80% of your success comes from 20% of your effort

In today’s hyper-active world, running an online business requires a lot of time and effort. Since time is a premium, you should focus your efforts on the tasks that bring in the majority of revenue for your business.

That’s why you should implement the Pareto principle in your life and organization.

The Pareto principle, also known as the 80/20 rule, is a theory maintaining that 80 percent of the output from a given situation or system is determined by 20 percent of the input.

The principle is named after Vilfredo Pareto, an Italian economist. In 1895, Pareto noted that 20 percent of the population in Italy owned 80 percent of the property. He proposed that this ratio could be found in many places in the physical world and theorized it might indicate a natural law.

Here are a few examples of the Pareto principle in action:

• 20 percent of employees produce 80 percent of a company’s results.

• 20 percent of a given employee’s time yields 80 percent of their output.

• 20 percent of software bugs cause 80 percent of the software’s failures.

• 20 percent of a company’s investments produce 80 percent of its investment profits.

  
  

How to use the Pareto principle to set and achieve any goal for yourself

Pareto’s principle can benefit your personal as well as professional life positively. According to this principle: 20 percent of your activities will account for 80 percent of your results. It can change the way you set goals forever.

If you have a list of ten items to accomplish, two of those items will turn out to be worth more than the other eight items put together.

The sad fact is that most people procrastinate on the top 10 or 20 percent of items that are the most valuable and important, the “vital few,” and busy themselves instead with the least important 80 percent, the “trivial many,” that contribute very little to their success.

Here’s what you should do in order to effectively apply the 80/20 rule to goal setting and to your overall productivity.

First, take a piece of paper and write down ten goals. Then ask yourself. If you could only accomplish one of the goals on that list today, which one goal would have the greatest positive impact on your life?

Then pick the second most important goal. What you’ll find is, after you complete this exercise, you will have determined the most important 20 percent of your goals that will help you more than anything else.

You should continue to work at those goals that you’ve chosen as the most valuable all the time.

Eat The Biggest Frog First

You often see people who appear to be busy all day long but seem to accomplish very little. This is because they are busy working on tasks that are of low value while they are procrastinating on the one or two activities that could make a real difference to their companies and to their careers.

The most valuable tasks you can do each day are often the most complex, but the payoff and rewards for completing them can be tremendous.

Before you begin work, always ask yourself, “Is this task in the top 20 percent of my activities or in the bottom 80 percent?”

The rule for this is: resist the temptation to clear up small things first.

If you choose to start your day working on low-value tasks, you will soon develop the habit of always starting and working on low-value tasks.

Work Towards Your Main Goal, All The Time

What is it that separates the successful ones from the others?

A statistic suggested that 85% of successful people have one big goal that they work on all the time.

So, if you want to be successful, do what successful people did. Pick one big goal and work on it all the time, and if you do, it will change your life.

Downsides to the Pareto Principle

Although the Pareto principle offers great advantages. But there are also some downsides of using the principle.

The Pareto charts are very easy to make to show the twenty percent of issues causing the major problems but they don’t show any insight into the causes. Other quality assurance methods are needed to address these areas in a more detailed manner, which may burn a hole in your company’s pocket rather than the issue in the first place.

Pareto charts can only show qualitative data. It just shows how often a problem happens. Because the variability of the chart changes so much it cannot be used to calculate an average or a mean or any other necessary data to calculate statistics. The lack of quantitative data means it’s impossible to check the values shown by the chart.