Suppose you could erase 80% of the items on your daily to-do list and still get roughly the same results. How would you feel? Happier than an only child on Christmas morning, I bet. Here’s the story of a famous Italian economist who proved that you can.
It starts in 1906, when both the United States and Europe were going through big changes in the make-up of their populations. That year the Statue of Liberty would welcome a record number of immigrants to America. And no country would send more immigrants its way than Italy as 273,000 Italians said goodbye to la bella vita and hello to the New World.
Why were they so anxious to leave? Partly because of a change in Italy that was first identified by a man named Vilfredo Pareto.
Pareto started out in life as a civil engineer but decided to switch to economics in his late forties. It was his engineering experience that made him take a much different tack than the other economists of the day. Pareto cared less for the philosophizing and moral theories that were then common in the field, and more for relying on empirical research and mathematics. Spurred on by this research-driven approach he eventually came to a shocking realization: 80% of the land in Italy — a country close in size to California — belonged to just 20% of Italians. With a national economy based on agriculture this meant the average Italian had very little opportunity to make a living. Therefore many chose to leave for America, where they hoped their chances would be better.
And it wasn’t just in Italy. When Pareto looked at records from different eras in Switzerland, Germany, France, Britain, Peru and other regions he found the same 80/20 distribution held true.
Stranger still he also observed this principle on a much smaller scale. One summer while tending to his garden in Switzerland he decided to analyze his harvest of spring peas. That’s when he noticed that 80% of the peas came from just 20% of the peapods he had grown.
Only in 1941 would this mysterious rule of thumb, i.e. that 80% of the results in any given field stem from just 20% of the causes, come to be known as the Pareto principle. The person responsible was an American management consultant called Joseph Juran. He was a quality management expert who stumbled across Pareto’s work and saw how useful it could be to the world of business.
At first Juran summed up the Pareto principle like this: “the vital few and the trivial many”. Later on he changed this pat description to “the vital few and the useful many” to signal that one shouldn’t *entirely* ignore the remaining 80%.
Since then the 80/20 rule has been confirmed in wide-ranging fields. Microsoft says that focusing on fixing 20% of the most-reported software bugs will fix 80% of crashes and errors. In the U.S. it’s believed that 80% of the health system’s resources are used by just 20% of the patients. And in business it’s often said that 80% of a company’s profits come from just 20% of the things on which it spends its time.
How might we translate this to our own backyards? Perhaps by starting from the assumption that only 2 of the items on your 10-item to-do list will have a material impact on your business (or 1 in 5, 4 in 20, etc.) How do you find this “vital few”? Start by ruthlessly filtering for the things that only you can do. For the others think about what you can safely eliminate, ignore, automate, or delegate. For delegating, consider the activities that are time-consuming, require specialized knowledge, or both. Good candidates are things like accounting, booking travel, finding real estate or managing social media on a daily basis. (At Emphatic we like to say that the best way to do social media is not to do it, at all!)
Not only might this help you focus on activities that will improve your business today, it may also help you to focus on how you might grow it tomorrow, in ways you’d only dreamed of up to now. I keep this quote from H.L. Hunt taped to my monitor:
Decide what you want, decide what you are willing to exchange for it. Establish your priorities and go to work.