If asked to name just three people who have significantly influenced the way I manage my daily workloads, and indeed my commercial life, I would have no hesitation – not even a pause for breath – in reeling off: Steven Covey, Ivy Lee, and good old Vilfredo Pareto.

Covey, most of you will have heard of, and is the man responsible for providing me with an epiphany – not quite of Damascus highway proportions, but it was certainly up there.

Ivy Lee was far less famous, but nevertheless his $25,000 system that he sold to Lee Iacocca, has given me a thirteenth month every year. I may even share more with you very soon.

Today is about someone very close to my heart. Even though we never met, and he was born just a couple of years after me (kidding) I feel we would have been good chums; here he is …. just a very brief history lesson first.

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth.

In the late 1940s, Dr.Joseph M.Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto’s Principle. While it may be misnamed, Pareto’s Principle or Pareto’s Law as it is sometimes called can be a very effective tool to help you manage effectively.
 
What It Means
The 80/20 Rule means that in anything a few (20 percent) are vital and many (80 percent) are trivial. In Pareto’s case it meant 20 percent of the people owned 80 percent of the wealth. In Juran’s initial work he identified 20 percent of the defects causing 80 percent of the problems. Project Managers know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of your time and resources. You can apply the 80/20 Rule to almost anything, from the science of management to the physical world.

You know 20 percent of your stock takes up 80 percent of your warehouse space and that 80 percent of your stock comes from 20 percent of your suppliers. Also 80 percent of your sales will come from 20 percent of your sales staff. 20 percent of your staff will cause 80 percent of your problems, but another 20 percent of your staff will provide 80 percent of your production. It works both ways.
 
How It Can Help You
The value of the Pareto Principle for a manager is that it reminds you to focus on the 20 percent that matters. Of the things you do during your day, only 20 percent really matter. Those 20 percent produce 80 percent of your results. Identify and focus on those things. When the fire drills of the day begin to sap your time, remind yourself of the 20 percent you need to focus on. If something in the schedule has to slip, if something isn’t going to get done, make sure it’s not part of that 20 percent.

There is a management theory floating around at the moment that proposes to interpret Pareto’s Principle in such a way as to produce what is called Superstar Management. The theory’s supporters claim that since 20 percent of your people produce 80 percent of your results you should focus your limited time on managing only that 20 percent, the superstars.

The theory is flawed, because it overlooks the fact that 80 percent of your time should be spent doing what is really important. Helping the good become better is a better use of your time than helping the great become terrific.

Apply the Pareto Principle to all you do, but use it wisely.

Pareto’s Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of you work that is really important.

Don’t just “work smart,” work smart on the right things! Anyone can be a “busy fool”

Final word: You will enjoy just 20% of the blog posts you read today – I do hope this was one of them!

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