How often do you use Pareto's Principle?

Today is April 30 and the Navigate the Chaos question to understand is “how often do you use Pareto’s Principle?” Navigating the chaos and practicing the art of living well involves making thousands of decisions each day from the mundane (what to wear) to the serious (having a difficult conversation with a loved one). Identifying what to do, as opposed to what not to do, is both art and science and takes years of practice and adjustment. Since everyone has the same amount of time each day, determining how best to use your time is a strategy used by many who translate one dream after another into reality. In a September 2018 Psychology Today article "How Many Decisions Do We Make Each Day?" Dr. Eva M. Krockow noted “many of our daily decisions are made on autopilot. Sometimes we are unaware of having an option. Increased awareness and mindfulness can help us navigate our daily maze of decisions and support our concentration.” Today’s reflection might provide a momentary glimpse into your ability to decide between options. For some who navigate the chaos and practice the art of living well, they rely on Pareto’s Principle.

The Pareto Principle, named after esteemed Italian economist Vilfredo Pareto, specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. Pareto made his original observation while at the University of Lausanne in 1896 and published it in his first work, Cours d'économie politique. Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population. He made similar observations in other countries he studied.

For the most part, the Pareto Principle is an observation that things in life are not always distributed evenly. The Pareto Principle is also known as the Pareto Rule or the 80/20 Rule. Another way to view this principle is to focus on the few things that get you the most benefit. For example, in sales, 80% of a company’s revenue usually stems from 20% of the customers. When applied to time management, the Pareto Principle offers a valuable tool for anyone looking to navigate the chaos and practice the art of living well.

The Pareto Principle can help you determine which decisions not to make. It can clarify priorities, save time, and help you focus on what is most important. Everything cannot be a priority. In his February 2017 article "The Undisciplined Pursuit of More (The Art of Limiting Yourself to Only the Essential)" Thomas Oppong noted “When you force yourself to focus on essential tasks that have a large Return on Investment (ROI), you will be more productive, achieve more and simplify your life in the process.” To that end, and applying the Pareto Principle to his life, Robert Glazer wrote in a September 2018 Forbes article “The Pareto Principle holds that 80 percent of results come from 20 percent of effort. That means you are probably spending 80 percent of your time not accomplishing much.” Since “productivity is not about turning your schedule into a game of Tetris, cramming as much as humanly possible in your day and your life” Glazer recommends a ‘stop-doing’ list, as opposed to a ‘to-do’ list.

As you work on translating one dream after another into reality, ask yourself what you can stop doing immediately, in the short-run, and in the long-run? Since 20 percent of your effort is producing 80 percent of the results in your life, how often are you reflecting on this? Can you identify the 20 percent of your effort that is generating the 80 percent of results? Have you thought about life in this manner?

For an illustration, let us use a scenario where you own a bakery as part of today’s reflection. After six months you calculate that 80 percent of your sales come from brewing coffee that only requires 20 percent of your time in the morning. Conversely, 80 percent of your time each morning involves making the baked goods, muffins, and sandwiches you sell alongside the coffee. For anyone looking to navigate the chaos of running a bakery, this analysis using Pareto’s Principle is critical since it helps you understand that spending any time creating new food items you are better off updating your coffee selection.

If you remain unfocused as you go about running your business, career, or personal life, you risk wasting time on things that really do not matter all that much. You just need to make the difficult decision to add those tasks to your ‘stop-doing’ list. As Geoffrey James wrote in a May 29, 2012 Inc. article “Having a simple list of things to do almost forces you to waste time doing stuff that doesn't really count. That is true even if you prioritize according to importance. Plenty of important things take so much effort that, in the end, they're not worth actually doing.”

How often do you use Pareto’s Principle to help you navigate the chaos and identify how best to spend your time?