The Pareto Principle is also known as the 80-20 Rule. It is a principle based on cause and effect. In other words, the Pareto Principle states that for many events, roughly 80 percent of the effect comes from 20 percent of the cause. In business, this is usually stated as “80 percent of your sales come from 20 percent of your clients.”
However, the Pareto Principle goes beyond sales. The principle arose from Vilfredo Pareto observing that 80 percent of land in Italy was owned by 20 percent of the population. But it shows up in baseball as well. Twenty percent of players are responsible for 80 percent of wins. And in investments; 20 percent of Warren Buffet’s portfolio is responsible for 90 percent of his wealth.
It is no surprise that we can apply this same principle to occupational health and safety when we point out that 20 percent of hazards are responsible for 80 percent of injuries.
Additionally, people have been applying the Pareto Principle to time management. Here’s how.
First, you have to come to the realization that most of what you do is essentially unimportant. It may not seem like it. Everything seems to be important, or at least we want to believe everything we do is important. But according to the Pareto Principle, 20 percent of your tasks are responsible for 80 percent of your success; therefore, the idea is to focus on that 20 percent. An article in the Harvard Business Review tells us how we can accomplish this.
- Make a list of your top six priorities
- Cross out the bottom five
- Put a post-it note of that one task on your computer
- Spend 90 uninterrupted minutes focusing on that one task—preferably first thing in the morning
- Bam! You’ve just realized 80 percent of your success
What’s also true—according to the Pareto Principle—is that 80 percent of your distractions come from 20 percent of sources. If you made a list of all the sources of your distractions, it might look like this:
- Incoming phone calls
- Unplanned visitors
- Social media
Figure out which source is the most distracting and eliminate that. That should get rid of 80 percent of your wasted time.
Once you start applying the Pareto Principle to your productivity, you’ll start finding new ways to apply it elsewhere in life.
Let us help your business increase productivity. Contact Vanguard Resources today.