The 80/20 rule or the Pareto principle

How to manage life and time

The 80/20 rule is one of the most useful concepts for managing life and time. Also known as the Pareto Principle. This rule, in short, states that 20 percent of activities will account for 80 percent of results. But let’s see it in more detail.

What is the 80/20 rule?

This rule takes its name from its founder, the Italian economist Vilfredo Pareto, who already in 1895 noticed that people in society seemed to divide naturally in what he called the “few viable”, that is the 20 percent who held money and influence, and the “very mundane”, the remaining 80 percent. Later, he realized that practically all economic activities were subject to this principle, as 80% of Italy’s wealth in that period was controlled by 20% of the population.

Pareto’s 80/20 rule can be applied to any situation.

How to apply the Pareto Principle?

Pareto’s principle is a concept that suggests that two out of ten items in any to-do list will be worth more than the other eight items put together. The downside is that most people procrastinate and commit themselves to the least important 80 percent who contribute very little to their success.

Here is what you should do to effectively apply the 80/20 rule for setting goals that will increase your overall productivity:

• First, take a piece of paper and write down ten goals.
• Ask yourself, “If only today I am able to achieve one of the goals on the list, what would have the greatest positive impact on my life?”
• Then choose the second most important goal.
• At the end of this exercise, you will have determined the most important 20% of your goals and these will be the ones you should focus your efforts on.

Before you start working, in general, always ask yourself, “Does this task fit into the 20 percent of my activities?”

Are you an executive?

You will surely face the constant challenge of limited resources. It’s not just your time that you need to maximize, but the whole team. Instead of trying to do the impossible, applying the Pareto Principle allows you to truly understand which projects are most important, which goals are the most interesting for the organization and which specific tasks you need to concentrate on in order to align with these objectives.

Are you a freelancer?

It is important to identify the best customers – and those who pay the most. Of course this doesn’t mean putting all the eggs in the same basket, but too much diversification will quickly lead to burnout. So focus on the customers who represent the biggest revenue and strengthen those long-term relationships.

Are you an entrepreneur?

The temptation to try something new and exciting is always present. There is nothing wrong with that, but it all depends on your goals: are you trying to grow your current business or do you really want to expand into other markets? In this case, an 80/20 mentality helps you to stay focused on your strategic plan.

So which 20 percent of your work drives 80 percent of your results?