Understanding the Pareto Principle: How the 80/20 Rule Can Change How You See Productivity This Year!

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Starting the New Year comes with changes we want to happen. It's not wrong to be content with what we have. But if we can improve our performance in the coming year, why not, right?

And with your pursuit of excellence, I introduce a concept that can change how you see productivity this year! It's the Pareto Principle! Watch this video to see how it works: 

 


 

Pareto What?


The Pareto Principle was developed by Business Scholar Joseph Juran and named it after Vilfredo Pareto, an Italian economist who noted that 20 percent of the population in Italy owned 80 percent of the property.

It's also known as the 80-20 rule that states that 80 percent of the results are attributable to 20 percent of the effort given and action taken. It's not only applicable in business but other aspects of life like wealth distribution, daily efforts, and nature.

It's even called the "rule of the vital few and the trivial many". Having said that, what are the implications of the Pareto principle in our careers?

 

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Image Credit: Unsplash


Accepting Life is Not Fair


We may want to think that every person can contribute the same number of output at the same specific time. But this is not the case. We will not get the same value for different people.

In fact, we might not deliver the same value compared to our other competitors. Life is not fair. We should accept that.

With the Pareto Principle, it forces us to find our top 20% strengths and hone that top 20% to differentiate ourselves from the rest. If we accept that life is not fair, we can find our own unfair advantage to be more marketable this year.

 

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Image Credit: Pexels


Prioritize the Top 20% of Your To-Do List


In our freelance business, we might be bombarded with so many things to do. Check our emails. Market ourselves in social media. Draft possible pitches. Sometimes, the list goes borderline endless!

With the Pareto principle, it tells us to focus on the 20% of things that actually matter. I'm not saying you forget the other 80% "that don't matter". I'm just saying you need to put the top 20% priorities first. You need to do well in the most important tasks because it creates 80% of the results.

So for this year, if you want to reach new heights, we must find the important 20% of our to-dos and spend more time on that to create 80% of the results.  

 

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Image Credit: Pexels


Assessing the Risks that Matter


For most would be freelancers and freelancers afraid to tap bigger clients, fear might be the biggest barrier before they enter. Asses yourself, is this even 20% of the risk that actually matter? If not, better jump in.

 

Take Care of the Top 20% of Your Clients


As a freelancer, we might have many clients that we handle. We need to take care of them all. But better take special attention to the top 20% of clients you have. Take time to understand what they are like. In doing this, you will know the 20%'s demographic when you meet them.

 

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Image Credit: Pexels


Don't Completely Forget the 80%


The problem with Pareto is forgetting the 80% as if they are not important at all. I tell you it's not the way to go. Pareto is not a law. It's just a rule for observation. So knowing this, we should think, how can we create more of the 20% from 80%?

If you are a manager, how can you convert some of the 80 %s to the more productive 20%'s? If you have multiple clients, how can you upsell the relatively low paying clients to higher spectrum? Not everyone will be converted. But don't completely forget the 80%.

With that, I hope the Pareto Principle can help you snag your goals for this year and the years to come! Ciao!

 


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