The 80 20 Rule - The Pareto Principle | Brian Tracy

The Pareto Principle states that 20 percent of your activities will account for 80 percent of your results, however, it is not a hard and fast mathematical law. PersonalSuccessSalesSuccessBusinessSuccessLeadershipSuccessThe8020Rule–TheParetoPrinciplePersonalSuccessThe8020ruleisatriedandtrueprinciplethatcansetyourlifeupforsuccess.Youcanapplyittoanyaspectofyourlife,includingatworkandhome,withfitnessandhealth,relationships,andpersonalprogress.Today,Iwillexplainwhatthe8020ruleis,whyitisalsocalledtheParetoPrinciple,examplesofhowitisusedinreal-lifesituations,andhowyoucanapplyittoyourlifetoachievethesuccessyouarelookingfor.TableofContentsWhatisthe8020Rule?6ParetoPrincipleExamplesHowtoApply8020RuletoAnySituationFollowthe8020RuleonYourPathtoSuccessWhatisthe8020Rule?The8020rule,otherwiseknownastheParetoPrinciple,isoneofthemosthelpfulconceptsforlifeandtimemanagement.TheParetoPrinciplestatesthat20percentofyouractivitieswillaccountfor80percentofyourresults,however,itisnotahardandfastmathematicallaw.Itisaconcept. Thekeytofollowingthe8020ruleistoidentifythatroughly20percentofyouractionsormostproductivetasksleadtothemostsuccess.Thiscanapplytoanyareaofyourprofessionalandpersonallife.HistoryoftheParetoPrinciple Inthelate19thcentury,Italianeconomist,VilfredoPareto,noticedthat80percentofthepeapodharvestfromhisgardencamefrom20percentofhispeaplants.BasedonPareto’sobservation,hethencalculatedthat20percentofthepeopleinItalyowned80percentofthecountry’swealth.ThisdistributionofwealthisanexampleofParetodistribution.ThetermParetoPrinciplewasnotcoinedbyPareto,however,butbyDr.JosephJuran.Inthe1940s,JuranappliedPareto’sobservationstohisfieldofoperationsmanagement.Hehelpedbusinessesimproveproductionbynoting80percentoftheirproductdefectswerecausedbyonly20percentoftheirmethodsusedinproduction.SobyusingthisParetoanalysis,hefocusedonreducingthat20percentofproductionproblemstoincreaseproductionquality.JurancalledthisstrategytheParetoPrinciple,andhealsomadepopularthenotionthatweshouldfocusonthe“vitalfew”andignorethe“trivialmany”tohavethegreatestsuccess. WhyistheParetoPrincipleImportant?Simplyput,theParetoPrinciplehelpsyoudeterminewhichareastofocusyoureffortson.The8020principlehelpsyoudecidewhichresourcesarethemostimportantforyoutousetoachievethegreatestefficiency.Ithelpsreducewastingtime,money,supplies,efforts,emotions,energy,andsoon.Weallwishwehadmoretimeinthedaytoaccomplishthethingswewanttodo.The8020rulehelpsyouweedoutwhatisnotimportantandfocusonthe20percentthatwillhelpyouachievethegreatestsuccessintheleastamountoftime.HowDoesthe8020RuleWork?Itisnotuncommontoseepeoplewhoappeartobebusyalldaylongbutseemtoaccomplishverylittle.Thisisalmostalwaysbecausetheyarebusyworkingontasksthatareoflowvaluewhiletheyareprocrastinatingontheoneortwoactivitiesthatcouldmakearealdifferencetotheircompaniesandtotheircareers.Themostvaluabletasksyoucandoeachdayareoftenthehardestandmostcomplex,butthepayoffandrewardsforcompletingthemcanbetremendous,accordingtotheParetoanalysis.Beforeyoubeginwork,alwaysaskyourself,“Isthistaskinthetop20percentofmyactivitiesorinthebottom80percent?”Theruleforthisis:Resistthetemptationtoclearupsmallthingsfirst.Ifyouchoosetostartyourdayworkingonhigh-valuetasks,youwillsoondevelopthehabitofalwaysstartingandworkingonhigh-valuetasks,sostartyourdayby eatingafrogfirst!BenefitsofUsingthe8020RuleByapplyingthe8020rule,youcannotonlyhoneinonthethingsthatwillbringyourgreatestsuccessbutalsoidentifythemaincausesofproblemsorlackofprogress.Someadditionalbenefitsofusingthe8020principlesinyourpersonalandprofessionallifeinclude:GreaterproductivityMore effectiveleadership Increased self-confidence