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Pareto principle a.k.a. 20:80 rule

Colleague - “Mandhir I have so many things on the plate that after reaching home I felt frustrated. Off late my work is not becoming meaningful”

Me – “I think the issue here is that you want to dig deeper into the work & give lot of insights. At the same time you want to cover the new work as well, interesting one, unfamiliar challenges. If you have to choose one then which one will you choose? – Breath or Depth?”

Colleague – “But I want to do both”

Me – “Well then you have to be organized and follow Pareto rule”

Colleague – “What is that?”

This conversation prompted me to write a post on this principle.

Vilfredo Federico Damaso Pareto was born in Italy in 1848. One fine day he noticed that 20% of the pea plants in his garden generated 80% of the healthy pea pods. He looked around and found similar asymmetry in terms of output and input. This later became Pareto principle.

One of the mental model I used a lot

In real world, it means –

  • 20% of the input creates 80% of the result
  • 20% of the customers create 80% of the revenue
  • 20% of the people hold 80% of the wealth (or here the gap is even wider)
  • 20% employees create 80% of the company success (If you are in such company maybe think of alternate options as well)
  • 20% of the bugs cause 80% of the crashes
  • 20% of the features cause 80% of the usage
  • And so on...

In our daily world, it means –
  • 20% of task you do will give 80% of appreciation (or chances of getting a hike)
  • 20% of apps will consume 80% of your time
  • 20% of roads are where you will be spending 80% of your time
  • If you are an introvert (like me), you will have 80% of the conversations with 20% of the people
  • In Netflix, 20% of genres will form 80% of your watch list
  • While shopping grocery, 20% of aisles will give 80% of your purchases
  • And so on…

How can you use it?

Professionally depending on your role & responsibility, you can use this rule very effectively

If you are a student –
  • Which 20% of chapters make 80% weightage of marks in exam? – Probably toughest of chapters but most useful in terms of marks
  • Which 20% of topics hold 80% of your interest? – Build your career around those topics

If you are an employee –
  • Identify 20% of work which results 80% of appreciation
  • Identify 20% of work which consumes 80% of your time
  • Make sure bullet # 1 and bullet # 2 become same

If you are a boss –
  • Which 20% of work is giving 80% credibility to your team?
  • Which 20% of the stakeholders appear in 80% of your meetings? – Ask only for their feedback
  • Which 20% of your strategy will give 80% of the profit to the company or to your organization?

If you are an investor –

  • Which 20% of the companies in your portfolio are giving 80% of the benefit? – Invest in those industries only

If you are a freelancer –
  • What 20% of your work will give 80% of your income?
  • Which 20% of your audience view 80% of your content? – They are your true fans who will champion your work

I think you get the idea. I’ll even arguing taking this rule to your personal space as well
  • Which 20% of the people are the source of 80% of your anxiety? – Cut them off
  • Which 20% of the friends support you in 80% of the situations? – Value them
  • Which 20% of the tasks you have to do take 80% of the time? –Automate them
  • Which 20% of things you would love doing 80% of the time? – Whenever time permits, do them
  • Which 20% of the books will you read 80% of the time? – Read and re-read them

Identify the imbalance in your life (personal and professional) – Make best use of that imbalance

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