Mathematics and sciences were far from my favourite subjects at school (I was more of an arts and languages girl), however, the work of Italian economist Vilfredo Pareto struck a chord. Complex logarithms and equations aren’t my thing but the sheer simplicity of the Pareto Principle was something that I could relate to.
As one of the power laws, the Pareto Principal (also know as the 80/20 rule) states that for many events approximately 80% of the effects come from 20% of the causes. For instance, Pareto’s work looked at economics and wealth distribution and the 80/20 rule still holds true today with the richest 20% of the world's population controlling just over 80% of the world's income.
It is a great rule of thumb that you can apply to all areas of your life, particularly business.
Here are some principles commonly used:
- 80% of your profits come from 20% of your customers
- 80% of your complaints come from 20% of your customers
- 80% of your profits come from 20% of the time you spend
- 80% of your sales come from 20% of your products
- 80% of your sales are made by 20% of your sales staff
Less is often more. Striving for 100% in all areas of your life including your business, all of the time is exhausting and can often be counter-productive. So why not take the time to apply the Pareto Principle to your life and focus on the few things that are really important to you and offer the greater reward?