20 80 Rule and How to Apply the Pareto Principle

20 80 Rule and How to Apply the Pareto Principle

20 80 rule Pareto Principle Are you getting the most out of your efforts?

E-mail. Voice mail. Meetings. Paperwork. Direct reports and colleagues who continually ask for help or bring you their problems. How can you be accessible and responsible – yet actually get work done and accomplish your highest-priority goals at the same time?

A common tactic is the the squeeze-it-in philosophy: You cram in everything you possibly can — and then some. This often leads to burnout and a reduction in the quality of work. However, there is a simple but overwhelmingly effective alternative – it’s called the Pareto Principle.

It all started in the 1906 when an Italian economist Vilfredo Pareto found that 20% of citizens held most of the wealth — about 80 percent, he calculated. That, of course, meant that the other 80% of the population held only 20% of the wealth in the country. As he expanded his research Pareto found that this was reflected in many other countries.

The Pareto Principle can be applied to business and personal effectiveness. The Pareto Principle is simply the 20/80 rule. 80 percent of impact results from 20 percent of the effort. The rule plays out in a number of different situations in society:

Think about these situations. Do they sound familiar?

• 80% of a company’s sales come from 20% of its clients
• 20% of emails received yields 80% of the value obtained; the other 80% of email is virtually worthless
• Most people derive 80% of the value they receive from their computers from 20% of computer’s functions
• 80% of your problems come from 20% of your staff
• 20% of the employees will make 80% of the organisation’s decisions
• 20% of a company’s employees take 80% of its sick leave
• At a picnic 20% of the people will eat 80% of the food

And finally…

• 80% of the clothes you wear regularly are only 20% of what hangs in your wardrobe!

“The whole point of getting things done is knowing what to leave undone”
–Lady Sheila Reading


Pareto’s 80/20 Rule:

Focus on the 20% of Activities that
can produce 80% of your results

Identifying your Vital 20%

According to John Maxwell, the renowned leadership thinker, there are 3 things regularly happening in organisations.

• Too few employees are doing too much
• Too many employees are doing too little
• Too many employees are doing the wrong thing

For managers, your vital 20 percent is often the coaching and development of people. You should use coaching strategies to encourage and empower your team. It’s vital that you ensure your people are adhering to the company’s strategic plans. You also need to help your direct reports gain the skills, knowledge, and attitude to move on in their careers.

Perhaps the very best question that you can memorize and repeat, over and over, is, ‘what is the most valuable use of my time right now?
–Brian Tracy

John Maxwell advocates there are 3 key questions we should ask in order to identify the vital few:

1: What is REQUIRED of me?
Any assessment of priorities needs to begin with a realistic assessment of what you must do. To satisfy your employer, what must you do? If you lead others, then what must you personally do that cannot be delegated to anyone else?

2: What gives me the greatest RETURN?
As you progress in your career, you begin to discover that some activities yield a much higher return for the effort than others. After determining requirements, focus on choices with a high return on investment (ROI).

3: What gives me the greatest REWARD?
If you do only what you must, along with what is effective, then you will probably be highly productive. However, you may not feel fully satisfied. It’s essential that you consider what gives you personal contentment.

Remember, to work effectively and efficiently you need carry out an honest appraisal how you use your time. You need to identify your 80% — the results you want to achieve and then apply.

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