Understanding the Pareto Principle (The 80/20 Rule) - Deepstash

Understanding the importance of decision-making

Identifying biases that affect decision-making

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## History Of Pareto Principle.

The Pareto Principle referred to the observation that 80% of Italyâ€™s wealth belonged to only 20% of the population.

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## Pareto Principle is the observation, not law.

It can mean all of the following things:

• 20% of the input creates 80% of the result.
• 20% of the workers produce 80% of the result.
• 20% of the customers create 80% of the revenue.

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## But First, Donâ€™t Get Twisted.

Thereâ€™s a common misconception that the numbers 20 and 80 must add to 100 â€” they donâ€™t!

• 20% of the workers could create 10% of the result. Or 50%. Or 80%. Or 99%, or even 100%.
• In a group of 100 workers, 20 could do all the work while the other 80 goof off. In that case, 20% of the workers did 100% of the work.

Remember that the 80/20 rule is a rough guide aboutÂ typical distributions.

The key point is thatÂ most things in life (effort, reward, output) are not distributed evenly â€” some contribute more than others.

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## So Why Is This Useful?

The Pareto Principle helps you realize that the majority of results come from a minority of inputs.

The point is to realize that you can often focus your effort on the 20% that makes a difference, instead of the 80% that doesnâ€™t add much.

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## This may not be the best strategy in every case

The point of the Pareto principle is toÂ recognize that most things in life are not distributed evenly.

Make decisions on allocating time, resources and effort based on this:

• Instead of spending 1 hour drafting a paper youâ€™re not sure is needed, spend 10 minutes thinking of ideas. Then spend 50 minutes writing about the best one.
• Instead of agonizing 3 hours on a single design, make 6 layouts (30 minutes each) and pick your favorite.

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## When you are seeking top quality, you need all 100%!

It may be true that 80% of the Mona Lisa was painted in the first 20% of the time, but it wouldnâ€™t be the masterpiece it is without all the details.

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CURATED BY

A junior reader who enjoy topics that advocate for self-improvement. Also a proponent of healthy living and mindfulness (still learning). Letâ€™s connect and explore the world of books together!

# CURATOR'S NOTE

Time management and making priorities might be painful and these might be blockers to your success. The Pareto Principle might give you the refreshers as a new perspective.

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