powerful tool in productivity management which can help you to structure your day better and become more efficient: the Pareto Principle.

Do you ever feel overwhelmed by all the tasks you need to complete and don’t know where to start? Or do you sometimes work for hours without achieving any siginificant progress? You’re not alone – we all have been there. Luckily a lot of techniques have been developed to overcome this struggles. One of them is the Pareto Principle, also known as the 80/20 rule. This technique can help you determine and prioritize your highest-impact tasks, increasing your productivity throughout the day.

What is the Pareto principle?

The Pareto principle states that for many outcomes, roughly 80% of consequences come from 20% of causes. In other words, a small percentage of causes have an outsized effect. This concept is important to understand because it can help you identify which initiatives to prioritize so you can make the most impact.

Where does the Pareto principle come from?

The Pareto principle was developed by Italian economist Vilfredo Pareto in 1896. Pareto observed that 80% of the land in Italy was owned by only 20% of the population. He also witnessed this happening with plants in his garden—20% of his plants were bearing 80% of the fruit. This relationship is best mathematically described as a power law distribution between two quantities, in which a change in one quantity results in a relevant change into the other.

How to use the 80/20 rule

While the 80/20 rule applies to almost every industry, the Pareto principle is commonly used in business and economics. This is because the 80/20 rule is helpful in determining where you can focus your efforts to maximize your output.

The basis of the Pareto principle states that 80% of results come from 20% of actions. If you have any kind of work that can be segmented into smaller portions, the Pareto principle can help you identify what part of that work is the most influential.

Here are a few examples of how to use the tool in practice:

Productivity

You can use the 80/20 rule to prioritize the tasks that you need to get done during the day.

The idea is that out of your entire task list, completing 20% of those tasks will result in 80% of the impact you can create for that day. So in order to get the most impact done, identify which tasks have the most impact for your team and focus on those for the day.

To do this, list out all of the things that you need to get done that day. Then identify which of those tasks have the highest impact. Do any of your tasks involve collaborating with other teammates? Are there any tasks on your plate that are blocking projects from moving forward? These tasks may be simple in execution, but they can make a large impact to the rest of the team by allowing the process to keep flowing.

Decision making

The Pareto principle can help you to make the best decisions during the problem-solving process. When there are many different causes to one problem, the Pareto principle can help you prioritize solutions. Here are a few steps to how this works:

1. Identify the problems that your team is experiencing. These are the problems that you’re trying to find a solution to within this decision making process.
2. Identify the causes of these problems. Try to find all of the causes of the problems you’re trying to solve.
3. Categorize your problems into similar groups. If some of the causes of the problems you’re trying to solve can fall into similar categories, use this as an opportunity to group them together. This can help you decide if one solution can resolve multiple issues.
4. Assign a value to each of these problems based on the impact to the business. The value can be as simple as a number between 1-10, or actual monetary value to indicate the importance.
5. Develop a plan to focus on the top 20% of the problems that impact the business. The idea is that one solution can resolve multiple problems. Based on the values you assigned to each problem, calculate which ones are in the top 20%. Once you’ve identified the main problem, develop a plan to create a solution that can result in 80% of the results using problem-solving strategies.

Imagine you work at an ecommerce company. You take a look at 100 of your most recent customer service complaints, and notice that the bulk of the complaints come from the fact that customers are receiving damaged products. Your team calculates the amount of refunds given for your damaged products and finds that approximately 80% of refunds given were for damaged products. Your company wants to avoid processing refunds for broken products, so you make this problem a priority solution.

Your team decides to update packaging to protect your products during shipping, which resolves the issue of customers receiving damaged products.