Pareto’s Law: How to learn to do only what brings real results?

business and clinical psychologist

“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? What is the reason why some tasks seem easy and enjoyable and others seem hard and boring? Why do we use some things all the time and some things lie idle? Pareto’s law helps answer these questions. Also known as the 80/20 rule.

What is Pareto’s Law?

Pareto’s Law is a rule of thumb that says that in many situations, 20% of the effort gives 80% of the result. The other 80% of the effort is only 20% of the result.

This principle was named after the Italian economist and sociologist Vilfredo Pareto. He discovered in the late 19th century that 20% of the Italian population owned 80% of the land. Later it turned out that this ratio is also observed in other areas. We are talking about business, psychology, politics, etc.

This law is useful for analyzing the efficiency of activities and optimizing resources. It can be used to identify the most important and prioritized tasks that bring most of the results, and to eliminate unnecessary or unproductive activities that take a lot of time and energy. In this way, productivity, quality and satisfaction are increased.

Why 80 by 20?

The figures given in the law cannot be considered unconditionally accurate. It is more of a mnemonic rule than a real guideline. The choice of numbers 20 and 80 is also a tribute to the merits of Pareto, who identified a specific structure of income distribution among Italian households. It was characterized by the concentration of 80% of income in 20% of families.

However, the ratio may be different in different situations. For example, 10/90, 30/70 or 40/60. The main thing is not the specific figures, but the fact that there is a significant difference between cause and effect.

Who came up with this theory?

As a universal principle, Pareto’s law was proposed by Joseph Juran, an American engineer and quality consultant, who in his publication referred to a private regularity identified by Vilfredo Pareto.

Juran expounded the idea of this principle in the first edition of his quality handbook in 1951. Subsequently, in the article “Mea culpa” (Italian: “My fault”), he described how he came up with the idea. He explained why the name “Pareto’s principle” came about, although Pareto himself had not proposed such a thing.

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.

• Determine your goals and priorities in developing your career and choosing a specialty in your 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 are you doing? How do they align with your goals and priorities? Which tasks are more rewarding and enjoyable for you? 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 to remove them from your work or study process.

• Optimize your resources. What potential do you have? It could be money, time, knowledge, skills, equipment, people, etc. How do you use your resources? Which ones have more impact? What reserves can you save or free up? All of these 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 study? 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 at the end of your activity? What brings you joy and happiness? What gives you pride and self-esteem? What makes your life more complete and meaningful?

How do you use and apply it in your life?

To use Pareto’s Law in your life, you need to follow a few steps. They look like a business process, but are necessary to make the principle work.

1- Define your goal or objective. What do you want to achieve or accomplish? State it clearly and specifically.

2. Make a list of all the activities or factors that are necessary to accomplish 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 on two criteria: importance and complexity. The first is the degree of impact on the outcome. The second is the degree to which it costs time, energy, money, etc. You can use a scale of 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 difficult actions or factors. These will be the ones that will give you 80% of the results at the lowest cost. Concentrate on them and try to accomplish them as best and as quickly as possible.

6. Postpone or abandon 80% of the remaining actions or factors. These will be the ones that will only give you 20% of the results at a high cost. 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 outcome. How did you get closer to 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 applying Pareto’s law in life

Pareto’s Law can be applied to many different areas of life. Here are some examples of how you can use it to your benefit.

Work and professional development

You can identify which tasks are the most important and prioritized for your project, career or business. Also focus on them. Analyzing activities according to Pareto’s Law allows you to determine which goals are unnecessary, routine, or ineffective. What for. To delegate them to line employees or automate them.

Analyzing activities and adjusting to focus on the most significant tasks increases productivity, quality of work and revenue.

Study and academic achievement

It is possible to understand which subjects or topics are the most interesting and useful for your education or profession, to pay more attention to them. Students and pupils learn which subjects are boring or irrelevant for future profession. Also study them in the minimum necessary way.

This will make you a better professional by freeing up your time and attention by reducing the emphasis on non-core subjects.

Personal relationships

The law allows you to analyze which people are the closest and dearest to you. As a result, you can devote more time and energy to them. Using this principle, you can fix and finally recognize who is toxic, negative or not worthy of your trust.

As a result – limit your contact with them. At the same time improve your relationships with family, close friends and the right partners.

Gesundheit

There is an opportunity to identify which habits or factors contribute to your health and well-being. The key is to maintain them. Along with that, find out what eating or behavioral habits are detrimental to your health and well-being. And start getting rid of them. That way, you can improve your physical and mental well-being.

Hobbies

You can figure out what activities or interests bring you more pleasure and meaning. Engage in them. Which areas or interests cause you boredom or irritation. Give them up. Once you have assessed the situation, there is an opportunity to adjust your behavior and get more joy and satisfaction from your leisure time.

Does this principle always work?

Pareto’s 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 changes, random factors, intangible effects or the complexity of systems. It also does not provide specific recommendations for solving problems or achieving goals. The law only indicates general trends. Therefore, it should be used as a tool for analysis, not as a ready-made prescription for action.

What are the pros and cons of the law?

The Pareto principle has its pros and cons. They should be taken into account when applying it.

Among the positive points, the following can be emphasized:

• simplicity and comprehensibility. The Pareto law is easy to memorize and use. It does not require complex calculations or formulas, helps to visualize and structure information;

• universality and flexibility. The principle can be applied to different spheres of life and activity. For example, it can be adapted 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 just a tool that helps to improve the quality of life and satisfaction.

There are disadvantages of 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 a 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-taking and liability. 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 technique without the support of a moderator or experienced colleague leads to conflict or dissatisfaction among coworkers (if work processes are involved).