The 80-20 Rule (aka Pareto Principle): What It Is, How It Works

The 80-20 Rule (aka Pareto Principle): What It Is, How It Works

Are you trying to get more out of your life? Do you want to make sure that the effort you’re putting in actually pays off? If so, this post will teach you about the 80-20 rule – also known as Pareto principle, a method that helps you get more done in less time.

You can also download our FREE Time Management Workbook to start improving your prioritization and productivity today.

In the morning, when you sit down to start your day, what’s the first thing you do? Most people grab their caffeinated beverage of choice and check their email. Then they prioritize their tasks for the day. But have you ever wondered what techniques other people use to determine which tasks are most important?

One common technique is called the Pareto principle, also known as the 80/20 rule. This technique can help you identify your highest-impact tasks so that you can be more productive throughout the day.

This lesser-known rule offers a way for people looking to understand their lives and their choices more deeply. With its help, we can create better strategies for achieving our goals and unlocking success with surprisingly little effort. The key is understanding how this concept works – and what it means for us personally.

The Pareto principle, also referred to as the 80/20 rule, suggests that approximately 80% of outcomes come from 20% of causes. In other words, a small number of inputs results in a large output. You can use this phenomenon to prioritize tasks and business efforts by allocating more time and energy into the activities that offer the most ROI.

What is the definition of the Pareto Principle, or the 80/20 rule

The Pareto principle, or the 80/20 rule, suggests that for many outcomes, around 80% of effects come from only 20% of causes. In other words, a tiny fraction of causes have an enormous effect. comprehending this idea is key because it can support you in figuring out which projects to focus on so you can create the most impactful change.

What is the history of the Pareto Principle?

In 1896, Italian economist Vilfredo Pareto developed the Pareto principle. He noticed that 80% of the land in Italy was owned by only 20% of the population. He also saw this happening with plants in his garden—20% of his plants were bearing 80% of the fruit. This relationship is best mathematically described as a power law distribution between two quantities, where a change in one quantity causes a relevant change in another quantity.

While the 80/20 rule is not a precise mathematical formula, it’s something that can be seen regularly in economics, business, time management, and sports.

General 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

This phenomenon has a few different names:

  • Pareto principle
  • The 80/20 rule (most common)
  • Law of the vital few
  • Principle of factor sparsity

Understanding How to Apply the Pareto Principle in Your Life

The 80/20 rule, also called the Pareto principle, is used frequently in business and economics. This is because the 80/20 rule assists in discovering where you need to focus your efforts to achieve the greatest output possible.

The foundation of the Pareto principle claims that 80% of outcomes come from 20% of activity. If you have a project that can be divided into sections, the Pareto principle will help identify what part of that work has most significance.

Here are a few examples of how to use the tool in practice.


Did you know that by prioritizing your tasks, you can easily focus on the 20% of task that are actually important? This is leveraging the 80/20 rule to be more productive.

The Pareto Principle suggests that for many phenomena, 80% of the effects come from 20% of the causes. In other words, out of your entire task list, completing just 20% of those tasks will result in 80% of the impact you can create. So to get the most impactful work done possible, identify which tasks will have the biggest impact on your team and focus on those for today.

Get more done each day by identifying which of your tasks have the highest impact. These may be simple to execute, but can make a big difference to your team’s progress by keeping the flow going.

Decision making

The Pareto principle is useful for deciding which solution to choose when you have multiple options. When there are several causes of one problem, the Pareto principle can help you figure out what’s most important. Here’s how it works:

Identify the problems that your team is experiencing.

These are the problems that you’re trying to find a solution to within this decision making process.

Identify the causes of these problems.

Using a tool like the 5 Whys process, find all of the causes of the problems you’re trying to solve.

Categorize your problems into similar groups.

If some of the causes of the problems you’re trying to solve can fall into similar categories, use this as an opportunity to group them together. This can help you decide if one solution can resolve multiple issues.

Assign a value to each of these problems based on the impact to the business.

The value can be as simple as a number between 1-10, or actual monetary value to indicate the importance.

Develop a plan to focus on the top 20% of the problems that impact the business.

The goal is to find one solution that can take care of multiple issues. To do this, calculate which ones are in the top 20% based on the values you assigned to each problem. After finding the primary problem, make a plan to come up with a solution that will account for 80% of the results.

Benefits of using the Pareto principle

The Pareto Principle is an invaluable tool for living life more efficiently and effectively. It can be used to help us prioritize our time, resources and energy in order to get the biggest bang for our buck.

This means that if we focus on honing the right skills or activities, we stand to gain a great deal more than if we spread ourselves too thin without any strategy or planning. We can use this principle to help us reach our goals faster and with less stress by putting our efforts into what truly matters.

By understanding the importance of this rule and implementing it into our daily lives, we’re able to achieve so much more in a shorter amount of time. This also allows us more room for fun pursuits like leisurely activities, relaxation and quality time with friends and family, which are just as important for achieving peace of mind and overall wellbeing.

With the Pareto Principle in mind, all it takes is some thoughtful strategic planning to create balance in both professional and personal areas of life with maximum results!

The 80-20 Rule, also known as the Pareto Principle, is a powerful tool that can help you optimize your life for greater productivity and happiness. It’s a simple concept: 20% of your actions produce 80% of your results. So, if you want to change your life, start by identifying the 20% of activities that are giving you the most results and focus on doing more of those things. Additionally, cut out the activities that aren’t serving you and spend less time on them. Implementing the 80-20 Rule in your life can help you achieve greater balance and satisfaction. If you’re looking for some inspiration to get started improving your productivity, download our FREE Time Management Workbook today.

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