Overview
We can learn a lot from the Pareto principle, also known as the 80/20 rule. You’ve likely heard of it. It’s not a precise mathematical equation, but more of a statistical phenomenon that applies in so many scenarios. At its premise, it means that 20% of the effort produces 80% of the results. It’s valuable to keep this in mind as you set priorities, build strategic plans, and determine the required resources.
In this article, we’ll discuss several examples of where it often applies, and how we can leverage it to get more results with less effort.
Examples
How to apply it
Now that you’ve seen several examples of where the Pareto principle applies, it’s easier to watch for it as you go about your day. But then what? What can you do with this knowledge? Here are 8 thoughts:
1. Identify the drivers of that produce the most results
Which products sell the best? Which people cause the most sales? Which marketing channels lead to the most prospective customers? One you know the drivers to success, double-down on them! Allocate resources to help those success areas grow!
2. Focus your efforts on the actions that produce your intended results
In what ways do you spend your time that lead to achieving your goals? Sometimes it’s not what you think. For example, allocate 10% of your time to just think and strategize. If that leads to more results, consider increasing it!
3. Delegate, defer, or delete other tasks
One of the biggest tenants of the Pareto principle is to focus most of your energy where you can add the most value. That means minimizing your plate of everything else. Those other tasks can be delegated (or outsourced), deferred to later when you have more bandwidth, or in many cases deleted altogether when they aren’t really even needed.
4. Establish an accountability culture
Focusing on and measuring results is a major part of having a strong accountability culture. Collaborate on the tasks that work and produce the results you desire. Share what works with others on your team and in your organization.
5. Focus reviews and troubleshooting where the most errors occur
Focusing on quality can be a major differentiator. Generally the majority of errors tend to come from just a few areas. Add extra review steps to those items that produce errors. Identify the root cause of errors and rectify it the best that you can!
6. Market more to higher-income customers and clients
Knowing which customers and clients are worth selling to is a critical part of the marketing function. You’ll often find that some customers aren’t profitable at all by themselves, but worse – they are taking potential positive energy away from better customers. The more expensive your products and services are, the more important it is to track effort and profitability by customer to ensure you’re focusing that effort on the right customers.
7. Learn more about your toolset
I’ve worked with so many people that barely know anything about the tools they use ALL DAY LONG! At best, they know what they’ve been taught from others, but more than likely, they learned some way to get things done and stuck with it (whether or not it was efficient!). There’s often a better way, and all it usually takes is a little learning. Ask colleagues. Read the manual. Search the internet. Take a class. Earn a certification. Attend a conference. Just learning a few new things can make a huge difference!
8. Automate work that drains your energy
You can likely automate a lot of the work you do each day so you can focus on more creative or collaborative tasks. That’s been a huge focus of my career and allowed me to provide a lot of value. It frees up energy to work on strategic projects. That’s a great way to expand that 80% wedge of the pie!
Summary
As you can see from the examples above, the Pareto principle applies in many aspects of life. This doesn’t mean we should ignore the 80% that only produces 20% of the results (after all, there are often many indirect relationships at play). It means we should be aware what inputs or factors produce the most results and focus our attention, energy, time, and money on them most, while figuring out how to enhance the 80% of the inputs/drivers such that they can more proportionally produce results (if it’s possible). It’s not just a one-time exercise to evaluate effort and results. It should be a continuous process, because things can change in a hurry. Being prepared can help you get the most return on your investments.
How have you observed this phenomenon playing out in your life? How did it change the way you view effort and results? Share your thoughts in the comments below!
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