Pareto Principle. It dates back hundreds of years and is named after Vilfredo (Federico Damaso) Pareto, who was an Italian polymath and a pioneer in the field of econometrics who coined the term in the 1800s. It effectively states that, for example, 80% of your time will be spent on trivial tasks, which will only contribute to 20% of your success. However, 20% of your time will be spent on vital tasks, which will give you 80% of your success.

What does that actually mean for you?

The Pareto Principle States That Life Just Isn't Fair!

The work you put in is directly linked to the results you get out, right? Wrong. That would be the case if we lived in a fair world, but we don't. The Pareto Principle serves those who fully understand it.

Let's go back to our school days. You've got a test the next morning, but you know there's no time to learn 100% of the curriculum. So, you need to choose what to study. Focus on what is important and going to get results. Not everything will come up on the test, so you need to decide to focus on the things that are likely to come up.

If you focus on major topics, you're likely to learn 80% of what you need to know. The rest of the time, studying the minor details might get you some extra points, but it's only 20% of what you need.

Essentially - the majority of the results come from a minority of actions. You just have to know which activities are vital and which are trivial.

The Pareto Principle means you could study less than a fellow student but actually achieve a better result – even if you both share the same level of intelligence.

Of course, the Pareto rule can be applied to virtually anything in your life: work, hobbies, and even your social circles. The minority course of necessary actions will give you the majority of the results. The trick is to find that 20%.

Where Does The Pareto Principle Come From?

The Pareto Principle is applied in Pareto Analysis – the process that identifies the disproportionate improvement in input, focus, or effort required to generate exponentially greater outputs (results).

The rule was first used by Italian economist Vilfredo Pareto to examine wealth distribution in 1906. Pareto observed that 20% of the pea plants in his yard were delivering 80% of the peas. He then applied his theory to macroeconomics. Pareto noticed that, quite incredibly, the same 80 to 20 ratio applied to the Italian population. He knew the unequal distribution of wealth was a major issue, and he showed that 80% of the wealth in Italy was controlled by just 20% of its population.

Around 30 years later, a leading expert in operations management discovered that 80% of the defects in his production facility were caused by 20% of the issues with his production line. This heralded a new approach to quality control in which Dr. Joseph Juran significantly increased overall production quality by focusing on improving the 20% of his operation that was causing 80% of the issues.

This was a triumph in time management. Juran demonstrated that he could deliver fast results by concentrating his time and efforts on the most important tasks – while leaving the less important tasks for another time.

The Difference Between Success and Failure

While The Pareto Principle can help you focus on finding the important things and ignoring the irrelevant extras, it also tells you that 80% of the work will only get you 20% of the way. This can be disheartening. However, what's more painful is working for hours and hours expecting results only to find out you've been doing trivial tasks. The Pareto Principle should guide you to understand how to use your time more efficiently.

Often the difference between success and failure is not how hard you work; it's the type of work you're doing. If you're putting all your energy and time into the 80%, no matter how hard you work, you'll only get 20% of the way.

Successful people thrive because they understand how to apply themselves and where to spend time and energy. Successful people don't waste time. They continuously look for ways to improve efficiency and productivity and avoid wasting time on trivial matters. This yields real results.

Working long hours is unnecessarily strenuous and can result in lower productivity. When you are tired, stressed, and overworked, you'll end up feeling drained and unable to perform to your full potential. The Pareto Principle can teach you how to avoid this by achieving your goals and preventing you from wasting time on things that won't help you in the long run.

The Pareto Principle Helps People to Deliver 80% of the Results by Addressing 20% of the Contributing Factors

A small percentage of causes have an amplifying effect on the outcomes. That's the principle that helps people generate significantly better results without spending any more time at work.

The Pareto Principle can help individuals and businesses in various industries in a number of ways – although the expertise of a career coach can ensure you reap ALL the potential rewards.

Quality Control

Using the 80 to 20 rule can help you identify which issues within a production environment are having a disproportionately adverse effect on quality. By focusing your attention on them, you can disproportionately improve the final outcome.

Decision-Making

Once you understand the concept of the Pareto Principle, you can use it to make decisions on multiple issues in your professional sphere. For example, if you run a restaurant that receives 200 complaints a year, it's a good idea to get to the bottom of the situation.

After taking a look at the nature of all the complaints, you realise that 80% of them were related to the temperature of the food. So, you wipe out 160 complaints for the year ahead by investing in new food warming lights and implementing food temperature probing as part of the cooking process.

Productivity

You can use the Pareto Principle to create a more effective to-do list that delivers significantly better results with the same amount of effort. This means you can get ahead at work or grow your business without adversely affecting your personal life or relationships.

Write a list of all your outstanding tasks. Now, select the top 20% that will deliver the best returns/results. Make these tasks your priority, and either delegate the other tasks or schedule them for another time.

Which actions will have the most impact? Which tasks are blocking others? Instead of thinking in terms of how long a task has been waiting or arbitrary deadlines, think – and take action – in terms of the calculable value involved.

Of course, this isn't easy for a lot of people, which is why they turn to time management coaching for help.

