The Pareto Principle and the Power of the 80/20 Rule

Masterplan Team

Thumbnail: Pareto Principle
VIDEO With english subtitles

You’ve already put in 4 days of the week into a project and you still feel like you're not getting anywhere? Here’s how the Pareto principle can help you. Also known as the 80/20 rule, this method shows you how to prioritize tasks in order to achieve more with less effort.

What Is the Pareto Principle?

Imagine you could complete the majority of a task with only a fraction of the required effort. Sounds too good to be true? Think again!

The Pareto principle, also known as the 80/20 rule, explains that 80% of a desired result can be achieved with only 20% of the total effort. Conversely, 80% of the work is needed to achieve the remaining 20% of the results.

Put another way: A few things you do (20%) can already bring you the majority of your successes (80%).

Graphic: Pareto Principle

In Everyday Life: Why Is the 80/20 Rule so Fascinating?

Once you have understood the basic idea, you will be amazed at how often you have to deal with the Pareto principle on a daily basis. In addition to its effectiveness, the fascination also lies in its simplicity. The principle can be applied everywhere, such as when cleaning your house or organizing your wardrobe attire.

In regards to your home, it is often enough to do the superficial and obvious tidy work to give the impression of clenliness. The last 20% (e.g. vacuuming under the bed and behind the wardrobes) is more time-consuming and contributes little to the overall picture.

Similarly, you probably only wear 80% of the clothes in your wardrobe 20% of the time. It is much more likely that you regularly (80% of the time) wear the same (20%) of your favorite clothes. Right?

Examples & Tips: How Does the Pareto Principle Help in Everyday Working Life?

In a professional context, the Pareto principle can be found in almost every industry and every department.

Here are three examples and tips on how you can apply it:

In Sales:

Particularly in B2B sales, customer portfolios are made up of different company sizes. In most cases, this means that 20% of customers account for 80% of sales. Focus on understanding and addressing their needs. After all, decisions that appeal to many customers but not the right ones may generate less revenue.

In Software Development:

Not every mistake is equally important. In many cases, only 20% of the errors that occur are responsible for 80% of the problems. Therefore, focus on precisely these errors in order to improve an application.

In the Non-Profit Sector:

In non-profit organizations, not all donors are equally important in contributing to the total funding of projects. Often 80% of income comes from 20% of donors. So focus your communication on these important supporters. 

Conclusion: Soaring Success with Smart Prioritization

The essence of the theory: few things have a big impact.

You can see the greatest effect in areas such as time management and task prioritization.

To successfully apply the 80/20 rule here and in general, remember these two steps:

  1. Analyze intelligently: Understand your results and find the 20% that have the biggest impact.
  2. Prioritize boldly: Decide to prioritize tasks based on your analysis and say no to more important tasks from time to time.

Have fun with smart prioritization!


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