Understanding the Pareto Principle: What is it?
The Pareto Principle, also known as the law of least effort, states that 80% of our efforts result in 20% of the outcomes, while 20% of our efforts result in 80% of the outcomes.
The challenge in comprehending this principle lies in its contradiction to our everyday logic. We tend to believe that all factors have approximately equal importance. We reason as follows:
- All workers of a certain category bring approximately equal benefit.
- All clients are equally valuable to us.
- Education obtained from one university is as significant as that obtained from another.
- All problems result from numerous causes, so there's no need to exert effort to identify 3-4 main ones.
- All opportunities are equally valuable, and it doesn't matter which one we choose.
Example:
Let's say we have a task to increase sales by 100%. We have 10 methods at our disposal to achieve this result.
Initially, we utilize 5 of the proposed methods, which is 50%. And, following common perception, we expect to achieve 50% of the results. This is a misconception of 50/50. And we don't achieve those figures.
Try analyzing two indicators: results and utilized methods and resources. You'll be surprised to find a numerical imbalance - 66/26, 75/25, 95/5, 80/20 (the sum doesn't necessarily equal 100).
Only through trial and error, trying one method, then another, then the third - tenth - thirtieth - hundredth, will you discover several of the most productive and beneficial ones.
This way, you'll see which methods and actions lead to greater results and which yield minimal effects. After that, it's just a matter of concentrating your efforts on the most productive tasks and shifting your efforts from the area of low efficiency to the area of high efficiency.
This means doing 2-3-4 important tasks that will lead to the greatest outcome, getting rid of or minimizing tasks that only yield 20% of results or lead to losses.
Reluctance to learn or understand this law stems from an unconscious attempt to justify unfinished business, to find supposedly objective reasons for one's failures.
Example for a deeper understanding:
If wolves attack you, you can heroically shoot and proudly spend all your bullets killing a few wolves and then be eaten alive yourself. But you can spend just one bullet on a concentrated shot at the pack leader, and all the wolves will scatter. That's what the Pareto principle means.
