The Power of the Pareto Principle

It’s easy to have faith in yourself and have discipline when you’re a winner, when you’re number one.
What you’ve got to have is faith and discipline when you’re not a winner.


discipline factor

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that 20 percent of the people owned 80 percent of the wealth. Most people have heard of the Pareto Principle, also known as the 80/20 rule, which says that 80 percent of your results will come from 20 percent of your activities.

More generally, the Pareto Principle is the observation that most things in life are not distributed evenly.

For example:

  • Twenty percent of the customers create 80 percent of the revenue
  • Twenty percent of the input creates 80 percent of the result
  • Twenty percent of the workers produce 80 percent of the result
  • Twenty percent of the bugs cause 80 percent of the crashes
  • Twenty percent of the features cause 80 percent of the usage
  • Twenty percent of your investments will produce 80 percent of your returns
  • Eighty percent of your problems will come from 20 percent of your people

They key to leveraging this knowledge is having the self-discipline to focus the majority of your efforts on the important 20 percent of your activities at the expense of the rest. This law carries across every single aspect of your life, although the actual number could be 85/15 or 90/10.

Take the time to seriously evaluate your business and personal efforts. Getting rid of the eighty and focusing on the twenty can have an exponential impact on most businesses if they have the courage to do it!

Focus your time, money, and efforts only in those places where you know you will get the highest returns. In life, every minute counts. Have the self-discipline to use your time to maximize your business.

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