The Pareto Principle explained
The Pareto principle (also the 80:20 rule) is simple and effective at same time. Photo: iStock.com/marekuliasz.

Pareto principle explained: The 80/20 Effect

The Pareto principle (also the 80:20 rule) can help you to find time wasters in your planning and to become more productive. Here you find the pareto principle explained by some interesting examples.

The Pareto principle, named after Vilfredo Pareto , is also known as 80/20 rule, which we regularly encounter in everyday life. It states that 80% (the majority) of the results are achieved with 20% of the total effort. The remaining 20% of the results need 80% of the time.

Pareto came to this conclusion when he found out that 80% of Italian lands belong to just 20% of the population.

Of course, it’s not always exactly 80 and 20 percent, but that’s not the point. The idea of the Pareto effect is rather the statistical phenomenon that often a small number (a minority) is responsible for a disproportionately large result, while the majority contributes only a small part.

Pareto Principle Examples

The best known example of the Pareto Principle or the 80/20 rule concerns the distribution of money . It’s well known that around 20% of the world’s population owns about 80% of the total assets in circulation. The remaining 20% of the money is distributed over the remaining 80% of the world’s population.

Explanation of the Pareto effect
Often, 20% of customers are responsible for 80% of sales.

Another example is often found in the distribution of sales to the customers of a company. Here, it can be observed that the majority of sales is often generated by a few (big) clients. The the rest of the clients only provide a marginal share of sales.

Similarly, in companies, a small percentage of workers usually spend the majority of sick days. The most workers have few sick days.

In private life you can also find an example, which you certainly know. Mostly we only wear a few of the garments that we own regularly. The majority of the garments are rarely or not worn by us for years.

On the Internet, a small percentage of very well-known web pages (Google, Instagram, etc.) generate the most data traffic. The most of the web pages is responsible for a very small portion of traffic.

Use the Pareto principle for yourself

Reflecting on your everyday life, this knowledge can serve you well once you have internalized it. After all, we also like to waste 80% of our time on relatively unimportant things, while our biggest results during the day often do not take much time.

Using time more effectively with the 80:20 rule.
Wenn Sie das Pareto-Prinzip kennen, konzentrieren Sie sich auf die wichtigeren Dinge.

The famous Frank Bettger, an independent salesman, once wrote in one of his books: “I found out that I spent 80% of my appointments with clients who then accounted for just 20% of my sales.” Following this realization, he made sure not to give too much time to this clientele. Instead he focused on the interesting ones among them.

Sure, 20% is also a part of the success. But the problem is that the time we spend on it can be better used. If you have the choice to earn 20 $ or 50 $ per hour, you will probably opt for 50 $. And yet you often give away the chance for more because you are dealing with less important things.

It is therefore important that you set priorities for yourself. Our practical time planners and to-do lists help you plan your time effectively.

Critical consideration of Pareto principle

For a long time, the Pareto principle was generally valid for all topics of time management. That’s certainly not the case. There are also jobs and activities where the small part is just as important as the big one, even if it does not produce such great results.

But what you can ask yourself more often with the knowledge of the Pareto principle is whether there may be time-wasters in your life that, strictly speaking, produce few results:

  • As a perfectionist, if you have done the actual task quickly, but then spend twice as long to perfect it again (without receiving more)
  • As a self-employed salesman, if you spend most of your time organizing yourself and only using the little time left to sell and make money.

In a nutshell

Figure out which activities will bring you closer to your goal (whether professional, business or physical). Face the activities that are time consuming, but that will take you little or no distance (except in private life, of course).

Check if you spend most of your time with these important things right now. If that isn’t the case, think about whether you want to give the unimportant things less time in the future.

If you know potential time wasters in your everyday life, you can effectively increase your productivity. You’ll soon realize how this change in focus will help you on your way to success.