18May
By: suchitra mishra On: May 18, 2020 In: Business, Career, Life, Management, Performance Comments: 11

I am a big fan of the Pareto Principle (the 80-20 Rule) and have applied this in many areas of my work and life for some interesting outcomes. Whether it is in performance management, team management, relationships or home, one question helps me direct my energies and time – where should I focus first to get 80% of the desired results? As most of us have learnt the hard way, it is not enough to work hard, we have to work “smart”. True productivity comes from separating the urgent from the important, and the unimportant from everything else. From reducing the details and then detailing out the details. Not everything needs to get done. And fewer things need to get done now. There is an imbalance in efforts and results in almost all areas of life and identifying the crucial “20%” that brings you satisfaction/sense of achievement/happiness helps in identifying where 80% of your efforts should go in. This is where the Pareto Rule comes in useful.

The Pareto principle (also known as the 80–20 rule, the law of the vital few, and the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. [Source : Wikipedia]

Here are five areas where applying this rule of thumb can help in saving time and energy to  concentrate on what really matters :

1) To-Do List of the day :

Estimate a value on a scale of 1 to 10 (1 – least impact, 10 – highest impact) in terms of positive results (goal achievement or satisfaction) against each of your tasks for the day – email, customer calls, reports, household stuff. Next, estimate the tasks by amount of effort needed on the same scale of 1 to 10. Divide the results by the amount of effort to get a “priority” ranking. What 20% of the tasks listed contribute to 80% of the goals you seek to achieve? Concentrate on these tasks first in your most productive period of the day.

2) Problem Solving :

Pareto Analysis can really help in identifying the most critical problem to solve as well as the level of criticality. Identify and list problems and their causes. For ex. If the problem is to improve profits (my favourite one), list all root causes (you can use the 5 Whys method) and then score them on their impacts (e.g. magnitude of cost). Focus on finding a solution to the problem with the highest score. Thus, the improvements or solutions can be prioritized in the areas that need them the most.

3) Passion :

In life there are certain “activities” you do (your 20%) that account for the greatest (your 80 %) of your happiness and satisfaction. These activities are the ones that we feel most passionately about. The key, once you have identified your passions, is to be very careful of the time spent on those 80% activities that produce little satisfaction for you. No one really benefits (definitely not you) if you are not happy or passionate about what you are doing. Apply Pareto to not only find your passions but also pursue them by comparing the results against the efforts you need to put in.

4) Relationships :

20% of the people you know give you 80% of your joy and support. Observe your friends, office colleagues and social circle. Where are you investing your time and energy more? Compare that to the amount of stress or joy you are getting in return. Are you letting the whiners and complainers at work consume all your time and energy leaving you with very little to spend with the people who make you happier ? Time to apply the Pareto, then.

5) Cut the Clutter:

Most people only use 20% of what they own on a regular basis. A good part of the other 80% is things we used in the past or we think we may use in the future. This basically means that about 80% of our possessions just sit around every day, doing nothing more than gathering dust or occupying space. Take a look at your desk, cupboard, files on your computer – if you have not used something in the past year, it is highly unlikely you will ever use it. Lighten your load – throw, delete, donate that 80%.

As Richard Koch says in his book “The 80/20 Principle: The Secret to Achieving More with Less” –  The unspoken corollary to the 80/20 principle is that little of what we spend our time on actually counts. But by concentrating on those things that do, we can unlock the enormous potential of the magic 20 percent, and transform our effectiveness in our jobs, our careers, our businesses, and our lives.

Have you used the 80/20 Rule in any area of your life ? What is the most creative way that you can think of to achiever greater personal productivity using the Pareto principle ? Where else have you observed the effect of this thumb rule ? I would love to know.

11 Comments:

    • Ask the Right Question | Social Media For Business
    • February 06, 2012
    • Reply

    […] Five Ways to Use the Pareto Principle in Work-Life (blogbysuchitra.wordpress.com) Share this:ShareFacebookStumbleUponEmail This entry was posted in Uncategorized by admin. Bookmark the permalink. […]

    • Nathalie Villeneuve
    • February 15, 2012
    • Reply

    Great article! I recently re-read “The 7 Habits Of Highly effective People” by Steven R. Covey…I truly loved to re-discover the quadrant principals. It’s amazing how much time we spend on things that are urgent but not important…and often on things that are not urgent and not important! The Pareto Principle is new to me but it resemble the Covey’s quadrant to me… I will look at it more closely as I think it a great want to be so much more productive! Thank you for sharing 😉

      • Suchitra Mishra
      • February 15, 2012
      • Reply

      Hello Nathalie,

      Thanks so much for dropping by and leaving your views here. Yes, I too can see some similarities between Stephen Covey’s amazing principles and the Pareto rule.

      I have found it very effective in helping me focus on things that are really important and not just urgent – so often we just keep busy as opposed to being productive… Do remember to come back and share your experiences on whether Pareto worked for you too.
      Regards,
      Suchitra

    • Business Operations Performance Metrics: Gross Margin – Five Steps to Improve your Margin « Happy in the now…
    • May 06, 2012
    • Reply

    […] your customers (or customer segments) that gives you a view of where your profits are coming from. Pareto’s principle applies here too; around 80% of your profits would come from 20% of your customers (or segments). […]

    • Business Operations Performance Challenges – Five Barriers to Operational Excellence « Happy in the now…
    • May 20, 2012
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    […] time getting the systems to work for them and 20% of time on actually executing on the information (Pareto at work again). This is a huge pain point, and one that champions of business performance […]

    • Five Strategies to Improve the Quality of Data – Business Operations Performance Challenges | Suchitra Mishra
    • August 07, 2013
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    […] root causes. The way to do this is to not attack the whole set of data in one instance – apply the 80/20 rule and select a few segments of data to dig into. This will increase your chances of isolating the […]

    • Suchitra Mishra
    • August 07, 2013
    • Reply

    […] root causes. The way to do this is to not attack the whole set of data in one instance – apply the 80/20 rule and select a few segments of data to dig into. This will increase your chances of isolating the […]

    • Five Project Management Performance Metrics key to Successful Project Execution – Operational Excellence | Suchitra Mishra
    • October 30, 2013
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    […] are caught, the more impact they will have on the project, it is worth to mention here about Pareto’s principle i.e. 80/20 principle, which PM can use to categorize causes of defects and late time entry relationship. As per this law […]

    • Oorja Biz Ops | Business Operations Performance Metrics: Gross Margin – Five Steps to Improve your MarginOorja Biz Ops
    • December 19, 2013
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    […] your customers (or customer segments) that gives you a view of where your profits are coming from. Pareto’s principleapplies here too; around 80% of your profits would come from 20% of your customers (or segments). […]

    • Five Project Management Performance Metrics key to Successful Project Execution – Operational Excellence |
    • May 05, 2015
    • Reply

    […] are caught, the more impact they will have on the project, it is worth to mention here about Pareto’s principle i.e. 80/20 principle, which PM can use to categorize causes of defects and late time entry relationship. As per this law […]

    • Five Project Management Metrics key to Successful Project Execution | Career Resources | Oorja
    • September 19, 2015
    • Reply

    […] are caught, the more impact they will have on the project, it is worth to mention here about Pareto’s principle i.e. 80/20 principle, which PM can use to categorize causes of defects and late time entry relationship. As per this law […]

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