The Pareto Principle (80-20 rule)

Vilfredo Pareto, an Italian economist realized that 80% of his country’s wealth was held by 20% of the Italian population. It didn’t take long for him to understand that this was true, not only for Italy but also for the rest of the world. On top of that, it was not only true regarding the distribution of wealth but it was valid in a much wider context. All that, led to the Pareto principle.

Let’s see this principle under the prism of personal development. We can say that 20% of our effort is responsible for about 80% of the desired outcome. The rest 80%, accounts only for the 20% of the outcome. The more we apply this principle in our everyday life, the more we realize that it is an invaluable tool for clarity and self-awareness. After all, it helps us distinguish between the vital few and the trivial many. In other words, between the  few important and the many unimportant.

Some examples of the Pareto Principle

• 20% of our clients bring 80% of our revenues
• 20% of advertisement accounts for 80% of sales
• We wear 20% of our clothes in the 80% of the time
• From 20% of our friends we get 80% of support and satisfaction
• In 20% of our home we spend 80% of our time
• 20% of emails contain 80% of the important information
• 20% of a meal contributes to the 80% of calories we take
• Also the 20% of a dinner gives us the 80% of enjoyment (those eating their dinner indifferently, while eagerly waiting for the desert to arrive, are probably resonating with this example)
• A 20% of illnesses is responsible for the 80% of deaths in the world
• 20% of our experiences provides the 80% of our satisfaction
• The 20% of a book contains 80% of most important knowledge and also 20% of the books we have read, contribute to 80% of our present education
• 20% of the code running on a computer takes 80% of the CPU time

Of course, the ratio 20-80 is only approximate, it could be 30-70, 10-90 or anything similar. However the principle is valid in many different occasions. You can surely come up with your own examples from your personal experience.

What matters most, is the exact composition of the 20% and 80%. In other words, what falls under the 20% and what falls under the 80%.

Examples

• Which part is the 20% of your Garde robe that you use 80% of the time?
• From which 20% of your activities 20% you receive the 80% of your satisfaction?
• In what do you spend 80% of your money which only contributes a 20% to your happiness?
• Which 20% of your work brings the 80% of your results?
• What 80% of the time you spend on the phone is not important?
• Which 80% of your luggage contents is really necessary?

Pareto’s principle can be applied again and again in an iterative manner. After we have decluttered our wardrobe by throwing away or giving out the 1/5^th of our clothes which we rarely use, we can then apply the same principle again achieving an even finer result. The same can happen with our clients, our diet, our appointments and generally the management of all our critical resources.

The Pareto Principle in time management

Applying Pareto’s principle in everyday life can free up a lot of time, which was – until recently – spent in not important activities. For each activity filling up your day, ask yourself how useful it is. Then, use Pareto analysis in order to identify whether they belong in the important 20% or in the unimportant 80%.

Do more by doing less!

Finally, think how much time and energy you would free up after you stopped worrying about the last 20% (the least important), i.e. all those activities which return almost zero results. By doing less you end up doing much more! The trick is knowing which part to get rid of.

See also our article “Eisenhower’s Matrix: An essential time management tool“