MoreefficientuseofresourcesBetterproblem-solvingskillsImproveddecision-makingskills6ParetoPrincipleExamplesTounderstandhowthe8020ruleworks,itoftenhelpstoseeitinactioninreallife.HerearesixexamplesofhowyoucanapplytheParetoPrincipletodifferentcircumstances.ParetoPrincipleinTimeManagementBeingbusyisnotthesameasbeingproductive,accordingtoPareto’sprinciple.Entrepreneurs,smallbusinessowners,andself-employedindividualsoftenfeeltheyhavetoworkexcessivehourstoproduceprofitsandavoidworkingforsomeoneelse.Thistypeofbehavioractuallycreatesaskewedwork-lifebalancethatcanbecomeunhealthy,leadtoburnout,decreaseproductivity,andevengiveupongoalsthatonceseemedsoimportant.Toavoidthiscycle,itisbettertoidentifythe20percentoftasksrelatedtocreatingincomethatleadstothehighestpayoff.Thisincludeswhatpayswellnowaswhatwillpayoffthehighestdividendsdowntheroad.Withthetimeyousaveonyourworktasksbyusingthe8020principles,youhavemoretimetodevotetopersonalenrichment,relaxation,exercise,mentalhealth,andrelationshipbuilding.ApplythesameParetoanalysistotheseitems.Identifyyourmostimportantrelationshipstodevotetimeandenergytoandtheactivitiesinyourpersonallifethatbringyouthemosthappinessandgreatesthealth.Maketheseyourdailypriority.ParetoPrincipleinBusinessManagementWhenyoumanageabusiness,team,orproject,itispossiblethat80percentoftheworkthatiscompletedgetsdoneby20percentofthepeopleinvolved.UsetheprinciplesofParetoanalysistodeterminewhoyourmostproductiveworkersare.Taskthemwiththemostimportantitems.Puttheminleadershippositionssotheycanteachothersthesameprinciplestheyfollow.Observeandinterviewtheseteammembers.Identifytheuniquetraits,skills,andhabitstheyhavethatleadtotheirproductivity.Usethisknowledgetotrainotherstaffmembersandthusimprovetheproductivityofyourentireteam.8020RuleinRelationshipsThe8020rulecanapplyinanumberofdifferentwaystorelationships.Youcanlookattherelationshipsyouhavewithyourgroupoffriends,forexample,anddecidewhich20percentarethebestexamplesandsupporttoyouinbecomingthepersonyouwanttobe.Ifyouspend80percentofyourdowntimewiththis20percent,yourpersonalgainswillbegreater. ToapplytheParetoPrincipletobuildingagoodrelationshipwithyourspouseorpartner,itmaybehelpfultounderstand80percentoftheproblemsthatcouplesfacearelikelycausedbyasmall20percentoftheiractionsorbehaviors.Inotherwords,youmustidentifytherootcauseorcauses(thesmall20percent)ofyourconflicts,communicateaboutthem,andfocusonimprovingthem.Thisishealthierthangettingcaughtupinthe80percentofbehaviorsthataresimplyminorannoyancesanddonotmatter. ParetoPrincipleinGoalSettingThinkingaboutusingtheParetoPrinciplewhenitcomestogoalsetting?Smartchoice!Here’swhatyoushoulddoinordertoeffectivelyapplytheParetoPrincipleto settingSMARTgoalsthatwillboostyouroverallproductivity.First,takeapieceofpaperandwritedowntengoals.Thenaskyourself:Ifyoucouldonlyaccomplishoneofthegoalsonthatlisttoday,whichonegoalwouldhavethegreatestpositiveimpactonyourlife?Thenpickthesecondmostimportantgoal.Whatyou’llfindis,afteryoucompletethisexercise,youwillhavedeterminedthemostimportant20percentofyourgoalsthatwillhelpyoumorethananythingelse.Youshouldcontinuetoworkatthosegoalsthatyou’vechosenasthemostvaluableofalltime.8020RuleinProblemSolvingProblem-solvingisanessentialskill.Youmustbeableto effectivelysolveproblems,bothlargeandsmallbecausetheyareanaturalpartofeveryaspectofourpersonalandprofessionallives.UsethesestepsandkeytoolswhenapplyingtheParetoPrincipletoproblem-solving.YoucanevencreateaParetodiagramtohelpyouvisualizethedetailsoftheproblemandseethepossiblesolutions:Createalistofproblemsyouarefacinginyoursituation.Determinewhatiscausingeachproblem,particularlytherootcause.Giveascoretoeachproblembylistingtheminorderofimportance.Thosethatareimpactingyourprogressthemostarethemostimportantones(the20percent)tosolvefirst.Organizeyourlistofproblemsingroupsaccordingtothosethathavethesamecauses.Addupthescoresineachgroup.Thegroupthathasthehighestscoreisyourhighestpriority.Startbrainstormingsolutionstothisproblemgroupandtakeaction.8020RuleinSalesAfriendofmineisoneofthehighest-paidcommissionprofessionalsintheUnitedStates.Oneofhisgoalswastodoublehisincomeoverthenextthreetofiveyears,soheappliedthe8020ruletohisclientbase.Whathefoundwasthat20percentofhisclientscontributed80percentofhisprofits.Healsofoundthattheamountoftimespentonahigh-profitclientwasprettymuchthesameamountoftimespentonalow-profitclient.Inotherwords,hewasdividinghistimeequallyoverthenumberoftasksthathedoeswhileonly20percentofthoseitemscontributedto80percentofhisresults.Sohedrewalineonhislistofclientsunderthosewhorepresentedthetop20percentandthencalledinotherprofessionalsinhisindustryandverycarefully,politely,andstrategicallyhandedoffthe80percentofhisclientsthatonlyrepresented20percentofhisbusiness.Hethenputtogetheraprofileofhistopclientsandbeganlookinginthemarketplaceexclusivelyforthetypeofclientwhofittheprofile;inotherwords,onewhocouldbecomeamajorprofitcontributortohisorganization,andwhomhe,inturn,couldservewiththelevelofexcellencethathisclientswereaccustomedto.Andinsteadofdoublinghisincomeinthreetofiveyears,hedoubleditinthefirstyearwiththatonesimple timemanagementtechnique!HowtoApply8020RuletoAnySituationYoucanfindsuccessinanyaspectofyourlifebyusingstrategicplanningandapplyingthe8020rule.Anditbeginswithyou dreamingbig.Thereisnothingthatworksfasterincastingoffyourownlimitationsthanforyoutobegindreamingandfantasizingaboutthewonderfulthingsthatyoucanbecome,have,anddo.Asawisemanoncesaid,“Youmustdreambigdreams,foronlybigdreamshavethepowertomovethemindsofmen.” Whenyoubegintodreambigdreams,yourlevelsofself-esteemandself-confidencewillgoupimmediately.Youwillfeelmorepowerfulaboutyourselfandyourabilitytodealwithwhathappenstoyou. Thereasonsomanypeopleaccomplishsolittleisthattheyneverallowthemselvestoleanbackandimaginethekindoflifethatispossibleforthem.Stayfocusedonwhatyoureallywant,believeitcanhappen,learnhowtomakeithappen,andgettowork.UnderstandtheTheoryofConstraintsApowerfulprinciplethatyoucanusetodreambigdreamsandlivewithoutlimitsiscontainedinwhatElihuGoldrattcallsthe“TheoryofConstraints.”Thisisoneofthegreatestbreakthroughsinmodernthinking. WhatGoldratthasfoundisthatineveryprocess,inaccomplishinganygoal,thereisabottleneckorchokecordthatservesasaconstraintontheprocess. Thisconstraintthensetsthespeedatwhichyouachieveanyparticulargoal.Goldrattfoundifyouconcentrateallofyourcreativeenergiesandattentiononalleviatingtheconstraint,youcanspeeduptheprocessfasterthanbydoinganyothersinglething.Letmegiveyouanexample. Letussaythatyouwanttodoubleyourincome.Whatisthecriticalconstraintorthelimitingfactorthatholdsyouback? Well,youknowthatyourincomeisadirectrewardforthequalityandquantityoftheservicesyourendertoyourworld.Whateverfieldyouarein,ifyouwantto doubleyourincome,yousimplyhavetodoublethequalityandquantityofwhatyoudoforthatincome. Or,youhavetochangeactivitiesandoccupationssothatwhatyouaredoingisworthtwiceasmuch.Butyoumustalwaysaskyourself,“WhatisthecriticalconstraintthatholdsmebackorsetsthespeedonhowfastIdoublemyincome?”IdentifyYourProductivityConstraintsMostpeoplecantypicallyidentifyafewthingsthatstandbetweentheirtimeandtheirgoals. Sometimestheyarefeelingsofhelplessness.Sometimestheyaresimplyexcuses.Sowhat’sholdingyouback? Isityourlevelofeducationorskill?Isityourcurrentoccupationorjob?Isityourcurrentenvironmentorlevelofhealth?Isitthesituationthatyouareintoday? Whatissettingthespeedforyoutoachieveyourgoal?Remember,whateveryouhavelearned,youcanunlearn.Whateversituationyouhavegottenyourselfinto,youcangetyourselfoutof.Ifyourrealgoalistodreambigdreamsandtolivewithoutlimits,youcansetthisasyourstandardandcompareeverythingthatyoudoagainstit.LiveWithoutLimitsTolivewithoutlimits,applythreeCs:clarity,competence,andconcentration.ClarifyYourDesires,Goals,andVisionClaritymeansthatyouareabsolutelyclearaboutwhoyouare,whatyouwant,andwhereyou’regoing. You