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. PersonalSuccess SalesSuccess BusinessSuccess LeadershipSuccess The8020Rule–TheParetoPrinciple PersonalSuccess The8020ruleisatriedandtrueprinciplethatcansetyourlifeupforsuccess. Youcanapplyittoanyaspectofyourlife,includingatworkandhome,withfitnessandhealth,relationships,andpersonalprogress. Today,Iwillexplainwhatthe8020ruleis,whyitisalsocalledtheParetoPrinciple,examplesofhowitisusedinreal-lifesituations,andhowyoucanapplyittoyourlifetoachievethesuccessyouarelookingfor. TableofContents Whatisthe8020Rule? 6ParetoPrincipleExamples HowtoApply8020RuletoAnySituation Followthe8020RuleonYourPathtoSuccess Whatisthe8020Rule? 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! BenefitsofUsingthe8020Rule Byapplyingthe8020rule,youcannotonlyhoneinonthethingsthatwillbringyourgreatestsuccessbutalsoidentifythemaincausesofproblemsorlackofprogress. Someadditionalbenefitsofusingthe8020principlesinyourpersonalandprofessionallifeinclude: Greaterproductivity More effectiveleadership  Increased self-confidence  Moreefficientuseofresources Betterproblem-solvingskills Improveddecision-makingskills 6ParetoPrincipleExamples Tounderstandhowthe8020ruleworks,itoftenhelpstoseeitinactioninreallife.HerearesixexamplesofhowyoucanapplytheParetoPrincipletodifferentcircumstances. ParetoPrincipleinTimeManagement Beingbusyisnotthesameasbeingproductive,accordingtoPareto’sprinciple. Entrepreneurs,smallbusinessowners,andself-employedindividualsoftenfeeltheyhavetoworkexcessivehourstoproduceprofitsandavoidworkingforsomeoneelse. Thistypeofbehavioractuallycreatesaskewedwork-lifebalancethatcanbecomeunhealthy,leadtoburnout,decreaseproductivity,andevengiveupongoalsthatonceseemedsoimportant. Toavoidthiscycle,itisbettertoidentifythe20percentoftasksrelatedtocreatingincomethatleadstothehighestpayoff.Thisincludeswhatpayswellnowaswhatwillpayoffthehighestdividendsdowntheroad. Withthetimeyousaveonyourworktasksbyusingthe8020principles,youhavemoretimetodevotetopersonalenrichment,relaxation,exercise,mentalhealth,andrelationshipbuilding. ApplythesameParetoanalysistotheseitems.Identifyyourmostimportantrelationshipstodevotetimeandenergytoandtheactivitiesinyourpersonallifethatbringyouthemosthappinessandgreatesthealth.Maketheseyourdailypriority. ParetoPrincipleinBusinessManagement Whenyoumanageabusiness,team,orproject,itispossiblethat80percentoftheworkthatiscompletedgetsdoneby20percentofthepeopleinvolved. UsetheprinciplesofParetoanalysistodeterminewhoyourmostproductiveworkersare.Taskthemwiththemostimportantitems.Puttheminleadershippositionssotheycanteachothersthesameprinciplestheyfollow. Observeandinterviewtheseteammembers.Identifytheuniquetraits,skills,andhabitstheyhavethatleadtotheirproductivity.Usethisknowledgetotrainotherstaffmembersandthusimprovetheproductivityofyourentireteam. 8020RuleinRelationships The8020rulecanapplyinanumberofdifferentwaystorelationships. Youcanlookattherelationshipsyouhavewithyourgroupoffriends,forexample,anddecidewhich20percentarethebestexamplesandsupporttoyouinbecomingthepersonyouwanttobe.Ifyouspend80percentofyourdowntimewiththis20percent,yourpersonalgainswillbegreater.  ToapplytheParetoPrincipletobuildingagoodrelationshipwithyourspouseorpartner,itmaybehelpfultounderstand80percentoftheproblemsthatcouplesfacearelikelycausedbyasmall20percentoftheiractionsorbehaviors. Inotherwords,youmustidentifytherootcauseorcauses(thesmall20percent)ofyourconflicts,communicateaboutthem,andfocusonimprovingthem.Thisishealthierthangettingcaughtupinthe80percentofbehaviorsthataresimplyminorannoyancesanddonotmatter.  ParetoPrincipleinGoalSetting ThinkingaboutusingtheParetoPrinciplewhenitcomestogoalsetting?Smartchoice! Here’swhatyoushoulddoinordertoeffectivelyapplytheParetoPrincipleto settingSMARTgoalsthatwillboostyouroverallproductivity. First,takeapieceofpaperandwritedowntengoals.Thenaskyourself:Ifyoucouldonlyaccomplishoneofthegoalsonthatlisttoday,whichonegoalwouldhavethegreatestpositiveimpactonyourlife? Thenpickthesecondmostimportantgoal.Whatyou’llfindis,afteryoucompletethisexercise,youwillhavedeterminedthemostimportant20percentofyourgoalsthatwillhelpyoumorethananythingelse. Youshouldcontinuetoworkatthosegoalsthatyou’vechosenasthemostvaluableofalltime. 