Time won’t wait for anyone. And these days, time seems to be in a hurry. So, what can we do about that?
The best thing any of us can do is to use our time efficiently and effectively. This is where the Pareto Principle, better known as the 80/20 rule, takes the stage. It points out the obvious fact that most things in life are not evenly distributed. We already mentioned it in our blog about Dreamling.
So how, why, when and by whom was the 80/20 form created?
It was 1906 when famous Italian economist Vilfred Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. He was inspired by the fact that only 20 percent of the people owned 80 percent of the nation’s wealth! Little did he know that this theory will create an avalanche that never stopped! Pareto was at the University of Lausanne in 1896 when he took the time and effort to explore the idea of 80/20 connection further. His first published work on the subject was “Cours d’économie politique”.
Pareto’s rule was found to be applicable (and with the uncanny accuracy, mind you) to many situations and very helpful in many disciplines, including the study of what concerns all of us – business productivity.
To make it so universal and generally suitable, Pareto’s rule may be simplified to state that for many events, roughly 80% of the effects come from 20% of the causes.
His rule was further developed in the late 1940s, by the management consultant Joseph M. Juran, who actually named the theory after Pareto. Juran was some kind of a product guru of his time and he applied the 80/20 rule to quality studies.
We bet you are thinking: Ok, but what does it mean?
Well, it actually means that 20 percent of the defects cause 80 percent of the problems in most products. Coming from there, Juran developed further what will become known as Pareto’s diagram, a chart based on the principle of separating the vital few from the trivial many – 20/80.
Mathematically, the 80/20 rule could be followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters. Many natural phenomena have been shown empirically to exhibit such a distribution. And some not-so-natural ones.
- 80 percent of a company’s revenues are generated by 20 percent of its customers
- 80 percent of complaints come from 20 percent of customers
- 80 percent of quality issues impact 20 percent of a company’s products
On the other hand:
- 20 percent of investors provide 80 percent of funding
- 20 percent of employees use 80 percent of all sick days
- 20 percent of a blog’s posts generate 80 percent of its traffic
When it comes to project management, it is known today that 20% of the work consumes 80% of time and resources. And, that 20 % is made of the first 10 percent and the last 10 percent of the project! Now, knowing that it was easy to conclude that most people procrastinate on the top 10 or 20 percent of items that are the most important (above mentioned the vital few) and make themselves busy with the least important 80 percent (the trivial many).
Is it necessary to point out how little the last ones contribute to the general success? Once you have an aim, your actions must be efficient.
Lincoln once said:
“Give me six hours to chop down a tree and I will spend the first four hours sharpening the ax.”
Let’s see how can we put the 80/20 rule in action and profit from it.
In order to enhance your productivity, follow some (if not all) of these rules, advice, suggestions…
- Make a TO/DO list and take a close, long look at it. Cross off all the small issues. Just do it. Cross off anything that is not generally crucial or important at the moment given. Focus on those tasks that survived this elimination process. By focusing on the more important items, you will generate the most significant results.
- Focus on the 20 percent of your customers that make up the bulk of your revenues. Take some time and invest it in identifying similar customers. Get them even closer to your product or a service.
- Analyze possible risks. Single out the 20% of them that pose the highest potential for damage. Do something about it. Start monitoring and planning activities on them. We must underline here – do not ignore the rest of the risks. Just pay more attention to the ones that are more likely to happen.
- When evaluating the progress of your goals – linger on to those few that are most important for your development or success.
Actually, you know what? It’s pretty absurd to try to list all the things you might do and accomplish thanks to Pareto principle. It’s easier and more practical to give you one and only advice:
Apply the 80/20 rule to absolutely everything. Especially to the issues and tasks related to the time and life management! This 80/20 concept is one of the most helpful ones as it assists you with spending your time in the most valuable of activities, all while eliminating anything less effective that won’t be taking you closer to your goal (proportionally linked to the time and energy consumption).
Start looking at the world through the 80/20 pattern and you will see how everything is measurable and thus – simple to organize and plan. And right there lies the secret of success.