Pareto 80 20 Principle:

Pareto 80 20

Pareto 80 20 or the 80/20 Rule is one of the most helpful of all concepts of time and life management. It is also called the “Pareto 80 20 Principle” after its founder, the Italian economist Vilfredo Pareto, who first wrote about it in 1895. Pareto noticed that people in his society seemed to divide naturally into what he called the “vital few”, the top 20 percent in terms of money and influence, and the “trivial many”, at the bottom 80 percent. Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto 80 20 Principle. While it may be misnamed, Pareto 80 20 Principle or Pareto 80 20 Law as it is sometimes called, can be a very effective tool to help you manage effectively.

Where It Came From

After Pareto made his observation and created his formula, many others observed similar phenomena in their own areas of expertise. Quality Management pioneer, Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal principle he called the “vital few and trivial many” and reduced it to writing. In an early work, a lack of precision on Juran’s part made it appear that he was applying Pareto’s observations about economics to a broader body of work. The name Pareto 80 20 Principle stuck, probably because it sounded better than Juran’s Principle.

As a result, Dr. Juran’s observation of the “vital few and trivial many”, the principle that 20 percent of something always are responsible for 80 percent of the results, became known as Pareto 80 20 Principle or the 80/20 Rule.

He later discovered that virtually all economic activity was subject to this principle as well. For example, Pareto 80 20 principle says that 20 percent of your activities will account for 80 percent of your results, 20 percent of your customers will account for 80 percent of your sales, 20 percent of your products or services will account for 80 percent of your profits, 20 percent of your tasks will account for 80 percent of the value of what you do, and so on. This means that if you have a list of ten items to do, two of those items will turn out to be worth five or ten times or more than the other eight items put together.

You can apply the Pareto 80 20 rule to almost anything, from the science of management to the physical world.

You know 20 percent of your stock takes up 80 percent of your warehouse space and that 80 percent of your stock comes from 20 percent of your suppliers. Also 80 percent of your sales will come from 20percent of your sales staff. 20 percent of your staff will cause 80 percent of your problems, but another 20 percent of your staff will provide 80 percent of your production. It works both ways.  When marketing on social media platforms, always keep in mind the Pareto 80 20 rule. You should spend 80% of your time sharing, answering questions and interacting with others and only 20% of your time promoting your small business. Stick to this rule and you’ll be seen as a true participant, not a pushy sales-person.

I am sure by now you are getting the Pareto 80 20 principle.

Number of Tasks versus Importance of Tasks

Here is an interesting discovery. Each of the ten tasks may take the same amount of time to accomplish. But one or two of those tasks will contribute five or ten times the value of any of the others.

Often, one item on a list of ten tasks that you have to do can be worth more than all the other nine items put together. This task is invariably the frog that you should eat first.

Focus on Activities, Not Accomplishments

The most valuable tasks you can do each day are often the hardest and most complex. But the payoff and rewards for completing these tasks efficiently can be tremendous. For this reason, you must adamantly refuse to work on tasks in the bottom 80 percent while you still have tasks in the top 20 percent left to be done, according to Pareto 80 20 principle.

Before you begin work, always ask yourself, “Is this task in the top 20 percent of my activities or in the bottom 80 percent?”

The hardest part of any important task is getting started on it in the first place. Once you actually begin work on a valuable task, you will be naturally motivated to continue. A part of your mind loves to be busy working on significant tasks that can really make a difference. Your job is to feed this part of your mind continually.

Motivate Yourself

Just thinking about starting and finishing an important task motivates you and helps you to overcome procrastination. Time management is really life management, personal management. It is really taking control of the sequence of events. Time management is having control over what you do next. And you are always free to choose the task that you will do next. Your ability to choose between the important and the unimportant is the key determinant of your success in life and work.

Effective, productive people discipline themselves to start on their most important task at hand. They force themselves to eat that frog, whatever it is. As a result, they accomplish vastly more than the average person and are much happier as a result. This should be your way of working as well. This is an example of putting Pareto 80 20 principle to work!

I have just listed a few examples of Pareto 80 20 rule and hope it helps you in your business or job/career. But there is more to learn about it, only if you really want to master it and apply into your life towards your unique situation.

Pareto 80 20


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