What Is the 80/20 Rule? How the Pareto Principle Will Supercharge Your Productivity

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If you’re sitting at your desk looking at your to-do list and have no idea where to start, you need to apply the Pareto principle, also known as the 80/20 rule.

The Pareto principle, or the 80/20 rule, is a common principle used in various industries and businesses to help determine the highest priority tasks that have the most impact. Once you’ve identified the high-impact tasks, you’re guaranteed to increase your productivity and profits.

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In the early 1900s, Vilfredo Pareto recognized this fact when he studied the distribution of wealth in Italy. Pareto observed that 80% of the land in Italy was owned by only 20% of the population. Pareto also noticed this same 80/20 in other things, such as the productivity of the pea plants in his garden.

It is important to understand that the 80/20 rule is not a mathematical formula. Instead, it is an observation that explains the correlation between effort and result. If only 20% of your task list is considered high priority, and those high priority tasks are the highest performing, why not spend your time and effort on them?

Examples of the Pareto principle

In business, for example, this means that 80% of your profits come from 20% of your sales. Therefore, it would help if you focus your energy on those customers who represent 20% of your highest sales.

If you’re a marketer, you may have noticed that 20% of your marketing messages account for 80% of your campaign results. Or, if you’re working on a major marketing project, you might find that 20% of your initial efforts are responsible for 80% of the bottom line.

If you are a financial advisor, you may have noticed that 80% of your business profits come from 20% of your clients. It might be better to work to maintain the relationship with these particular customers.

However, the Pareto principle does not only apply to general outcome observations.

Instead, the 80/20 rule can be applied to almost every part of your workday to help maximize efforts and productivity.

The 80/20 Rule: 20% of your efforts lead to 80% of your results.

How to use the 80/20 rule to your advantage

According to the 80/20 rule, 20% of your efforts produce 80% of your results.

If you think about the Pareto Principle in terms of productivity, it doesn’t necessarily mean that you only have to work 20% of the time or go to the office one day a week.

It is essential to note that the Pareto principle does not suggest that you work less.

Instead, when you apply the 80/20 rule to your workday, the Pareto Principle can help you identify the tasks you need to focus on to maximize your time and results.

In other words: work harder on the tasks that matter most and don’t sweat the small stuff.

How to apply the 80/20 rule to maximize productivity

If you’re in charge of a team or overseeing a project, using the Pareto Principle can help you identify high-priority tasks for your team. The 80/20 rule assumes that even if your team spends the same amount of time on each task on the to-do list, only two of those tasks will drive the majority of the project’s results.

Therefore, to apply the Pareto principle, you will need to make a list of all the tasks that need to be done to complete the project. Be sure to include everything in this to-do list. After making a list, consider which tasks will have the most significant impact on the project to get the best results. Some tasks may seem small, but sometimes the smallest tasks have the most significant effect.

Delegate these high-impact tasks to your team and worry about the other tasks later.

You can apply the same concept to your own to-do list. Identify which tasks will yield the most results and focus your efforts on them.

How to apply the Pareto principle to make business decisions

The 80/20 rule can also help you make tough business decisions. Maybe you have a list of projects for several different clients, but you’re short on time. If the 80/20 rule holds true, you’ll want to focus your time and efforts on pleasing and developing strong relationships with the 20% of your customers that give you the most results (read: profits).

This doesn’t mean you have to be unprofessional and disrespectful to your other customers. But if you’re feeling overwhelmed or tight on time, it can be helpful to recognize where you get most of your results and focus your time and effort on those clients.

The Pareto Principle can also help you think through business problems and potential solutions. To apply the Pareto principle to help you solve your problem, think of all possible solutions and work backwards. You want to work on the two best solutions that solve your problem.

Avoid the pitfalls of the Pareto principle

Like all principles, the Pareto principle has some drawbacks.

It is important to remember that the 80/20 rule is not about reducing workload. Instead, the Pareto Principle helps you identify the most critical and high-impact tasks on your to-do list. Don’t neglect small tasks, unimportant tasks, though. Eventually, these small tasks will become important if you let them sit for too long.

The 80/20 rule can help you identify which of your employees produce the most work if you’re managing a team. Looking at the 20% of employees who complete 80% of the work doesn’t necessarily mean you should fire everyone else. Instead, use findings from the Pareto rule to fairly delegate tasks to your team.

Encourage your team to collaborate on high-priority tasks. Or assign different jobs to different people and check in with everyone to make sure they feel accountable for their part of the equation. Your employees will be encouraged to work harder if they know they are contributing to the biggest part of the rewards, not just the minor details.

Understanding the Pareto principle

Remember that the 20% and 80% numbers are not exact statistics, just estimates and observations. The point of the 80/20 rule is not the numbers. The thing is, not everything in business is created equal. There are some things that are weighted with a much greater reward compared to other things.

Spend your time working on tasks or working with clients that will yield the best results. Applying the Pareto Principle to your business increases your profits while reducing wasted time and effort.

Editor’s note: This post was originally published on [Month Year] and has been updated for completeness.

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