The Pareto Principle

In 1897, Vilfredo Pareto, an Italian economist, observed that 20% of pea pods in his garden produced 80% of the peas. He then applied the same logic to land distribution in Italy and found that 80% of the land was owned by 20% of the population. Richard Koch, wrote the best-selling book, The 80/20 Principle. This blog captures some content from his book.

List of examples

• 80% of business will come from 20% of your clients.

• 80% of what fulfills you, will be from 20% of your activities.

• 80% of your health lifestyle goals will be accomplished by 20% of the activities you choose.

• 80% of the value you will receive will come from 20 percent of your activities.

• 80% of a company's output is produced by 20% of its workers.

• 80% of your success comes from 20% of your ideas.

• 80% of sales are from 20% of clients.

• 80% of sales are produced by 20% of a company's products or services.

• 80% of stress is caused by 20% of stressors.

• 80% of results are caused by 20% of thinking and planning.

• 80% of family problems are caused by 20% of issues.

• 80% of grief is caused by 20% of people in our life

• 80% of company's absenteeism is caused by 20% of staff.

• 80% of investment gains are produced by 20% of investments.

My take:

1. The Pareto principle serves as a reminder to stay focused investing 80 percent of my time and energy on the 20 percent of work that is important. It’s not just important to work hard and work smart, but also to work smart on the right things.

2. Always aim for tasks that have a high reward while needing the least effort.

3. Do more with less not more with more.

4. Do not equate effort with reward.

5. Being Insightful and selective is what will lead to achievement.

6. Work within your core competencies and outsource all else.

7. It is time use that is a challenge and not time management. Magnificent work is done in little time.

Conclusion: What this means is that not only does a small proportion of my effort generate the great majority of my results…the great majority of my effort if not intentionally selected is useless.