“Have you ever wondered why some people achieve great success in their activities, while others spend a lot of time and effort, but get little result? For what reason do some tasks seem easy and pleasant, while others are hard and boring? Why do we use some things constantly, while others lie idle? The Pareto law helps to answer these questions. Also known as the 80/20 rule.”
What is Pareto’s law?
The Pareto Law is a rule of thumb that says that in many situations, 20% of the effort produces 80% of the results. The other 80% of the effort produces only 20% of the results.
This principle was named after the Italian economist and sociologist Vilfredo Pareto. At the end of the 19th century, he discovered that 20% of the population of Italy owned 80% of the land. Later, it turned out that this ratio can be traced in other areas as well. We are talking about business, psychology, politics, etc.
This law is useful for analyzing the efficiency of activities and optimizing resources. It helps to identify the most important and priority tasks that bring the most results, and to eliminate unnecessary or unproductive actions that take up a lot of time and energy. This increases productivity, quality of work, and satisfaction with what has been achieved.
Why exactly 80 to 20?
The figures given in the law cannot be considered absolutely precise. They are more of a mnemonic rule than real guidelines. The choice of the numbers 20 and 80 is also a tribute to the merits of Pareto, who identified the specific structure of income distribution among Italian households. It was characterized by the concentration of 80% of income in 20% of families.
However, in different situations the ratio may be different. For example, 10/90, 30/70 or 40/60. The main thing is not the specific numbers, but the fact of a significant difference between causes and effects.
Who came up with this theory?
As a universal principle, the Pareto law was proposed by the American engineer and quality consultant Joseph Juran, who in his publication referred to a particular pattern identified by Vilfredo Pareto.
Juran outlined the idea of this principle in the first edition of his quality handbook in 1951. Later, in the article “Mea culpa” (Italian: “My fault”), he described how he came to this idea. He explained why the name “Pareto principle” arose, although Pareto himself did not propose such a thing.
The Benefits of Pareto’s Law
This principle helps in different areas of life: work, study, personal relationships, health, hobbies, etc. With its help, you can do the following things.
- Define your goals and priorities in career development and choosing a specialty in studies. Understand what is really important and valuable to you, what you want to spend your time and energy on. Set goals and measurable indicators of achievement.
- Analyze your activities. What tasks do you perform? How do they relate to your goals and priorities? Which tasks bring you more benefit and pleasure? You will be able to understand which issues take up a lot of your time and energy. But at the same time give little result, so that you can remove them from your work or study process.
- Optimize your resources. What potential do you have? This could be money, time, knowledge, skills, equipment, people, etc. How do you use your resources? Which ones are more effective? What reserves can you save or free up? All of this can be seen to focus on the most profitable use of energy.
- Improve your efficiency. How can you improve the quality of your work or studies? How can you make your activities more interesting and motivating? How can you avoid or minimize mistakes, problems, and risks?
- Increase your satisfaction. How do you feel during and after your activity? What brings you joy and happiness? What makes you proud and self-respecting? What makes your life more fulfilling and meaningful?
How to use and apply in life?
To use the Pareto principle in your life, you need to follow a few steps. They look like a business process, but they are necessary for the principle to work.
1. Define your goal or objective. What do you want to achieve or do? Formulate it clearly and specifically.
2. Make a list of all the actions or factors that are necessary to achieve your goal or objective. Do not limit yourself in quantity or quality. Write down everything that comes to your mind.
3. Rate each action or factor according to two criteria: importance and complexity. The first is the degree of influence on the result. The second is the degree of expenditure of time, energy, money, etc. You can use a scale from 1 to 10 or any other rating system.
4. Rank all actions or factors in descending order of importance.
5. Identify the 20% most important and least complex actions or factors. These will be the ones that will give you 80% of the result with minimal effort. Focus on them and try to do them as best and as quickly as possible.
6. Postpone or eliminate 80% of the remaining actions or factors. These will be the ones that will only give you 20% of the results at great expense. They are not worth your time and energy. Don’t try to do everything perfectly or take into account every detail. Focus on the essentials.
7. Evaluate your progress and results. How did you approach your goal or task? What did you do well? What could be improved? How do you feel after completing your actions? What did you get in return?
Examples of the application of the Pareto law in life
The Pareto Law can be applied to many different areas of life. Here are some examples of how you can use it to your advantage.
Work and professional development
You can determine which tasks are the most important and priority for your project, career or business. And focus on them. The activity analysis according to the Pareto law allows you to determine which goals are unnecessary, routine or ineffective. Why? To delegate them to line employees or automate them.
Analyzing activities and adjusting with a focus on the most important tasks improves productivity, quality of work and income.
Studies and academic achievements
You can understand which subjects or topics are the most interesting and useful for your education or profession, and pay more attention to them. Students and schoolchildren will learn which subjects are boring or irrelevant for their future profession. Also, study them to the minimum necessary extent.
This will allow you to become a better professional by freeing up time and attention, reducing the emphasis on non-core subjects.
Personal relationships
The law allows you to analyze which people are closest and dearest to you. As a result, you can devote more time and energy to them. Using this principle, you can record and finally admit who is toxic, negative, or unworthy of your trust.
As a result, limit contacts with them. At the same time, improve your relationships with family, close friends and the right partners.
Health
It is possible to identify which habits or factors contribute to your health and well-being. The main thing is to maintain them. At the same time, find out which eating or behavioral habits are harmful to your health and well-being. And start getting rid of them. This way, you can improve your physical and mental state.
Hobby
You can figure out what activities or interests bring you more pleasure and meaning. Do them. What areas or interests bore you or irritate you. Give them up. Once you have assessed the situation, you have the opportunity to adjust your behavior and get more joy and satisfaction from your leisure time.
Does this principle always work?
The Pareto law is not universal and does not always work. It should be applied with caution, looking critically at the analysis, taking into account the specifics of each situation and possible limitations.
For example, the principle does not take into account the dynamics of environmental change, random factors, intangible effects, or the complexity of systems. In addition, it does not provide specific recommendations for solving problems or achieving goals. The law only points to general trends. Therefore, it should be used as a tool for analysis, not as a ready-made recipe for action.
What are the pros and cons of the law?
The Pareto principle has its pros and cons, which must be taken into account when applying it.
Among the positive aspects, the following can be highlighted:
- simplicity and clarity. The Pareto law is easy to remember and use. It does not require complex calculations or formulas, it helps to visualize and structure information;
- universality and flexibility. The principle can be applied to different areas of life and activity. For example, adapt to different conditions and goals. In addition, it can be easily combined with other methods and techniques;
- efficiency and effectiveness. It helps to focus on the most important and priority. By analyzing their activities, people themselves begin to save time and resources. The law is only a tool that helps to improve the quality of life and satisfaction.
There are also disadvantages to the Pareto law:
- inaccuracy and approximation. The law is not precise and is not scientifically substantiated. It is based on empirical observations and generalizations, so it may contain errors and value judgments;
- limited and incomplete. The principle does not take into account all aspects or factors that may influence the situation or outcome. This analysis does not take into account the variability and complexity of the environment. Does not provide solutions or answers to all questions;
- risk and responsibility. It can lead to undesirable consequences and losses if used incorrectly or thoughtlessly. Subjectivity in assessing the situation leads to missing important details or opportunities, so using this method without the support of a moderator or an experienced colleague leads to conflicts or dissatisfaction of colleagues (if we are talking about work processes).