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The Pareto Principle – The easiest way to increase productivity

The Pareto Principle is also known as the 80/20 rule, which states generally that in most events, 80% of the effects come from 20% of the causes.

The principle was named after the Italian Economist Vilfredo Pareto. In 1906 he found that 80% of the land was held by 20% of the population, and that in his garden, 20% of the pea pods held 80% of the peas. From those relatively simple observations he came to develop an entire, well-known economic principle, dealing mostly with wealth distribution.

Since then, this principle has been observed nearly everywhere. Below is an illustration of this principle as it pertains to an individual.

The pareto principle, optimizing your time

Of course, as a life-engineers, the value in this principle is that you can engineer your time to massively increase your production.

By paying close attention, and by diligently measuring your performance (see this post on measurement), you can begin to identify what that magical 20% actually is.

Often, 80% of the results is enough for your purposes, and once you’ve reached that point of diminishing returns (that magical 20%), you shift your focus onto some other magical 20%. By doing this, you’re able to concentrate the whole of your time, only on the most efficient tasks, as illustrated below.

The Pareto Principle

This is particularly valuable if you’re dealing with limited time and resources, either as an individual, a leader, a company, or even a family.

For instance, as a father I try to take each of my kids out on a date, one child a week, rotating through all 6 kids. They love that time together. It’s completely “our” time. Last week I took my 3 year old up into the mountains with a bag of his favorite plastic dinosaurs and we tramped around in the mud, growling and talking in dinosaur voices. He absolutely loved it, and it created a memory. When we got home it became clear that the part he remembered the most, was about the first 20% of our date… walking hand in hand into the mountains, and starting to play dinosaurs. He’s not likely to remember which dinosaur won, or what feable plot we created. But he’ll remember that we went.

Sometimes we make the mistake in thinking that if we don’t have time for the whole “100%”, we just shouldn’t do it, not realizing that almost all of the value is found in that first 20% investment.

In the end, the truth of the matter is that we’re all over-tasked. There’s far more to do than any of us can do. The key, therefore, is in finding that magical 20% in the various projects that matter most, and distributing your time so that you at least invest that. If you do that, you’ll be getting 80% of the value anyway, and you’ll find yourself accomplishing far more.

Rusty

6 replies
  1. Trish
    Trish says:

    Rusty,
    This is a very interesting principle and I’m looking forward to trying out its application in my life. What a great reminder to just “do it”.

    Reply
  2. Rob
    Rob says:

    Thanks for this Rusty. All too often I feel as though I have to compete with the peers within my profession or even religious peers that press us forward. Although I do understand, and agree, that being pressed forward is a good and needful thing, maybe a step back to evaluate where my time is being spent would be of benefit to both me, and my family right now. (Good job straightening out us wayward people!)

    Reply
  3. Nic R
    Nic R says:

    Hey Rusty,
    I have often heard of the Pareto principle (in Economics classes as well as in Time Management books) however i am desperately struggling to find the ‘magic 20%’ in each activity. Is there anything i can do to help me discover the ‘magic 20%’ in an activity so that i can quickly complete it and move on?

    Happy New Year!

    Reply
  4. Rusty Lindquist
    Rusty Lindquist says:

    Hi Nic, you’ve asked the critical question. I have a worksheet I use for coaching that I’ll try to put online in the near future. But in the meantime, if you simply try to focus on the critical elements, the most foundational tasks to the project, you’ll likely nail it.

    Think of if you were trying to build a hotdog stand. What are the critical elements you’d need? Well, the single most critical item would be hot-dogs, then probably buns, then some sort of rolling platform, then ketchup and mustard, then a number of other condiments, then you could start dressing up the cart, wrappers, etc. But realistically, if you just had the first 3 or 4, you’d have all the most critical elements. Adding each of those items adds critical value. But pretty soon the value added per item starts to go down, when the items are no longer “mission critical”.

    What you must do, then, in your projects, is deconstruct them into at least rudimentary tasks (it’s hard to find the critical elements if you don’t do this), and then sort them by priority, putting the most mission critical items first. Then draw a line at the point where suddenly the next item isn’t exactly mission critical.

    That line is where the magic is, and it depends a lot on what you’re trying to do. If I’m trying to build a hot dog stand to compete with other hot-dog stands on some street in New York, then that line is a lot farther down than if I’m simply trying to sell (or provide) food at a local, informal event.

    My worksheet simply presents some questions that helps you determine where that line should go, but I’ll try to put it up here soon.

    Rusty

    Reply

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