writedownyourgoalsandyoumakeplanstoaccomplishthem.Yousetverycarefulpriorities,andyoudosomethingeverydaytomoveyoutowardyourgoals. Andthemoreprogressyoumaketowardaccomplishingthingsthatareimportanttoyou,thegreaterself-confidenceandself-beliefyouhave.Andthenthemoreconvincedyoubecomethattherearenolimitsonwhatyoucanachieve.Havingclarityofyourdesiresanda clearvisionforyourfuturewillhelpyoustayfocusedonyourgoalseveryday.Focusingonyourgoalsdailyisactuallyoneofthemostimportanthabitsofsuccessfulpeople.Here’swhy:Goal-orientedpeopletendtohavemoreclarityandmoresuccessinlifethanthosewhodonotsetgoalsregularly.Theyarealsomorelikelytobeinterestedinproductivitytechniques,suchastheParetoPrinciple.DevelopCompetenceinYourKeyAreasCompetencemeansthatyoubegintobecomevery,verygoodinthekeyresultareasofyourchosenfield. Youapplythe8020ruletoeverythingyoudo,andyoufocusonbecomingoutstandinginthe20percentoftasksthatcontributeto80percentofyourresults. Youdedicateyourselfto personaldevelopmentandcontinuouslearning.Youneverstopgrowing.Yourealizethatexcellenceisamovingtarget.Andyoucommityourselftodosomethingeverydaythatenablesyoutobecomebetterandbetteratdoingthemostimportantthingsinyourfield.ConcentrateonYourMostImportantThingConcentrationis havingtheself-disciplinetoforceyourselftofocussingle-mindedlyononething—themostimportantthing—andstaywithituntilit’scomplete.Thetwokeywordsforsuccesshavealwaysbeenfocusandconcentration.Focusisknowingexactlywhatyouwanttobe,have,anddo. Concentrationispersevering,withoutdiversionordistraction,inastraightlinetowardaccomplishingthethingsthatcanmakearealdifferenceinyourlife.Whenyouallowyourselftobegintodreambigdreams,creativelyabandontheactivitiesthataretakinguptoomuchofyourtime,andfocusyourinwardenergiesonalleviatingyourmainconstraints,youstarttofeelanincrediblesenseofpowerandconfidence. Asyoufocusondoingwhatyoulovetodoandbecomingexcellentinthosefewareasthatcanmakearealdifferenceinyourlife,youbegintothinkintermsofpossibilitiesratherthanimpossibilities,andyoumoveeverclosertowardtherealizationofyourfullpotential.Followthe8020RuleonYourPathtoSuccessThe8020ruleisasuccessprinciplethatyoucanapplytoanyaspectofyourlife.ByusingtheParetoPrinciple,youfocusonthe20percentofitemsthathelpyouachieve80percentofyoursuccess. Tohelpyougetstartedonusingthe8020principleingoalsetting—whichisthekeytosuccessatworkandinyourpersonallife—downloadmyfree14-StepGoalSettingGuide.Andremember,Theonlyreallimitationonyourabilitiesisthelevelofyourdesires.Ifyouwantitbadlyenough,therearenolimitsonwhatyoucanachieve.SummaryArticleNameThe8020Rule-TheParetoPrinciple|BrianTracyDescriptionThe8020Rule,alsoknownastheParetoPrinciple,willhelpyouunderstandhowtomaximizeyourproductivity.Learnhowtoapplyittoreachyourgoals!AuthorBrianTracyPublisherNameBrianTracyInternationalPublisherLogo«PreviousPostHowtoBeSuccessfulinLife–15HabitstoAdoptTodayNextPost»TheImportanceofPublicSpeaking&HowtoDoitWellAboutBrianTracy—Brianisrecognizedasthetopsalestrainingandpersonalsuccessauthorityintheworldtoday.Hehasauthoredmorethan60booksandhasproducedmorethan500audioandvideolearningprogramsonsales,management,businesssuccessandpersonaldevelopment,includingworldwidebestsellerThePsychologyofAchievement.Brian'sgoalistohelpyouachieveyourpersonalandbusinessgoalsfasterandeasierthanyoueverimagined.YoucanfollowhimonTwitter,Facebook,Pinterest,LinkedinandYoutube.InstagramTwitterFacebookPinterestLinkedinYoutubeMostRecentPopularFreeDailyHabitsofHighlySuccessfulPeopleWriter’sBlock:HowToDefeatAnAuthor'sWorstEnemySelf-DisciplineHabitsToImproveYourLifeHowToImproveYourProblem-SolvingSkills-A10StepGuideThePowerOfPositiveThinkingFreeWebinar:HowToWriteaBookandBecomeaPublishedAuthorFreeVideoSeries:3-PartSalesMasteryTrainingSeriesFreeAssessment:TheConfidenceFactorFreeAssessment:DiscoveringYourTale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