Business News

Neglect the 80/20 rule: that is the way you create your individual success ratio

November
12, 2020

7 min read

The opinions expressed by the entrepreneur's contributors are their own.

The Pareto Principle, often referred to as the "80/20 Rule", is a fundamental principle of productivity because it applies in a thousand different ways in our personal life, work life, and everything in between.

Before we delve into this centuries-old concept, however, I want to ask you: do you consider yourself a thinker or a doer? Stick to that answer, we'll come back to it in a moment.

The Pareto principle is a trending topic, but was discovered by the Italian economist Vilfredo Pareto at the end of the 18th century. Pareto discovered that 80 percent of Italy's national prosperity can be traced back to 20 percent of its population. In other words, the wealth was not evenly distributed but concentrated in a highly predictable manner. That really is the heart of the principle – the idea that most things in life are not evenly distributed.

The Pareto Principle model was later revived in the 1950s by Joseph Moses Juran, who was viewed by many as the father of the quality movement. What he discovered is that this principle can be applied to a wide variety of areas in business and life.

Essentially, the Pareto Principle proves that small, focused workspaces get most of your results. In other words, not all things are created equal and should not be treated as the same. When we focus on fewer projects, tasks, or activities referred to as the "vital few", we maximize our impact. If we prioritize our time by focusing on the few that are important, we can become more effective with our work, which is why understanding it is such an important concept.

Related: How I built my business so my husband could quit his job

Some common misconceptions

When applied correctly, the Pareto Principle gives us a clearer picture of where to focus our time and energy. After all, these are the few items on your list that move the needle the most. Unfortunately, there is some misunderstanding about this principle. And by some I mean a lot. There are many so-called experts who use the Pareto principle as a catchphrase in their teachings, but they do not apply it adequately.

To really dive into this concept, the first thing we need to remember is that productivity is not one size fits all. I mean, let's face it, your life isn't one size for everyone. Let's get off the train we believe we should and instead make the strategies we read about really work for us as individuals.

Misunderstanding # 1: "I have to follow the 80/20 percent breakdown exactly."

Since it's often referred to as the 80/20 rule, people can fixate on these percentages. However, Pareto's principle is not about those hard and fast numbers. Rather, consider the numbers 80 and 20 as symbolic representations of the “unequal balance” we are discussing. The fact that they happen to add up to 100 is just a fluke.

Their input and output ratios can look different. Maybe you're an 80/10 person where 80 percent of your results come from 10 percent of your activity. Or maybe that ratio is 90/15 instead. Don't let the numbers 80 and 20 catch you. A much better way to see this in your daily work and life is this: The small, focused work pockets will produce the majority of my results.

Related: 4 Ways To Turn Uncertainty Into Strength For Your Business

Misconception # 2: "My focus should be entirely on the" vital few "and I should forget about the" trivial many "if I want to be truly productive."

Oh how I wish we could be true But to do so – to focus only on the "vital few" and leave the "trivial many" in our rearview mirror – would lead to complete disaster. Just because something doesn't bring us a direct ROI doesn't mean we don't have to pay attention to it. As much as we like, we can't pretend these "trivial many" tasks, like paying bills or filing documents, don't exist.

These tasks are things that we don't necessarily enjoy doing, and we might even consider them to be time-wasters on a large scale of things. But here's the thing – and that's why I put the bills in that category – these are things we still have to do, like it or not. In fact, the Pareto Principle is ineffective when people assume they need to focus solely on the few important tasks. If we did that, we would get lost in a cycle of continual catching up, which is the opposite of what we want.

Related: 3 Questions To Ask If You Want Women Entrepreneurs To Speed ​​Up

Create a Pareto Principle Model That Works for You

Now that we know the most common misconceptions, I'd like to help you design your own Success Ratio based on how productivity looks and feels to you.

Let's go back to the question I asked at the beginning of this article: Do you consider yourself a thinker or a doer? Regardless of how you answered, I want you to delve into the following questions: How much of the thinking you do is really effective? How much of the decision making you make is really affecting your business? If you spend your time thinking about the wrong things, or if you spend most of your time moving from one task to the next, is any of this really effective? The key that we miss when looking at Pareto's principle is that the rule is meaningless unless we find ways to apply it effectively to ourselves.

Warren Buffet is widely regarded as a genius when it comes to Pareto's principle. Buffet is known to spend 80 to 90 percent of his day studying. This means that the man we all know as a reputable investor spends little time actually investing and most of his time studying. You can take this model and do it with it, but this ratio may not work for you. Success doesn't mean trying to fit yourself neatly into a box made for someone else. You are not constrained by defining someone else's success. The only definition that matters is the one you create for yourself based on the life you lead and the life you want.

We don't want to get so involved in that 80/20 ratio that we lose sight of what we really want. I want you to do the following. I want you to sit down and I want you to think about what your winning ratio really looks like. Forget about typing; Forgot issue. Come up with a relationship that shows how effective you can be. Are you actually a 20/80 person? Do you spend 20 percent of your time thinking and 80 percent sticking to your decisions? Are you a 10/90? Are you a 15/85 or something else?

What you need to consider here are your own top priorities and how effectively you are trying to persevere, cultivate, and actually take action. If you think effectively, you will be effective in your execution, and vice versa. And this is exactly where real productivity takes place.

If I can leave you a message, it is this: let's not blindly apply productivity principles because we think we should. Let's take a step back and see the bigger picture of how they work for each of us as individuals.

Related topics: Applying the Pareto Principle can improve your time management

Related Articles