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The Pareto Principle

The Pareto Principle or (80/20 rule) is sometimes referred to as the concept of the ‘critical few’ and the ‘trivial many’. The concept of the ‘trivial many’ often goes hand in hand with another concept called ‘the tyranny of the urgent’. We often react to trivial matters because they appear urgent. To avoid this trap, we must simultaneously consider the importance of the matter – not just its urgency.

The Pareto Principle was established by Vilfredo Pareto (1848-1923) when he observed that 20% of the people of Italy owned 80% of the wealth. This concept of disproportion often holds in many areas. The exact values of 20 and 80 are not significant; they could actually be 10 percent and 60 percent. What is important is that there is a considerable disproportion. The values of 20 and 80 just have a simple symmetry. This principle of concentration, inequality, or inverse proportion can be seen from many everyday examples and situations follow:

· 20% of time expended produces 80% of the results

· 80% of your phone calls go to 20% of the names on your list

· 20% of streets handle 80% of traffic

· 80% of meals in a restaurant come from 20% of the menu

· 20% of the paper has 80% news

· 80% of the news is in the first 20% of the article

· 20% of a home collects 80% dust

· 20% of people cause 80% of problems

· 20% of the features of a mobile application are used 80% of the time

These Pareto-type observations are not necessarily bad, or good. For example, if only 20% of the roads in a town handle 80% of the traffic, then that could be good for maintenance crew who can concentrate mainly on the fewer roads; but it could be bad for commuters who take the busy roads.

Such Pareto observations could lead to strategies; in turn road crews could try to move or reduce commuters on the busy roads, or commuters could move off on their own. The important thing is to notice any such disproportions, and then possibly act on such observations.

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Three Steps to use the Pareto Principle

The Pareto Principle provides you with a priority system to check incoming tasks against your obligations and performance or result areas. To build this priority system you need to have three things:

1. Knowing what your key result areas or goals are. In other words, what is most important.

2. Use the Pareto principle to prioritise your tasks.

3. Ensure that you protect these vital few activities from the ‘trivial many’.

1. Identify your key result areas

It is not unusual to be faced with a dozen tasks that demand your attention. You need to have an imaginary compass that keeps track on what is important on the front-burner of your thoughts. Your compass acts as the goals or objectives that you are aiming to achieve in the week, quarter, or year. Your top priorities are those that are aligned with your performance/job criteria, key result areas, or goals.

Any incoming information or requests for your time need to be weighed up against your current goals and objectives. Once this is assessed, you can assign the incoming task a priority. At work, these are things that you are measured against. In your personal life they are the pursuit of things that matter most to you or your family. If your goals are not aligned with the 80/20 rule, ask yourself the following questions:

· Are these someone else's goals?

· Do I need to add more goals/objectives?

· Am I doing what is important?

· Am I spending too long on these urgent goals or crises?

2. Use the Pareto Principle to set priorities

List all the activities that you have to do over the next week. But don't fall into the trap of using your to do list as a way to manage your time. Now put an A, B or C next to them:

1. 'A' is for your most important activities (those top 20%)

2. 'B' is somewhat important (60%)

3. 'C' is your least important activities (bottom 20%).

Put a time limit on those activities that you have classed as most important. How long are each of your 'A' activities going to take?

3. Protect the vital few from the trivial many

Gather all your top priority actions that you have to do next week (if you have followed the process, each of these actions should have a duration next to them!). The next step is to make time for these most important activities, rather than trying to find time later on.