8020RuleinProblemSolving Problem-solvingisanessentialskill.Youmustbeableto effectivelysolveproblems,bothlargeandsmallbecausetheyareanaturalpartofeveryaspectofourpersonalandprofessionallives. UsethesestepsandkeytoolswhenapplyingtheParetoPrincipletoproblem-solving.YoucanevencreateaParetodiagramtohelpyouvisualizethedetailsoftheproblemandseethepossiblesolutions: Createalistofproblemsyouarefacinginyoursituation. Determinewhatiscausingeachproblem,particularlytherootcause. Giveascoretoeachproblembylistingtheminorderofimportance.Thosethatareimpactingyourprogressthemostarethemostimportantones(the20percent)tosolvefirst. Organizeyourlistofproblemsingroupsaccordingtothosethathavethesamecauses. Addupthescoresineachgroup.Thegroupthathasthehighestscoreisyourhighestpriority. Startbrainstormingsolutionstothisproblemgroupandtakeaction. 8020RuleinSales Afriendofmineisoneofthehighest-paidcommissionprofessionalsintheUnitedStates.Oneofhisgoalswastodoublehisincomeoverthenextthreetofiveyears,soheappliedthe8020ruletohisclientbase. Whathefoundwasthat20percentofhisclientscontributed80percentofhisprofits.Healsofoundthattheamountoftimespentonahigh-profitclientwasprettymuchthesameamountoftimespentonalow-profitclient. Inotherwords,hewasdividinghistimeequallyoverthenumberoftasksthathedoeswhileonly20percentofthoseitemscontributedto80percentofhisresults. Sohedrewalineonhislistofclientsunderthosewhorepresentedthetop20percentandthencalledinotherprofessionalsinhisindustryandverycarefully,politely,andstrategicallyhandedoffthe80percentofhisclientsthatonlyrepresented20percentofhisbusiness. Hethenputtogetheraprofileofhistopclientsandbeganlookinginthemarketplaceexclusivelyforthetypeofclientwhofittheprofile;inotherwords,onewhocouldbecomeamajorprofitcontributortohisorganization,andwhomhe,inturn,couldservewiththelevelofexcellencethathisclientswereaccustomedto.Andinsteadofdoublinghisincomeinthreetofiveyears,hedoubleditinthefirstyearwiththatonesimple timemanagementtechnique! HowtoApply8020RuletoAnySituation Youcanfindsuccessinanyaspectofyourlifebyusingstrategicplanningandapplyingthe8020rule.Anditbeginswithyou dreamingbig. Thereisnothingthatworksfasterincastingoffyourownlimitationsthanforyoutobegindreamingandfantasizingaboutthewonderfulthingsthatyoucanbecome,have,anddo. Asawisemanoncesaid,“Youmustdreambigdreams,foronlybigdreamshavethepowertomovethemindsofmen.”  Whenyoubegintodreambigdreams,yourlevelsofself-esteemandself-confidencewillgoupimmediately.Youwillfeelmorepowerfulaboutyourselfandyourabilitytodealwithwhathappenstoyou.  Thereasonsomanypeopleaccomplishsolittleisthattheyneverallowthemselvestoleanbackandimaginethekindoflifethatispossibleforthem. Stayfocusedonwhatyoureallywant,believeitcanhappen,learnhowtomakeithappen,andgettowork. UnderstandtheTheoryofConstraints ApowerfulprinciplethatyoucanusetodreambigdreamsandlivewithoutlimitsiscontainedinwhatElihuGoldrattcallsthe“TheoryofConstraints.”Thisisoneofthegreatestbreakthroughsinmodernthinking.  WhatGoldratthasfoundisthatineveryprocess,inaccomplishinganygoal,thereisabottleneckorchokecordthatservesasaconstraintontheprocess.  Thisconstraintthensetsthespeedatwhichyouachieveanyparticulargoal. Goldrattfoundifyouconcentrateallofyourcreativeenergiesandattentiononalleviatingtheconstraint,youcanspeeduptheprocessfasterthanbydoinganyothersinglething. Letmegiveyouanexample.  Letussaythatyouwanttodoubleyourincome.Whatisthecriticalconstraintorthelimitingfactorthatholdsyouback?  Well,youknowthatyourincomeisadirectrewardforthequalityandquantityoftheservicesyourendertoyourworld.Whateverfieldyouarein,ifyouwantto doubleyourincome,yousimplyhavetodoublethequalityandquantityofwhatyoudoforthatincome.  Or,youhavetochangeactivitiesandoccupationssothatwhatyouaredoingisworthtwiceasmuch.Butyoumustalwaysaskyourself,“WhatisthecriticalconstraintthatholdsmebackorsetsthespeedonhowfastIdoublemyincome?” IdentifyYourProductivityConstraints Mostpeoplecantypicallyidentifyafewthingsthatstandbetweentheirtimeandtheirgoals.  