7 steps to unleash the power of the 80/20 rule

The Pareto principle, more commonly known as the 80/20 rule or the Law of the vital few, states that there’s a vital minority of causes that are responsible for the majority of results. Pareto initially observed this with the distribution of wealth in Italy, but in the 1960’s Juran introduced the principle in the field of quality control in Japan, after which it became known in the business world. Richard Koch later wrote three books about the concept, applying the principle to entrepreneurship and other areas of life.

There are two distinct problems with the 80/20 rule, when people first start applying it to their life.

Problem #1: focus on effort
The rule initially inspires people to focus on efforts! Which is not really surprising, since a lot of people immediately turn the expression around and think “So 80% of my effort only gives me 20% of the results? Man, I gotta stop doing that part!”.

The focus on effort comes from the notion that our time is scarce and we want to spend that time the best way we can. The rule points out that we are “wasting” that time and that’s something people want to (re)act upon. If we only resort to stopping the effort that is not giving a lot of result, we will end up with less results.

Problem #2: you can’t change the rule
A lot of people have a hidden assumption that strengthens problem #1. The assumption: By eliminating the 80% low-result effort, we have eliminated all low-result effort and end up with only high-result effort. This is not true. The 80/20 rule will always be valid. So if you have eliminated the 80% that wasn’t producing enough results, you can start the analysis all over again, and identify another 80% that only accounts for 20% of the results.

So focus on the results!
Did you recognize the downward spiral of results? That’s not good, now is it? We want more results not less! Apply Covey’s habit 2: Begin with the end in mind. What is it that you want? What results are you aiming for? Only if you know what you want, will you be able to use the 80/20 rule effectively.

Here’s a 7 step action plan to unleash the power of the 80/20 rule:

1. There is not only one result area
   This is an important one. There are several areas in your life where you get results. Like financial results, social results, health results, family results and so on. Usually we don’t call them results, but in effect they are.
2. 100% of your effort accounts for 100% of your results
   This looks like an open door, but this is true and a lot of people seem not accept this one. You are responsible for the results you are getting. Cool huh? But, this may hurt a little, you are also responsible for the negative results you are getting and, this may hurt even more, you are also very responsible for the results you are NOT getting.
3. Identify the unwanted results, then identify the associated effort
   Make a list of all the results that you get, and identify the ones you don’t really want. These are the negative results, and the results you don’t really need. Identify all the effort associated with those results, and eliminate them. This will leave you with more time for the results you do want.
4. Identify the desirable results and rank them in order of importance
   Take the list from the previous step, and identify the results that you do want. Rank them in importance to get a top 10 list. Identify the result areas where you want to increase the total result.You will end up with a list ordered in importance and marked whether you are satisfied with the current level of results or not. Not that would be helpful, right?
5. Analyze the effort for a high importance result that you want to improve
   Now is the time to take the 80/20 rule to its full effect. Look at all the effort you put in getting the desired result. What effort is contributing the most and what is contributing the least? Make a plan how to eliminate the latter and increase the high contribution effort.
6. Action!
   Preparation is over! Go forth and start executing your plan.
7. Evaluate and start over again
   Do this for a month, and evaluate your progress. Go to step 1 and add results and efforts to the list. You will encounter undiscovered ones during the first couple of months. Then redo every step. If you do this every month, you will see major improvements in the result areas that are most important to you.

If there is one thing to make sure that you use the power, I would say “Focus on the results”. If anything, please focus on the results. But don’t forget to enjoy your journey to those results along the way.

If you want to read more, I recommend The 80/20 Individual: How to Build on the 20% of What You do Best, the other books are good as well, but the basic message is the same.