Pareto 80/20 principle
How to use it to get the maximum results with minimum efforts
In short, it says 80% of the result come from 20 % of the actions.
Most probably you may be already familiar with this if you studied the business of economics.
A bit of history
Vilfredo Federico Damaso Pareto was an Italian philosopher and economist born in 1848. One day he observed that at his farm that 80% of the healthy plant pods come up from the 20% of the pea plants. This discovery led him to find the more uneven distribution to in the different areas of life and business.
He discovered that 80% of the land is owned by 20% of people in Italy. He also applied the same formula in different fields and found that 20% of the production companies provide 80% of the production output.
What is Pareto's principle?
It is all about the imbalance of inputs and outputs that is called the 80/20 rule. However this ratio will not always be 80/20 it can be 90/10 or even 99/1, but most of the time it stays the same. we can see this imbalance in most of the cases such as:
- 20% of the customers are responsible for 80% of the profits.
- 20% of the software bugs cause 80% of the crashes.
- 20% of patients account for 80% of the healthcare spending.
- 20% of the clothes mainly responsible for the dressing style.
- you spend 80% of your time in 20% area of the house.
- I have around 50 apps on my phone 80% of the time I only use 10 of them.
How to use the Pareto principle
It doesn’t matter what is your job title whether you are a business executive, student, or business owner, we all faced constant challenges with the limited resources sometimes. we have a project deadline on our heads in those situations we can maximize the time utilization by the Pareto principle.
if you are a freelancer you should identify which one is the top 20 % high paying clients that are contributing towards 80% of your earnings.
So if you trying to learn a new skill or a new course 80/20 mindset will help you to stay on the strategic plan rather than spending endless hours looking for better courses.
We can apply the Pareto principle to almost any situation by understanding the principle of how to prioritize the tasks accordingly.
we can specifically apply this to goal setting and productivity. Take a piece of paper and write down the 10 goals, then ask yourself if you could only pick only one goal that has the highest impact on your life.
Then pick the second one from the list. when you are done with both goals you will find out that you have done 80 percent of the most important goals.
You have come into a situation where you are busy the whole day and still got accomplished a little. This is because we are working on the tasks that are low value and we are procrastinating on the one or two tasks that make a real difference.
The most rewarding tasks are usually the hardest and complex. whenever you begin the task you should ask whether this task is in the top 20 % of your daily activities.
Also, there is are always a temptation to finish the small task then our mind releases a chemical in the brain dopamine that gives a feeling that we have hit some sort of significant task but in reality, we finished a small and low-level task. So it would be better and productive that we start our day with one or two most productive task that gives you the most sort of results.
How to use it in your career
Whatever you do look for applying the Pareto principle 20 percent of the dedicated effort in the right direction will give you the best result. If your goal is to become a data scientist then your primary target should be data wrangling. There will be a lot of unstructured data and you have to clean it up to perform further analysis. so putting the time effort into pandas, Numpy, sci-kit-learn will provide you most results.
If your goal is to build some muscle you have to look for the top 20% of the exercise that gives the maximum results. compound moments squats, deadlifts, bench press, bent-over rows, pull-ups, push-ups, and dips should be your main priority to load that muscle mass. Of course, nutrition also plays a crucial role in muscle building but if you apply the same principle in that as well you will have outstanding results.
Some experienced business managers use the Pareto principle in their life they have found some exiting outcomes such as
- The top15% percent of our customers account for 68% of the total revenue.
- The top 5 products account for 75% of the sales.
- In a typical meeting, only a few people make comments rest of the people tend to stay quiet.
80% of the revenue comes from 20% of the customers that why Microsoft, amazon gives priority premium support to some of the customers that generate 80% of their revenue.
In Conclusion, you have selected your top 20% of the tasks that will stay focused in your long-term plan and actions that will have the highest impact on your life.
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