I’m sitting here trying to build a full blog site and started thinking. Why am I so busy, but get nothing done? Some of the worst feelings I can experience would be finishing up an entire day of work. Only to realize that I achieved nothing. So I did a little research into why and here are my finding and here is what I found.
The 80/20 rule or Pareto principle states that roughly 80% of results come from about 20% of the work. The law serves as a general reminder that there is an imbalance how much comes from what is put in.
Let’s dive into this concept some more and see what it means and how you can start using this to increase your success with your goals.
What is the Pareto principle?
The origin of the Pareto principle came from Vilfredo Pareto in Cours d’économie politique. He noted that a roughly 80/20 connection in regards to who owned land and how much of it they owned. This was originally applied to measuring the distribution of wealth in society leaving to the “Matthew Principle.” This rule stated that 80% of the wealth in society belonged to about 20% of the population.
How does this principle appear in the real world?
I know what you may be thinking at this point. “How does the Pareto principle got to do with me feeling so busy?”
School
College students are recommended forever 1 credit hour of a course they take, there should be an additional 3 hours of study outside. With that in mind, that means 25% of time spent in the classroom would require 75% outside of the school.
If we add other factors, such as time spent commuting from room to room, extra time for homework and projects. Then we can derive another small fraction of time added to those three hours. Slowly moving it closer to that 80/20 split.
Corporate world
In the corporate world, financial advisory companies will generally apply this principle to help manage their clientele, and they are dependent on providing excellent customer services to the clients, but not every contract is for the same amount of income. If we look at the principle in this aspect, then we can derive that if a company has about 100 clients, then-then 20 of those clients equate to roughly 80% of the company’s income. Using this principle, a company use it as a scalable means to continue increasing their top 20% while they understand that adding new clients will affect the overall balance of the other clients and the bottom line.
Potential flaws in this principle
While this principle is relatively accurate in the majority of situations, it may never fall into every scenario. Let us say you are the owner of a small business with 100 employees. Using metrics and Key Performance Indicators, you find out that 30 of your employees are performing 60% of your overall output. That leaves 10% in the gray area where you are not sure where this falls in. This is an example of why it is critical for one to understand that the Pareto Principle is there for understanding and not a necessary rule to use in all aspects of business or living.
Time Management and Pareto
Back to the earlier question that leads to this section. Have you ever had a day, week, a month where you felt like you worked and worked and worked? Shed all that blood, sweat, and tears? Only to feel like you got nowhere on your work?
By applying the Pareto principle to managing time, we can derive that 20% of the work equates to 80% the results. It does not mean that one must only work 20% of the time. It just means out of 10 tasks, 2 of which are the most valuable to the delivery of a successful product. By determining the 20% of the vital functions to focus on first, the final 80% will fall in line with time.
Goal Setting
Do we have a lot of things we want? Wealth, success, financial freedom, that new car, that new house, the list goes on and on. How do we use the principle here? If we look at all the goals we have and look at them from this observational point of view, we can see that. 20% of your goals will lead to 80% of what you want.
In the previous list of mentioned desires, there were. Wealth, success, financial freedom and new this or that. Wealth via success will lead to others naturally. I know what you are thinking, but wealth is a significant factor. That’s why we need to dive in further. To obtain wealth, we have to look at the other factors leading to it. What is your net worth? What debts do you have? How are you managing your money? Do I have an emergency fund? If we dive into that, we can determine. Of all these items, which ones should I solve first?
First steps to getting wealth goals jump started
Dave Ramsey, one of Americas most trusted voices on money and wealth, In his book “The Total Money Makeover: A Proven Plan for Financial Fitness
The next factor is what he calls this a “Debt Snowball.” You break down all your debts and make minimum payments on all the lower priority debts on that list. The one you focus on first is the one that will be paid off first. Once that is gone. The next becomes vital until they are cleared out.
Viewing with Pareto later the debt snowball is making 20% of the money help wipe out 80% of the debt over time till it’s gone.
Challenge of the week
I challenge you to put the Pareto principle for the next few days and see how it may assist you with achieving more control over your life
Level 1: Figuring out what’s important
At the beginning of each day or work shift if you don’t have tasks for your day yet.
- Write down everything you need to do that day
- Run through your result and begin to rank them based on the following criteria from highest to lowest priorities.
- There is a chance that this might be a task what you don’t want to do, but once it’s out of the way, it is gone.
What if I want to keep it all in my head?
Now, I don’t want you to do this all in your head. I mean write it down. The Confucian scholar Xunzi had a quote I want you to apply. ” What I hear, I forget. What I see, I remember. What I do. I understand.” The biggest issues of leaving everything to memory is that it will lead to a chance you will forget to apply this. Writing down the information will allow you to enforce your plans.
Level 2: For our readers who want to achieve that extra 1%.
I want you to hold future selves accountable this week. I know what you are saying, “But Hien. We cannot time travel. How can I hold my future-self accountable for this challenge?” You just need to do one thing. Set up reminders on your phone or email calendars. Phone works the best. Throughout your day, have your phone send you a calendar reminder to keep you in check. You could have it be anything. Here are a few examples of what you could have sent it to you.
- Are you maximizing your time?
- Are you focusing on the minutia and not the important stuff?
- How are you coming along on your Pareto challenge?
You can set up 1 2, or if you are feeling up for it 3 times a day throughout your day to keep yourself in check.
I hope you all the best and look forward to your success and progress. I would love to hear your thoughts, your success, even your failures. Feel free to leave comments for other readers and me to discuss, if you like. If you prefer, please email me your results as well