Sometimestheyarefeelingsofhelplessness.Sometimestheyaresimplyexcuses. Sowhat’sholdingyouback? Isityourlevelofeducationorskill?Isityourcurrentoccupationorjob?Isityourcurrentenvironmentorlevelofhealth?Isitthesituationthatyouareintoday?  Whatissettingthespeedforyoutoachieveyourgoal? Remember,whateveryouhavelearned,youcanunlearn.Whateversituationyouhavegottenyourselfinto,youcangetyourselfoutof.Ifyourrealgoalistodreambigdreamsandtolivewithoutlimits,youcansetthisasyourstandardandcompareeverythingthatyoudoagainstit. LiveWithoutLimits Tolivewithoutlimits,applythreeCs:clarity,competence,andconcentration. ClarifyYourDesires,Goals,andVision Claritymeansthatyouareabsolutelyclearaboutwhoyouare,whatyouwant,andwhereyou’regoing.  You writedownyourgoalsandyoumakeplanstoaccomplishthem.Yousetverycarefulpriorities,andyoudosomethingeverydaytomoveyoutowardyourgoals.  Andthemoreprogressyoumaketowardaccomplishingthingsthatareimportanttoyou,thegreaterself-confidenceandself-beliefyouhave.Andthenthemoreconvincedyoubecomethattherearenolimitsonwhatyoucanachieve. Havingclarityofyourdesiresanda clearvisionforyourfuturewillhelpyoustayfocusedonyourgoalseveryday.Focusingonyourgoalsdailyisactuallyoneofthemostimportanthabitsofsuccessfulpeople. Here’swhy: Goal-orientedpeopletendtohavemoreclarityandmoresuccessinlifethanthosewhodonotsetgoalsregularly.Theyarealsomorelikelytobeinterestedinproductivitytechniques,suchastheParetoPrinciple. DevelopCompetenceinYourKeyAreas Competencemeansthatyoubegintobecomevery,verygoodinthekeyresultareasofyourchosenfield.  Youapplythe8020ruletoeverythingyoudo,andyoufocusonbecomingoutstandinginthe20percentoftasksthatcontributeto80percentofyourresults.  Youdedicateyourselfto personaldevelopmentandcontinuouslearning.Youneverstopgrowing.Yourealizethatexcellenceisamovingtarget.Andyoucommityourselftodosomethingeverydaythatenablesyoutobecomebetterandbetteratdoingthemostimportantthingsinyourfield. ConcentrateonYourMostImportantThing Concentrationis havingtheself-disciplinetoforceyourselftofocussingle-mindedlyononething—themostimportantthing—andstaywithituntilit’scomplete. Thetwokeywordsforsuccesshavealwaysbeenfocusandconcentration. Focusisknowingexactlywhatyouwanttobe,have,anddo.  Concentrationispersevering,withoutdiversionordistraction,inastraightlinetowardaccomplishingthethingsthatcanmakearealdifferenceinyourlife. Whenyouallowyourselftobegintodreambigdreams,creativelyabandontheactivitiesthataretakinguptoomuchofyourtime,andfocusyourinwardenergiesonalleviatingyourmainconstraints,youstarttofeelanincrediblesenseofpowerandconfidence.  Asyoufocusondoingwhatyoulovetodoandbecomingexcellentinthosefewareasthatcanmakearealdifferenceinyourlife,youbegintothinkintermsofpossibilitiesratherthanimpossibilities,andyoumoveeverclosertowardtherealizationofyourfullpotential. Followthe8020RuleonYourPathtoSuccess The8020ruleisasuccessprinciplethatyoucanapplytoanyaspectofyourlife.ByusingtheParetoPrinciple,youfocusonthe20percentofitemsthathelpyouachieve80percentofyoursuccess.  Tohelpyougetstartedonusingthe8020principleingoalsetting—whichisthekeytosuccessatworkandinyourpersonallife—downloadmyfree14-StepGoalSettingGuide. Andremember,Theonlyreallimitationonyourabilitiesisthelevelofyourdesires.Ifyouwantitbadlyenough,therearenolimitsonwhatyoucanachieve. SummaryArticleNameThe8020Rule-TheParetoPrinciple|BrianTracyDescriptionThe8020Rule,alsoknownastheParetoPrinciple,willhelpyouunderstandhowtomaximizeyourproductivity.Learnhowtoapplyittoreachyourgoals!Author BrianTracy PublisherName BrianTracyInternational PublisherLogo «PreviousPostHowtoBeSuccessfulinLife–15HabitstoAdoptToday NextPost»TheImportanceofPublicSpeaking&HowtoDoitWell AboutBrianTracy—Brianisrecognizedasthetopsalestrainingandpersonalsuccessauthorityintheworldtoday.Hehasauthoredmorethan60booksandhasproducedmorethan500audioandvideolearningprogramsonsales,management,businesssuccessandpersonaldevelopment,includingworldwidebestsellerThePsychologyofAchievement.Brian'sgoalistohelpyouachieveyourpersonalandbusinessgoalsfasterandeasierthanyoueverimagined.YoucanfollowhimonTwitter,Facebook,Pinterest,LinkedinandYoutube. 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