The Pareto Principle: The Secret to High-Impact Leadership
Master the 80/20 Rule
In this issue:
Drinking From a Firehose
Let’s Start With Some History
What Is The Pareto Principle?
Applying the Pareto Principle
Common Mistakes to Avoid
Download The Pareto Principle Worksheet
Recommended Resources
Final Thoughts & Takeaways
✨
Drinking From a Firehose
Early in my leadership journey, I remember a typical day in my work life. Every morning after reaching the office, I would grab a cup of coffee, log into my computer, and start staring at my task list.
My eyes would go sour as each item screamed for attention. Emails. Meetings. Reports. Fires to put out.
It was like trying to drink from a firehose.
What did the fighter in me do to respond to this? Well, I took up the challenge, and started working harder, frantically trying to get ahead of the tasks.
But you know what: the harder I worked, the more I felt stuck. And it only grew worse as the task list piled up.
Sounds familiar?
Most managers today live the routine I described above, day in and day out, and face the same challenges. They burn themselves trying to get to that magical Zero Inbox.
Thankfully, there is a simple solution - the Pareto Principle - which we will discuss today. This isn’t just a productivity hack; it’s a mindset shift.
Are you ready to multiply your team’s productivity and accelerate your business results? Let’s dive in.
Let’s Start With Some History
Vilfredo Pareto was an Italian polymath from the late 19th century, known for his groundbreaking work in economics and sociology.
His research focused on income distribution and how people make choices—a topic that still fascinates researchers today.
While studying income distribution in Italy, Pareto made a remarkable observation:
About 80% of Italy’s land was owned by just 20% of the population.
This insight fascinated him and became the foundation for what we now know as the Pareto Principle—or the 80/20 rule.
Decades later, in 1941, Joseph M. Juran, a Romanian-American engineer, stumbled upon Pareto’s findings. Juran saw something powerful in Pareto’s observation and took it beyond economics.
He realized this 80/20 pattern applied to quality management, noting that 80% of problems often stem from just 20% of the causes.
Together, their insights gave rise to one of the most powerful principles in productivity, business, and leadership. And while the Pareto Principle started as an economic observation, its real magic lies in how widely it applies—across industries, disciplines, and even your daily to-do list.
What Is The Pareto Principle?
At its core, the Pareto Principle, sometimes called the 80/20 rule, states that for many outcomes, roughly 80% of consequences come from 20% of the causes.
Another way to put it is that 20% of your projects will yield 80% of the results, or 20% of your team will create 80% of the impact.
This principle forces you to think hard about what your priorities are, and where you should be focusing your attention.
Simple at it’s core, and without any rigorous scientific proof, this principle has stood the test of time.
Still not convinced? Ask yourself these questions:
How many hours of your day do you feel most productive? Likely around 2-3 hours out of your typical work day.
How many clothes from your closet do you wear most of the time? You guessed it — around 20%.
How often do you listen to your favorite songs on Spotify or YouTube Music? That’s right, you likely listen to just 1/5th of your playlist most of the time.
How many apps on your phone do you use regularly? Out of the dozens you’ve downloaded, you probably rely on just 20% for most of your needs (and probably need to do some cleaning!)
How many products of Apple generate 80% of their revenue? Yes, around 20%—primarily their iPhone and a handful of other flagship items.
How many customers in your business drive most of your revenue? You’ll likely find that around 20% of your clients contribute to 80% of your profits.
How much airline revenue comes from business and first-class tickets? Unsurprisingly, airlines often earn the bulk of their revenue from a small proportion of passengers—the ones flying business or first class.
❤️ Enjoying the read? Subscribe to The Good Boss to get articles like this every week.
Applying the Pareto Principle
Okay, I hope that was enough to convince you about the sheer power of this principle.
Now, let’s turn our attention to making this principle work for you in your role as a leader. Doing this methodically will help you to multiply your team’s productivity and accelerate your business results.
Next, we will:
Dive into five specific situations all leaders face in their roles, and how you can apply the principle in each situation
Review some common mistakes you should avoid as you apply this principle
Put the power of this principle into practice with the Pareto Principle worksheet, which includes step-by-step prompts to guide you through the application process
Review additional resources to further your understanding
Close with final thoughts & takeaways