The Pareto Principle

October 26, 2010 — Leave a comment

The Pareto Principle states that 80% of your return should be based on 20% of your effort. In other words, 20% of your efforts (when applied correctly) can produce 80% of the results.

Applying this rule consistently saves you time and energy while producing optimal results. What you want to avoid (and this is where most people are trapped) is applying 80% effort for only 20% return. This means you are essentially spinning your wheels for very little return or benefit; it’s when you feel as if you are taking three steps forward and two steps back!

We could argue with the percentages but it’s not the accuracy of the figures that I want to focus in on, but the principle.

Someone who has taken this principle very seriously, even to the extent of helping him learn foreign languages, is Tim Ferris, the author of one of my favourite books The 4-hour Workweek.

Tim applied the Pareto Principle to his business by asking two questions:

1.     Which 20% of sources are causing me 80% of my problems and unhappiness?

2.     Which 20% of sources are resulting in 80% of my desired outcomes and happiness?

The result? Eye-opening insights ino his business that helped him transform the way he did things. His summary explains how he dealt with fewer and happier clients, doubled his income and worked fewer hours! And this is not an experience that is unique to Tim.

Apply this principle to every aspect of your life to evaluate how you’re spending your time and energy. You might be surprised to learn how counter-productive your habits have been. If you find that you’ve been spending 80% effort for only 20% return, make some changes to flip the stats in your favour.

“There is nothing so useless as doing efficiently that which should not be done at all.”
P. Drucker

Click here to check out The 4-hour Workweek now on amazon.


Wyn Jones


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