Forget the 80/20 Rule: How to Design Your Own Ratio for Success

When used correctly, Pareto's Principle gives us a clearer picture of where we need to focus our time and energy. Unfortunately, though, there are quite a few misconceptions floating around about this principle.

By Tanya Dalton Originally published

Andranik Hakobyan | Getty Images

Opinions expressed by Entrepreneur contributors are their own.

Pareto's Principle, often called the "80/20 Rule," is a foundational principle of productivity, as it applies in a thousand different ways in our personal life, work life and everything in between.

Before we take a deep dive into this centuries-old concept, though, I'd like to ask you: Do you consider yourself to be a thinker or a doer? Hold on to that answer, as we're going to come back to that in a bit.

Pareto's Principle is a trendy topic, but it was actually first discovered in the late 1700s by the Italian economist, Vilfredo Pareto. Pareto discovered that 80 percent of Italy's national wealth could be attributed to 20 percent of its population. In other words, the wealth was not evenly distributed, but rather concentrated in a highly predictable way. There lies the heart of the principle, really — the idea that most things in life are not evenly distributed.

The Pareto Principle model was later revived in the 1950s by Joseph Moses Juran, considered by many to be the father of the quality movement. What he discovered is that this principle can be applied into a variety of areas in business and life.

In its essence, Pareto's Principle proves that small, focused pockets of effort produce the majority of your results. In other words, not all things are equal and therefore should not be treated as equal. In fact, when we focus on fewer projects, tasks or activities, known as the "vital few," we maximize our impact. When we prioritize our time by focusing on the vital few, we can become more effective with our work, which is why it's such an important concept to understand.

Related: How I Built My Business So That My Husband Could Quit His Job

Some common misconceptions

When used correctly, Pareto's Principle gives us a clearer picture of where we need to focus our time and energy. After all, these are the few items on your list that will move the needle the most. Unfortunately, though, there are quite a few misconceptions floating around about this principle. And by quite a few, I mean, a lot. There are a lot of so-called experts out there who use Pareto's Principle as a buzzword in their teachings, but they don't apply it appropriately.

To really dive into this concept, we first need to remember that productivity is not one size fits all. I mean, let's be honest, your life is not one size fits all. Let's hop off that bandwagon of whatever it is that we think we're supposed to do, and instead let's make the strategies that we read about truly work for us as individuals.

Misconception #1: "I have to follow the 80/20 percentage breakdown exactly."

Because it's often called the 80/20 Rule, people can get fixated on those percentages. But Pareto's Principle is not about those hard and fast numbers. Rather, look at the numbers 80 and 20 as symbolic representations of that "uneven balance" we've been discussing. The fact that they happen to add up to 100 is simply a coincidence.

Your input and output ratio might look different. Perhaps you are an 80/10 person, where 80 percent of your results come from 10 percent of your activities. Or maybe that ratio is 90/15 instead. Don't get caught up in the numbers 80 and 20. A much better way to view it in your daily work and life is like this: The small, focused pockets of effort will produce the majority of my results.

Related: 4 Ways to Turn Uncertainty into Strength for Your Business

Misconception #2: "My focus should be entirely on the "vital few,' and I should forget about the "trivial many' if I want to be truly productive."

Oh how I wish we could be true! But to do this — to only concentrate on the "vital few" and leave the "trivial many" in our rearview mirror — would lead to utter disaster. Just because something doesn't bring us a direct ROI, doesn't mean we don't need to give it our attention. As much as we'd like to, we cannot pretend those "trivial many" tasks, like paying the bills or filing paperwork, don't exist.

These tasks are things that we don't necessarily love to do, and we might even view them as time-wasters in the large scope of things. But here's the thing — and this is why I put paying the bills in this category — these are things we still have to do, whether we like it or not. In fact, Pareto's Principle is applied ineffectively when people assume they need to focus exclusively on the vital few tasks. If we were to do that, then we'd get lost in a cycle of continuously playing catch up, which is the opposite of what we want.

