The Rule Of 20% – The Pareto Principle

First, a bit of background theory. There’s a concept called the Pareto principle – which is named after an economist named Vilfredo Pareto, and what this principle tells us is that, in many circumstances, 80% of the effects come from 20% of the causes.

The Pareto principle tells us that you can create more leverage in any endeavour by contemplating which 20% of things in your life or business will generate 80% of the result you want.

Generally speaking, people believe that to be successful they simply have to work harder, but they would be better off evaluating which work activities generate the best results or the 80%.

For example, as a business owner, you can create a list of all your revenue earning activities, then identify which constitute your the activities which generate 80% of your revenue. According to the Pareto principle, this should be approximately 20% of all your activities. At this point, you could choose to stop or pause all those activities that are not part of the 20%.

If you want to apply this principle to your personal life, say to your thoughts and feelings. You could make a list of all the emotions, good and bad, that you commonly experience, then list the thoughts that are associated with each emotion. Finally, identify the 20% of thoughts that contribute to 80% of your good moods and choose to empower yourself by consciously thinking the 20% that generate 80% of good feelings in you!

That’s the Pareto principle in action.

So in your life or business, you gotta really know what are those things that are tied to the big results and ultimately create leverage for you…and that can take some examination and reflection.

The Secret Sauce To Success

I call the 20% the ‘secret sauce’ – because a secret sauce usually has a special ingredient that is only a small part of the recipe, but it’s what makes the sauce a great sauce and that great sauce takes the whole dish to a new level.

So take a moment to reflect on your life and ask yourself: what’s the secret sauce in my life…what are the 20% activities or actions that…

Zoom Out

In order to answer these questions, you might need to zoom out.

In business this may mean you need to conduct a business review by analysing: Who are your top 20% of customers; the biggest selling products; your highest achieving team members; your most useful software applications??

Find the 20% at the end of these questions and focus more energy and time on them, by say, increasingly your knowledge and use of that great software program, focusing more on your favourite and most loyal customers, culling products to the top 20% biggest sellers rather than diversifying more…

What about your personal life? Let’s say we focus on overall life fulfilment.

Zoom out by reflecting on the past month and apply the Pareto Principle: Which things have contributed most to you feeling fulfilled during the past 4 weeks? (If that’s too hard start with the last 7 days.)

Which activities have netted the best result for you? Was it meditation? Reading? Writing? Self-care? A holiday with loved ones? Working with a coach or mentor? Spending time in your garden?

Then zoom out further to the full year? What actions have generated the greatest happiness or fulfilment over the past 12 months? How can you do more of that?

And what less fulfilling things would you need to give up in order to spend more time doing the 20% that brought the most satisfaction??

A Simple Method for Small Business

I’ll share my simple method of applying the Pareto Principle in my life: I use a monthly planner and at the end of each month, I review my goals, my gains, and the things that have brought the most fulfilment and success. I write those down under a heading of “The 20%” and I commit to focusing more on those things by writing some specific goals on the planner page for the next month.

Now it’s your turn to try it. I guarantee this little activity will bring incredible results for you!

To your success and fulfilment,

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