Pareto’s Powerful Principle

Everyone knows about the 80:20 ratio. But how many people exploit it effectively in their own lives? And how many people believe that the ‘Law of the Vital Few’ should be adopted by all of us? I imagine that Pareto’s principle is anathema to socialists because of the high degree of inequality that it represents.

The Knot Garden is not, however, concerned with the murky business of politics but is instead very much interested in productivity. And I was reminded yesterday, on revisiting Gary Keller’s influential book The One Thing, that the Pareto principle, named by quality icon Joseph Duran after the nineteenth century economist who extrapolated an observation of pea pods in his garden to wealth distribution patterns, can be a powerful tool when applied to business efficiency.

One characteristic of the rule is its apparent universality. We see it at work in all fields of human endeavour. But whereas the golden section phi is a precise number with particular arithmetic and geometric properties, the eighty twenty ratio is a rough and ready guide, intended only to give a sense of the level of disproportionality at work.

Rather than being a mathematical phenomenon, the Pareto principle is nothing more that an observation on cause and effect – albeit a profound one. It asserts marked inequality in size between a scenario’s various inputs and their associated outputs. Hence the idea that “20% of the causes are responsible for 80% of the effects”. The implications of this are obvious.

None of the afore-going really matters much unless we can harness the power of the principle to gain some advantage in our lives. In seeking to do so, we should not restrict its application merely to business but should spread our net far wider.

Ultimately the Pareto principle is a time management device. If we can concentrate most of our effort on the things that give a comparatively high return for the investment of time, we can achieve our goals far more quickly. Or, more to the point in today’s hectic world, we can achieve much more with the limited time at our disposal.

How can we apply the principle practically? We can assess the relative cost and value of each task we contemplate before deciding to perform it. This allows us to choose the tasks that are most worthwhile and reduce the amount of time we waste on the others. This process teaches us to value our time more highly and critically examine the uses to which it is put.

The Knot Garden considers Pareto’s principle an important weapon in its productivity armoury. One that, perversely, provides an opportunity to embrace inequality in order to improve our lives. And those of others too. Perhaps a zen practitioner might see this as an enlightened  path to equality but we will take a more pragmatic view.

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