I am sure you have heard about this principle discovered by Vilfredo Pareto. Maybe you don’t recognize his name, and maybe you don’t even remember what the Pareto principle is all about. But I’m sure you’ll remember it once I’ve told you its other name.
The Pareto principle is also known as the 80/20 rule!
Who was Vilfredo Pareto?
Vilfredo Pareto was an Italian engineer, economist, and sociologist. He was born in Paris in 1848 under the name of Wilfried Fritz Pareto.
During his analysis of the national wealth of Italy, he made a very interesting discovery. He found out that about 20% of the citizens owned 80% of the country’s assets. From the productivity point of view, that meant it was beneficial for banks to take care of those 20% first. The banks could generate much higher profits when they concentrated on this target audience first.
Since that time, further studies have shown that this statistical phenomenon can be found in a lot of different areas.
What is the Pareto principle all about?
Vilfredo Pareto’s insights can be summed up as follows:
80% of the results can be accomplished by 20% of efforts—also in matter of the time invested.
If you want to become more efficient and productive in your business, I recommend analyzing your work according to the 80-20 rule. Take your time. Put all your emotions aside and try to analyze every area of your life and business.
The following questions might help you to achieve some quick results:
- What 20% of your customers/events cause 80% of your problems?
- What 20% of the actions you take are responsible for 80% of the desired outcome?
- What 20% of your customers are responsible for 80% of your revenue?
- What 20% of your actions cost you 80% of your time?
By applying the 80/20 rule, you can analyze any area of your life, business or private.
How can you benefit from the Pareto principle?
I am absolutely convinced that, through the application of Vilfredo Pareto’s principle to your daily life, you can eliminate things that consume a lot of time but don’t deliver real results.
Take this opportunity to analyze your whole environment. Include anything in your analysis: friends, customers, business partners, spare-time activities, and any other important part of your life.
The goal of applying the Pareto principle is to identify and eliminate those things that consume a lot of time in relation to the results they deliver.
I hope this post inspired you to find out what the Pareto principle can do for YOU.
Yours in Mastery
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