Understanding the Pareto Principle and How It Can Change Your Life

Ask yourself - what is your most valuable task? Is it in the top 20% or the bottom 80%? If it's in the bottom 80%, assign it less time, less energy, and less stress.

It's a simple principle, and the most successful individuals still use it. 20% of clients, bringing in 80% of the revenue. 20% of a book gives you 80% of the content you need. Even in your social circle, it's the 20% of your close friends who will provide you with the 80% sense of fulfilment you're looking for.

The point of The Pareto Principle is that it recognises just how important time is for us. It's the one resource we can't buy, extend, or gain an advantage over. At the end of the day, you'll go through the very same 24 hours that anyone else did. What's important is how you spend your 24 hours. Time is a limited resource. Don't waste it.

Work smarter, not harder.

Are You Ready to Work Smarter?

This is the principle that could change your life, but you have to know how to implement it in a practical sense in order to reap the rewards. That's where the services of a time management coach could prove invaluable. I use The Pareto Principle every day in my own business dealings. As a result, I'm more successful than ever before – and I'm able to strike the perfect balance between personal fulfilment and professional achievement.

Focus, prioritise, and achieve your goals - efficiently. Want to learn how? Contact me today for an introductory life and career coaching session. I'll assess your goals, strengths, weaknesses, and challenges before creating a programme designed to help you embrace The Pareto Principle in your quest for success and fulfilment!

People Also Ask: The Pareto Principle FAQs

What Are the Benefits of The Pareto Principle?

Once you utilise the key tools related to The Pareto Principle and time management – possibly with the help of a business coach – you can deliver the maximum impact with the least amount of work. Imagine that. Using the 80 20 principle, you can significantly increase your performance metrics in your professional life while actually making more time for friends, family, and doing the things in life you love.

Does the Pareto Principle always deliver the same 80 to 20 ratio?

No, while the principle works in the same way, there are many outcomes. In some cases, you might find that just 10% of the input delivers 90% of the results. Similarly, you might discover that 30% of the input delivers 70% of the outcome. The most important thing to remember is that you can maximize your returns by choosing to focus on the most valuable tasks.

Can I use the 80/20 principle to maximize my time management skills?

Absolutely! Of course, you might need the help of a business coach to develop the approaches required, but this tried-and-tested principle can help you determine what should be a priority and what can wait. By prioritising tasks in this way, you can make everything you do generate more significant results. Ultimately, you learn how to work smarter instead of harder.

I work in sales and marketing. Can The Pareto Principle improve my productivity levels?

Yes, understanding the Pareto Principle is the key to improving your sales and marketing results. There's a very good chance that 80% of your company's sales are coming from just 20% of your customers.

By identifying your top customers, you can ensure your initial efforts to increase sales have maximum impact. For example, if you notice that most of your customers live in the UK, you can focus your marketing efforts and budget appealing to the British market – and leave other countries until later in the process.

The same concept applies to e-commerce. Imagine you own an online store selling bicycles. You need to significantly increase your overall sales over the next three months or you run the risk of missing your sales projections. Where do you start?

Well, you should start by analysing your sales by category reports. Which categories account for the top 80% of your sales? Now, imagine that your reports determine that 80% of your sales are from the sale of mountain bikes. For maximum results in the shortest time possible, you decide to invest in SEO and PPC advertising for your top-selling mountain bikes.

I'm a student struggling to cope with my workload. Can the 80 20 idea work for me?

Yes. In fact, more and more students are turning to life and confidence coaches for help with managing their schedules, study priorities and overall approach to learning.

In this instance, it's safe to assume that 80% of your learning will come from 20% of your studies. Or, if you're planning for exams, 80% of your scores will come from 20% of your studies. All you have to do is work out – perhaps with the help of a tutor – what your study priorities should be.

What are the most important concepts in your field of study? Ask your tutor for papers from previous exam years. Where was the emphasis? Which areas appeared most often? You may not necessarily be able to work out where you can have the most impact in terms of your study hours, but you should be able to create a rough plan of action.

Can the Pareto Principle Improve the Health of My Relationships?

Yes, you can apply the rule to just about any aspect of your life – although the results may not be distributed evenly. For example, it's probably best to separate your professional relationships from your personal ones.

Think about what each and every business relationship delivers for your future and your pursuit of your ultimate vision in life. Try giving the value of each relationship a score out of 10, then order the relationships in terms of their importance. The top 20% of relationships are the ones you should prioritise if you're being pulled in many directions to the point of breaking.

You can't and won't please everyone, so there's no point in trying. While it might sound a little selfish, focus your efforts on nurturing the professional relationships that will do the most for your future.

Can I use the 80 20 rule to invest?

Absolutely! There really are very few areas in life that can't be improved in some way by applying this universally accepted principle of prioritising tasks.

For example, with the help of a professional investment advisor, work out which stocks have accounted for 80% of the total returns delivered by the S&P 500. The chances are, close to 20% of the stocks are responsible, and these might be the best stocks to invest in. Of course, other variables are at play, but the principle remains the same.

Alternatively, you might decide to split your investment portfolio into 80% of safer, steadier stocks and 20% of higher-risk, higher-return stocks.