The Pareto Principle

This one simple principle can change everything for you in your life and business if you implement it.  Here’s the principle…

The Pareto Principle (also known as the 80/20 rule) is the observation that most things in life are not distributed equally. Based on this principle, it has been observed that roughly 80% of consequences, or outcomes, come from 20% of causes, or actions. This concept is important to understand because it can help you identify which initiatives to prioritize so you can make the most impact.

Let’s break this down further for better understanding:

The 80/20 rule is not a formal mathematical equation, but more a generalized phenomenon that can be observed in economics, business, time management, and even sports.

High level examples of the Pareto principle:

• 20% of a plant contains 80% of the fruit
• 80% of a company’s profits come from 20% of customers
• 20% of players result in 80% of points scored
• 20% of workers contribute to 80% of results

Real life example of the Pareto’s principle:

I own 28 pairs of shoes and often grab only the top 20% that I love

Here in Miami Beach, there are many routes I can walk to get to one place, but I only walk on 20% of the available routes.

On my smartphone, I have 48 different mobile apps organized in tiles on my home screen, but 80% of the time I’m only using the eight on my home screen (which is about 20%).

By now I think you get it.  Now, how to implement this so that it can be a catalyst to next level growth and success in your life and business….

First, let me share with you why this is so simple yet so hard to implement.

The implementation I am referring to applies to where you are focusing your efforts to maximize your output. Because, as the principle reveals, 80% of our outcomes come from only 20% of our most important actions.  So why wouldn’t we do only those actions that make up our 20% every day?

This is difficult for most people because…

Your current level of success is keeping you from your next level of success.

As humans we are conditioned for routine and comfort, not challenge and disruption.  Even though we tell ourselves we want to work on the big needle moving project, we somehow get stuck in the busyness of everyday life and business that include things like, email, planning, organizing, and consuming other people’s content. 

If you want to begin to use the Pareto Principle to your advantage, here’s how you can get started:

1. Identify your 20%:  Identify the tasks and activities that contribute most significantly to your success. This could involve reviewing past performance, your energetic capacity while doing certain activities (AKA how you feel), customer feedback, and financial data to pinpoint the activities with the highest impact.

2. Plan and prioritize: Once you’ve identified the key activities, prioritize them based on their potential impact on your business goals. Focus on activities that align most closely with your objectives and have the highest potential for delivering results.  Also, identifying the activities that you will no longer be doing is extremely helpful as well.  This way you can delegate and make a list for yourself because we are human, our  mind will try to get us to do “what we’ve always done.” I keep this list of “NOT to-do’s” near my desk and review it daily.  My current 20% consists of only two things: creating or connecting.  If it does not meet those two standards, I delegate or simply do not do the task.

3. Evaluate your 20% each month: Continuously monitor and evaluate your progress to ensure that you’re focusing on the right activities and achieving the desired results. Regularly review your priorities and adjust your approach as needed to stay aligned with your dreams and goals.

The biggest advantage of using the Pareto Principle is that you can create the maximum amount of impact with the least amount of work.  Less burnout, more team clarity, increased strategic focus, enhanced daily productivity and personal fulfillment! 

Lastly, give yourself some grace when implementing this principle in your life – it takes time, effort and adjustment.  But, when you get it, you get it and results will begin to happen quickly!

There was a young man in 1940 that dreamed of attending a prestigious university and becoming a doctor. Growing up in a working-class family, he knew that his family could never afford to send him for this type of education.  At age 12, he discovered that he had a talent for running, and decided to devote himself to the craft so that he could obtain a scholarship.  In 1946 he obtained a full scholarship for his running skills to study medicine at Oxford University.

Even more exciting for him, he made it to the 1948 Olympics running the 1500-meter event and was highly favored to win.  He came in 4th.  He was discouraged – so much so that he spent the next two months deciding if he was going to quit running.  Instead of quitting, he recommitted.  He raised his standards and stepped up his training. Specifically, performing intense daily speed workouts that allowed him to trim his overall pace off his run.  Getting so close to even beating the world record holder for running the mile.  This was literally impossible, in fact it had been stated time and time again even by the best runners that it was impossible.

On May 6, 1954, he stepped onto the Iffley Road Track at Oxford University after finishing his shift at the local teaching hospital where he was working on his studies.  The wind was strong, and it was raining.  Not ideal for a race.  Six men total entered the race, and as this one young man crossed the finish line he collapsed- exhausted.  And then the announcement came over the loudspeaker: “Bannister wins the race and breaks the world record running the mile in 3:59.4!”  On that day he did it.  Roger Bannister broke the mile record, which was previously set at 4 minutes.  

He was an ordinary young man. There was no reason why he should have done anything great. Yet Roger decided to change things and he refused to settle for anything less than beating the 4-minute mile.  He made history.  He’d done what so many believed was impossible.    

