Application of Pareto Principle at work

The 80-20 rule, or 'Pareto Principle', is based on the idea that a relatively small percentage of any cause (20%) creates most of the subsequent effects (80%).

This applies to pretty much everything related to what you do and in every area of your life.

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The Pareto principle is just that: a principle, a rule of thumb. It doesn't actually believe that 20% of customers produce 80% of your value on the dot. Your top 23% of clients could produce 80%, 60% or even 90% of results. The point of the principle is to realize that certain actions have outsize results, and by focusing on these and making time for the rest of your work afterward, you ensure you're getting the most done.

Vital few and trivial many / Law of the vital few

The 80/20 Rule means that in any set of things (workers, customers, etc.) a few (20 percent) are vital, and many (80 percent) are considered trivial. In Pareto's case, he found that roughly 20 percent of the people in his country dominated with 80 percent of the wealth. In Juran's initial work, he identified 20 percent of product defects causing 80 percent of product problems.  It’s well known by Project Managers that 20 percent of work (usually the first 10 percent and the last 10 percent) consume 80 percent of the time and resources. You can apply the 80/20 Rule to almost anything, from the science of management to the sciences of the physical world around us.

How Pareto’s Principle can Help

The value of the Pareto Principle is in reminding us to stay focused on the “20 percent that matters”. Those tasks in the 20 percent, very likely, will produce 80 percent of the results.  Thus, it’s critical to identify and focus on those things.

And When the fire drills surrounding the “crisis of the day” begin to eat up precious time, remind yourself of the critical 20 percent you need to focus on.  If anything in the list of activities and action items have to be left undone – be sure it isn’t listed in that critical 20 percent.

Furthermore, it’s not only important to do things right, but also to ensure you’re doing the right things.  Pareto's Principle should serve as a reminder to stay focused on investing 80 percent of the time and energy on the 20 percent of work that’s really important.  It’s not just important to “work hard” and “work smart”, but also to work smart on the right things.

How to Apply The 80-20 Rule - Action Exercises

The 80-20 Rule can be applied to work with some of the variations mentioned below:

• The best way is, as is so often, the simplest:

1.  On any given day, identify the tasks that most matter in your work.
2.  Do them with excellence.

         Think 80-20, act 20-80, and supercharge your time management at work!

• Write down all the broad categories of tasks you do at your job. You can make a little table that shows the number of hours spent at each category (say, 1 hr for E-mail, 1 hr for contacting clients, etc.) and on another column write down a value estimate for what percentage you believe it contributes to your productivity. Eliminate, simplify or delegate low %'s and focus on high %'s.

• HBR suggests writing down your top six priorities of the day—and then crossing out the bottom five. Work on the top one for 90-minutes first thing in the morning. Every time you're about to waste time on things like Twitter or checking email, write down what you are about to do (to stop you in your tracks).

• If you have trouble prioritizing your tasks, the Inc. business blog suggests another strategy:

When you make a "to do" list, prioritize each item by the amount of effort required (1 to 10, with 1 being the least amount of effort) and the potential positive results (1 to 10, with 10 being the highest impact.)

Now divide the potential results by the amount of effort to get a "priority" ranking. Do the items with the lowest resulting priority number first. Here's a simple example:

Task 1: Write report on trip meeting.
Effort=10, Result=2, Priority=5

Task 2: Prepare presentation for marketing.
Effort=4, Result=4, Priority=1

Task 3: Call current customer about referral.
Effort=1, Result=10, Priority=0.1

See your new priority-based order? You do Task 3 first, Task 2 second, and Task 1 last–if at all.

This way, you ensure you do those important low-effort tasks that make up 80% of your success.

Identify core of your work & distinguish the most valuable tasks.

Get the most important work done first!

The most important use of the 80/20 rule is defining the “core” of your job. What are the central actions and roles that make up your job? All jobs have a lot of daily to-dos and minor activities, but underneath it all are the central tasks that are most important — the things that cause problems for the company or the customer if they aren’t done. What are the few things that, done right, will mean you’re doing your job well? What does your boss look at when he thinks about the work you’re doing — what numbers matter most to him? What responsibilities? What about your clients and your coworkers?

Use the 80/20 rule to identify your core tasks and make sure you do them with excellence.

The most valuable tasks you can do each day are often the hardest and most complex. But the payoff and rewards for completing these tasks efficiently can be tremendous. For this reason, you must adamantly refuse to work on tasks in the bottom 80% while you still have tasks in the top 20% left to be done. Before you begin work, always ask yourself, “Is this task in the top 20% of my activities or in the bottom 80%?”

Finally, apply the principle to your own day: Is there a time of day you’re most effective? The one hour where you’re wide awake, most energized and undistracted? That’s the time to tackle your toughest, most valuable challenges. If you align the best 20% of your day with the top 20% of your list of work, you’ll get more done in that sprint than most accomplish in a 10-hour day.

Parkinson’s law & Batching

The 80/20 rule coupled with Parkinson's Law & Batching can reduce the amount of time spent on anything.