Related: 3 Questions To Ask If You Want Female Entrepreneurs to Accelerate

Making a Pareto Principle model that works for you

Now that we know the common misconceptions out there, I want to help you design your own ratio for success based on what productivity looks like and feels like to you.

Let's go back to the question I asked at the beginning of this article: Do you consider yourself to be a thinker or a doer? Regardless of how you answered, what I want you to dig into are these questions: How much of the thinking you do is truly effective? How much of the decision-making you do truly impacts your business? If you are spending your time thinking about the wrong things, or if you're spending most of your time shifting, moving from one task to the next, is any of that really effective? The key that we seem to miss when we consider Pareto's Principle is that the rule is meaningless if we don't find ways to apply it effectively to ourselves.

Warren Buffet is widely regarded as a genius when it comes to Pareto's Principle. Buffet is known for spending 80 to 90 percent of his day learning. This means that the man we all know as a renowned investor spends little of his time actually investing and the majority of his time learning. You can take this model and run with it, but that ratio might not work for you. Success does not mean trying to fit yourself neatly into a box that was made for someone else. You are not limited by someone else's definition of success. The only definition that matters is the one that you create for yourself based on the life that you lead and the life you want.

We don't want to get so caught up in that 80/20 ratio that we're losing sight of what it is we really want. So here's what I want you to do. I want you to sit down, and I want you to think about what your ratio for success really looks like. Forget about input; forget about output. Come up with a ratio that speaks to how effective you can be. Are you in fact a 20/80 person? Do you spend 20 percent of your time thinking and 80 percent seeing your decisions through? Are you a 10/90? Are you a 15/85, or something different?

What you need to consider here are your own biggest priorities and how effective you are in your efforts to see them through, cultivate them and actually take action on them. If you are effective in your thinking, you're going to be effective at your execution and vice versa. And that is really where true productivity happens.

If I can leave you with one message it is this: Let's not blindly apply productivity principles because we think that's what we're supposed to do. Rather, let's take a step back and see the bigger picture of how they work for each of us as individuals.

Related: Applying the Pareto Principle Can Improve Your Time Management

Tanya Dalton

Entrepreneur Leadership Network Writer

Tanya Dalton is a transformational speaker, best-selling author and nationally recognized productivity expert. She is also the founder of inkWELL Press Productivity Co.

Related Topics

Editor's Pick

This 61-Year-Old Grandma Who Made $35,000 in the Medical Field Now Earns 7 Figures in Retirement
A 'Quiet Promotion' Will Cost You a Lot — Use This Expert's 4-Step Strategy to Avoid It
3 Red Flags on Your LinkedIn Profile That Scare Clients Away
'Everyone Is Freaking Out.' What's Going On With Silicon Valley Bank? Federal Government Takes Control.

How to Detect a Liar in Seconds Using Nonverbal Communication

There are many ways to understand if someone is not honest with you. The following signs do not even require words and are all nonverbal queues.

Business News

What Does the Banking Crisis Mean for Startups and Small Business Owners?

Author, CPA and business owner Gene Marks break down everything entrepreneurs need to know about the impact of the SVB collapse.

Business News

'Invest In That Future Now Before It's Too Late': Bill Gates Calls For Global Pandemic Response Team In Op-Ed

In the same month that the World Health Organization called the coronavirus a pandemic three years ago, billionaire Bill Gates reiterated his call for a "fire department for pandemics."

Business News

New Mexico Is Hiring Professional Bear Huggers -- Here's How to Land the Dream Job

The American Black Bear was selected as the state's official animal on February 8, 1963, by the New Mexico Legislature.

Business News

Carnival Cruise Wants Passengers to Have Fun in the Sun — But Do This, and You'll Get Burned With a New $500 Fee

The cruise line's updated contract follows a spate of unruly guest behavior across the tourism industry.


Pros And Cons Of Leadership Coaching: Is It Right For You Or Your Company?

Leadership coaching can work really well in some cases and not so well in others. It all depends on a few factors and if your company is ready to make the leap.