Hard Smart Work: Pareto Principle (80/20 Rule)
Do you ever wonder sometimes why 24 hours isn’t enough to get your job done? The problem is on the tight deadline, massive workloads, or….. yourself?
Well, maybe you need to try the Pareto Principle or the 80/20 rule. What is the 80/20 rule? In short, 20% of the effort you put in can produce 80% of the results you get. So, just focus on the most important things!
What is the Pareto Principle?
The Pareto Principle was first discovered by an Italian economist, Vilfredo Pareto around the end of the 19th century. He saw that around 80% of the wealth in Italy was owned by 20% of the population. From there, he got the idea that often 80% of the results obtained came from 20% of the efforts made. We can feel this pattern in various things, such as in our work & productivity.
Implementation of the Pareto Principle in the Workplace
1. Task and Time Management
One of the main difficulties in work is usually determining what is more important. Often we have tried to do many things at once (multitasking), but the results are less than optimal. With this Pareto principle, we can focus more on about 20% of the most important things, because they can have the greatest influence of about 80%.
Example: Instead of spending 8 hours answering emails, you can focus more on several important emails from clients that can produce better benefits.
2. Team and Individual Productivity
In a team, sometimes most of the results come from a few people. In a company, managers must be able to manage resources better and better support the things that have the most influence.
For Example: Creators ID Team achieve 80% OKR that comes from 7 people with the highest GMV achieved by 2 people. The manager gives the reward, even as simple as a Good Job Card to appreciate and motivate the highest GMV achiever. For the rest, the manager gives the special training to help them tackle the obstacles they face.
3. Project Management
In a large project, there must be many clients and employees involved. The Pareto principle can help us see, approximately 20% of which parts are most likely to cause 80% of problems or delays. So, we can focus on handling the most important things first. For instance, mostly obstacles in launching a digital campaign come from producing content, so the team’s focus must be directed there first.
4. Decision Making
In daily life or in work, you are needed in decision making. To make the best decision requires careful consideration based on data and results. Both of these things can give you things to improve (Do’s) and what to avoid (Don’t’s). The focus is on making big-impact decisions in a short period of time, rather than solving all the little things at once.
Example: On a daily work life, there’ll always be issues whether on Client’s part or the team’s part. Of course we need to solve all the obstacles but we need to prioritize the major issues that have direct impact, especially on the Client’s satisfaction.
5. Client or Customer Relationships
Lots of businesses find out that mostly their revenue comes from a small number of customers. Identifying key customers and providing them with extra service can have a huge impact on business growth.
Example:
80% of an agency’s revenue may come from 3 out of 15 active clients. So it is important to maintain intensive relationships and communication with these priority clients.
Benefits of Applying the Pareto Principle:
✅ We should know what is important so become more focused on what we do
✅ Sometimes only 20% of our time that can generate 80% of the result, so work smarter and save more time
✅ Try to think with data and the impact, not just follow your habit to make decisions faster
✅ Work becomes more enthusiastic: If the results are greater than the focused effort, you will definitely be more satisfied and feel successful.
✅ Business is getting more advanced: For companies, it can help focus on the most potential products or clients.
Challenges in Applying the Pareto Principle
Implementation of Pareto principle might seem simple, but actually it has some difficulties such as:
*Difficulty in Determining the Top 20% It takes objective analysis and assessment to know which tasks, clients, or activities have the greatest impact.
- The Desire to Complete Every Task: Many individuals feel uneasy when minor tasks are left incomplete, even though handling them can consume time and energy better devoted to more significant priorities.
- Lack of Data or Information In order for this principle to be applied properly, we need sufficient data so that decisions are based on facts, not estimates.
The Pareto Principle teaches us that not all things are created equal. In work, there are things that have a much greater impact. By recognizing and focusing on these, we can achieve greater results, faster, and with more efficient energy.
Conclusion:
Working productively is important to maximize the time you have at work, so you don’t have to stay overtime at the office. The Pareto Principle gives a perfect explanation to focus 20% on our best effort that will maximize the 80% of the results. By identifying and prioritizing the most impactful tasks or activities, we can work smarter and more efficiently, instead of just working harder without a clear focus. In the end, this method will save more time and energy while achieving the best results.
Important note: This method teaches us to prioritize and be mindful of the things that have a big impact, while still keeping the eye on small things (not ignoring it). It’s not rocket science to choose to work smarter or just being harder.