Over the next few years, more and more runners attempted and broke the 4-minute mile mark, reframing their reference point of success and realizing it was possible.  Once Roger Bannister proved to himself and the world that it was possible to run a mile in under 4 minutes, suddenly so many other runners were able to do it as well. 

Proving this: Once you stop believing something is impossible, it becomes possible. 

So how does something go from impossible to possible?  

By shifting the reference point of success. 

A reference point of success can be defined as:  a baseline value that individuals use as a benchmark for evaluating and comparing potential outcomes, gains, and losses.

When Roger broke the 4-minute mile record, he didn’t break it by much. He squeaked by with less than a second to spare.

3:59.4

0.6 seconds. Not much, but enough to make a dent in the reference point of success.

Over the last 50 years, the mile record has dropped 17 seconds – each record getting slightly faster than the last.

This only continues to happen because the new runners have a reference point that it is possible. 

Over the years I’ve shifted my reference points multiple times, resulting in many previously “impossible” tasks to be made possible in my life:

Quiet and shy (super scared of speaking publicly) >>> Keynote speaker

Believing “I am not a runner” >>> to running 3 miles with ease

Making $88k per year, year after year (believing $100k+ was unrealistic) >>> making multiple 6 figures

Dreaming of being fit like the women in fitness magazines >>> Achieving 1st place in a bodybuilding show

Over time, I’ve developed the following system to push bast these reference points and achieve the seemingly impossible:

STEP #1: Listen to that still small voice in your that says, “hey… I want you to do this…” 

STEP #2: Prepare to take action.  Start small.  And tell people about it- believe me accountability is needed to push your limits!

STEP #3: Be disciplined.  Celebrate all of your wins, no matter the size- speak them out loud.  

STEP #4: When you get stuck, yes, it’s going to happen… ask for help.  

STEP #5: Achieve the impossible.  Reframe your reference point of success and begin again.

Most people give up, but I know that’s not you.  Oh, and one final note: your previous “impossible”…. It has nothing to do with anyone else.  Life is always improving you.  I will leave you with this quote:

“There is nothing noble in being superior to your fellow man; true nobility is being superior to your former self.” – Ernest Hemmingway

Growing up, when my Dad would show me how to do something it took FOREVER!

Can you relate?

It seemed so gruelingly long to work on a project with him or learn something from him because of the planning and preparation he took in advance of doing the work. When we finally did the work, it was done with so much care and precision it took way longer than I had anticipated. As a kid, I was ready to get to the next thing, most likely playing football in the street with the neighborhood kids or reading my book. I wanted a shortcut to Dad’s projects..

Do you take shortcuts?
Do you actively look for ways to do everything quicker?
What are you missing out on by taking shortcuts in your life?

Society has taught us that everything should be fast, fun, and easy and if it’s not well then, it’s not for us. If you’ve ever given up too easily or counted yourself out, I am sure that you can relate. I am like the millions of others who believed this narrative for years, always rushing through my life to get as much done as possible to get to the next thing that I would then rush through as well.

The truth that was finally revealed to me was this: If you take shortcuts, you get cut short in life. That was like a bomb dropping on me. In my effort to always save time, I was condensing time. I wasn’t making more time or expanding time by taking shortcuts, I was minimizing it. At what cost and for what benefit? The costs were significant, let me name a few:

• Decreased relationships or inability to build quality relationships due to my lack of time, intention, and presence.
• Missing out on seeing the beauty and wonder of our daily life. What did the trees look like when they were blooming in the Spring? How did the snowfall glisten in the sunshine? What did the birds sound like when they first began to sing when the sun rose in the morning? What did the kids’ imaginations sound like when they were playing and laughing quietly?
• Not reaching our full potential. To become a master at any discipline it takes time, it takes reps, it takes the long route- no shortcuts.
• We miss being the storyteller of our lives because we are so busy rushing around we forget we are the main character. It’s like reading the cliff notes version of your all-time favorite novel; you’d miss all the good stuff.

Growing up, when my Dad had me hold the boards to build the fence, but I wasn’t able to use the hammer and drive the nails in, maybe there was a purpose. Maybe he was preparing me for the next project, giving me a job that I could accomplish and be part of the work. Teaching me how to have patience, how to plan and prepare so that the work that I do is precise. No shortcuts, and I would be able to fully experience the pride and celebration of a job well done every time. Looking back I am grateful for these experiences with my Dad. He’s a true testament to living an unrushed life that he enjoys without the shortcuts.

This week, identify one shortcut you’ve been taking that is no longer serving you well, and make a commitment to change it. I think we can all make a commitment to this, because I know for myself, I don’t want to be short changed on the wonders that life has for me. I don’t believe that’s what you want either, so this week identify one shortcut and make a commitment to eliminate it.