Tuesday, March 23, 2010

The Pareto Principle

Italian Economist Vilfredo Pareto developed the 8/20 rule in the late 1800's; it suggests that 80% of effects stem from 20% of causes. The most common example used is that 20% of the population control 80% of the wealth; another commonly used business example is that 20% of your clients contribute 80% of your business.

A few Big Idea folks espouse the notion that, if we eliminate the "other" 80% of our daily responsibilities we could focus on the 20% that contribute to much of our productivity and happiness. I am not convinced it's so simple.

If we assume a standard day, there are 16 awake hours and 8 sleep hours (yes, yes, I know - not with MY lifestyle - just go with it). That means that, out of those 16 hours, roughly 3 hours contribute 80% if our happiness and productivity. I find that difficult to believe. If we examine just the standard work day, there are 8 hours (again with the laughing?); 20% is 1.6 hours. If we could truly accomplish 80% of our daily workload in under 2 hours, I suspect more folks would work towards that goal.

I suggest that, when it comes to personal productivity, this Pareto Principle best serves as a reminder to try to focus on the important stuff than as an actual rule of thumb.

What do you think?

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