The story: Pareto picking peas from pods

In 1896, Vilfredo Pareto was picking peas in his garden when he noticed that some pea pods had more peas in than others. He counted the peas in each pea pod and noted that 80% of the peas came from 20% of the pods. As an economist, he tested this observation further by looking at wealth and land distribution in Italy and discovered that 80% of Italy’s land was owned by 20% of the population.

What is the Pareto principle?

Today this 80/20 pattern, known as Pareto principle in his honour, is seen everywhere. It’s important to note that it isn’t always exactly 80/20; the principle teaches us that the majority of the outputs/outcomes are created by a ‘vital few’ things. For example:

• 80% of your income will be spent on 20% of your things (mortgage, food etc)
• 80% of your work will come from 20% of your customers
• In the charity world 80% of your donations will come from 20% of your supporters.

How to use the Pareto principle for your productivity

Also, have you noticed that 20% of tasks take up 80% of your time at work? Applying efficiencies to those tasks can have an enormous impact on your productivity.

You can use this principle in the real world by identifying the vital few and focusing your efforts there. If you need to reduce costs, then focus on the 20% of things that cost you 80% of your budget. If you need to improve customer experience, then focus on the 20% of services that account for 80% of your customer interactions. Focusing on the vital few will ensure you get the greatest impact for your efforts.