How to use the Pareto 20/80 principle in practice

How to use the Pareto 20/80 principle

The principle says that 20% of the efforts give 80% of the result, and the remaining 80% of the efforts – only 20% of the result.

The Italian economist and sociologist was led by peas when he noticed that 20% of the most viable pods produced 80% of the crop. Based on this, Wilfredo Pareto formulated a law that became applicable in the field of economics, political science and management.
Entrepreneurs claim that they get 80% of the profit from 20% of customers or 20% of employees generate 80% of the company’s income. And 20% of the value of the enterprise accounts for 80% of the costs. Also with time – 80% of productivity takes 20% of the time..

According to the law, people spend most of their resources, energy and energy on secondary tasks, instead of concentrating on important things that will do more good..

If a person wants to learn how to play the guitar, he must give a lot of time to training, and not to listening to the songs of famous musicians. When preparing natural coffee, correct grinding and brewing is more important than thinking about the amount of sugar in a cup..

Source: ru.wikipedia.org

So, the law 20/80 was applied by IBM. In the 1960s, its engineers identified 20% of the tasks that were used in 80% of cases with computers. They changed the algorithm. Popular computing has become easier, more convenient and faster. It gave a result – ІВМ left competitors behind.

How principle helps?

To spend time on things that produce results, define the task, small subtasks and set the “central node” – priority. Let’s say your task is to “publish a book.” In this case, the “central node” is the process of writing it..

Knowing the nodes is easier to measure activity and get feedback. Track in what circumstances, place of stay and time of day you can write more words. For example, giving a book 20% of the time in the morning, you write better and faster, and vice versa in the evening. Spend it more on fewer words due to fatigue. Accordingly, you need to concentrate energy in the morning.

Define subtasks and try to delegate them to others. Hire a corrector to correct mistakes when you feel that it takes you a significant part of the time and slows down the “central node” or the designer to create illustrations. If you draw well on your own and with 20% of the time spent, you get 80% of the happiness from this lesson, think about how to retrain as an artist.

By analyzing the task in this way, we free up resources and concentrate on the most productive action. The overall result is getting better.

Related Priorities

Priority on the way to the goal is not always the same; there are also related ones. There is important and secondary, and sometimes the second becomes the first.

If you write a book, but you have never shown fragments to anyone, it may turn out to be bad and will require a lot of refinement as a result. It is important here to periodically move away from the central node – “write” to the secondary node – “receive feedback”.

To set tasks, subtasks and nodes, analyze.

How to do Pareto analysis?

Pareto analysis is a way to identify tasks that are more worthy of time and effort. In other words, this is what should be done first and get priority.

1. Make a list of tasks and actions

Gather a list of all the tasks that face you. Indicate those that affect, seem important and necessary. Next to each task, write a set of actions that are needed to complete it. Determine how much time you spend on each of them..

2. Define the “central node”

When you make a list of actions and see how much time you spend on each, you will understand whether you are spending your hours correctly. Suppose there is a task to earn more this month than last. To achieve it, you need to “outline” your work day. See how much time you devote to communication with clients, how much to collect information for professional development, and how much to view social networks and meetings with colleagues. Already at this stage, you can identify the “important” and, for the sake of purpose, abandon Instagram and Facebook.

Take a deeper look at each of these actions. If you see that most of the time spent on contact with partners gives only 20% of the professional result, then you need to reduce participation in such negotiations. Shift the focus of communication towards only work topics and those employees who will help achieve more.

The same goes for customers. According to the rule, 2 out of 10 customers will give 80% of the result. Decide which one you can earn more from and focus on communicating with them..

As time progresses, priorities shift. Therefore, periodically review the list and identify new “central nodes”.

3. Set the execution order

After you identify the important actions, you need to arrange them in the correct sequence. Among them are those that require more resources than the rest. Working with a contractor can be more important than interacting with a client, and it, in turn, is more important than long meetings or training..

One more tip

The Pareto principle speaks of 20% of the resources that give the main 80% of the result. But the proportion is not always that way. It changes and can be 10/90 or 24/76. The point is to become more productive and increase the first digit. But do not try to turn it into 100%. Do not forget about the soul, good nutrition and meeting with friends. Without completing the secondary part, the main goal loses relevance.

Plan a strategy for “unimportant” cases. If it doesn’t work, “insert” them between the “important” ones. This will distribute mental and physical stress, help you relax and be distracted. As a result, you will accomplish secondary goals and maintain effectiveness for priorities..