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Article rating : 0.00, 0 votes. Author : Tony Atherton
The Pareto Principle is known by many names and seems to be an almost intrinsic law of nature. Amongst its other names two in particular pinpoint what it is about: the law of imbalance and the 80/20 rule.
The principle can be expressed in many ways and has been used in an enormous variety of circumstances. In time management terms it reminds us that there is a great imbalance between effort and results. If we just do what everyone else wants us to do, if we do not prioritise well, then around 80% of what we achieve will come from just 20% of what we do -- the 80/20 principle.
It’s like saying that in the equivalent of just one day a week we achieve the bulk of what we do that is really important. The other four days merely add a bit more. It’s an appalling statistic but, generally, it has a big core of truth.
Look at it another way and say that only a crucial few things are really important, the majority are not. So where should you invest the bulk of your time, on the crucial few or the less important many?
This fact of a natural imbalance is all around us, but we do not have to tolerate it. In practice, if you are being reasonably successful at work you are probably already instinctively beating the Pareto principle. But, with some thought, you can probably improve much, much more.
So who was Pareto and what did he discover that was worth attaching the word ‘principle’ to?
Vilfredo Pareto (1848-1923) was an Italian economist. In 1897 he studied the distribution of wealth in England and found that, not all that surprisingly, relatively few families owned a disproportionate amount of the wealth of the country. There was an imbalance.
Specifically, he discovered that about 20% of families owned about 80% of the wealth. He then found that half of those owned roughly 64% of the wealth (80% of 80%) and half of those owned roughly 50% (80% of 64%). A very unequal distribution! He even found that this appeared to be universal in whatever country or age he looked. The 80/20 rule was born.
The Pareto principle seems to be endemic. Other examples often quoted include: about 80% of the wear in your carpets at home is in roughly 20% of the floor area (the doorways and corridors); 20% of criminals commit 80% of crime; 20% of staff cause 80% of personnel problems and so on.
Often it is more extreme than 80/20. In a football match the action that matters (scoring goals) occurs in a tiny fraction of the game. When a match goes to a penalty shoot out after extra
time the outcome is decided by just ten kicks taken in a few minutes of melodrama after a game in which the ball has been booted around for 120 minutes. (That must be a 99.9/0.1 rule!)
In a light bulb only a few percent of the electricity used is converted into light, the rest is wasted as heat (95/5 rule). Publishers say that only a few percent of books make a profit, those that do subsidise the rest. The same probably applies to pop records. You could go on, but instead of piling up more examples, let us turn to using the rule to help us to get better use of our limited time.
Once you accept that the productivity of your time is unbalanced you are part way to doing something about it. As usual in time management, we come back to priorities. Reduce time spent on the wasteful many and give more time to the crucial few.
Every moment you spend on tasks of low importance, whilst higher importance tasks are waiting, you reinforce the 80/20 rule of shame. Whereas every time you drop a low-importance task to make way for something more important then you are smashing the 80/20 rule and making your way to higher productivity.
Of course, you are not aiming for 100/100, where every single moment is fully accountable and totally productive. You are not a machine. For example, if your organisation is to move forward then some time must be spent speculating on what ifs. That is good use of your time, even though 80% or more of it will eventually lead to nothing, but maybe 20% will.
Be aware of the reality of the 80/20 principle. Do not feel guilty about it but use it sensibly, not blindly, to help you to judge priorities and to judge if you are using your time as well as you might. It can help you to make a difference and help you to improve your productivity. That is no bad thing.
Author: Tony Atherton
© Tony Atherton 2005)
For an in-depth look at the Pareto Principle see ‘The 80/20 Principle,’ by Richard Koch, Nicholas Brealey, London, 1998. ISBN 1-65788-168-0.
About the author:
Tony Atherton is a freelance trainer and writer based in England. He has had four books published and about 90 of his articles have appeared in various magazines and journals. After an earlier career in industry he now runs in-company training courses in business writing, report writing (including technical reports) and taking minutes, as well as negotiation skills and time management. Over 6000 delegates have attended his courses. For details of his time management courses see http://tony-atherton.co.uk/timemgt.htm or for general details see http://www.tony-atherton.co.uk.
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