www.studysamurai.com 1 TIME MANAGEMENT: The 80-20 Rule or Pareto’s Principle The assumption around the 8020 rule is that most of the results in any situation are determined by a small number of causes. You can use the 8020 rule to: • Choose the right goal • Choose the right task • Choose the right action or strategy Have you completed an assignment or a task and realised after that you “wasted” a lot of time on needless research or other activities related to the task not needed to produce the result you wanted? Start thinking about the 80/20 way of working smarter not harder. Why the “80-20 rule” is so important Check IN – Answer the questions below.
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www.studysamurai.com 1
TIME MANAGEMENT: The 80-20 Rule or Pareto’s Principle
The assumption around the 80-‐20 rule is that most of the results in any situation are determined by a small number of causes. You can use the 80-‐20 rule to: • Choose the right goal • Choose the right task • Choose the right action or strategy
Have you completed an assignment or a task and realised after that you “wasted” a lot of time on needless research or other activities related to the task not needed to produce the result you wanted? Start thinking about the 80/20 way of working smarter not harder.
The important thing to understand is that in your life there are certain activities you do (your 20 percent) that account for the majority (your 80 percent) of your happiness and outputs. Examples There are many economic conditions, for example the distribution of wealth and resources on planet earth, where a small percentage of the population controls the biggest chunk, which clearly demonstrates the 80/20 Rule. There are business examples such as 20 percent of employees are responsible for 80 percent of a company’s output or 20 percent of customers are responsible for 80 percent of the revenues. At a micro level just by looking at your daily habits you can find plenty of examples where the 80/20 rule applies. You probably make most of your phone calls to a very small amount of the people you have numbers for. You likely spend a large chunk of your money on few things. There is a good chance that you spend most of your time with only a few people from the entire pool of people you know.
What are examples of the 80/20 rule in your life? Friends, work, etc. ..........................................................................................................................................................
Rethink Your To-‐Do List Unfortunately, most time management involves to-‐do lists, which tend to treat the 20 percent of your work that really matters as equal to the 80 percent of things that don't. Having a simple list of things to do almost forces you to waste time doing stuff that doesn't really count. That's true even if you prioritise according to importance. Plenty of important things take so much effort that, in the end, they're not worth actually doing. Here's how to use the Pareto Principle to manage your time more effectively. When you make a to-‐do list, prioritize each item by the amount of effort required (1 to 10, with 1 being the least amount of effort) and the potential positive results (1 to 10, with 10 being the highest impact). Create a New Ranking Now, divide the amount of effort by the potential results to get a "priority" ranking. Do the items with the lowest resulting priority number first. Here's a simple example: Task 1: Write report on trip meeting. Effort=10, Result=2, Priority=5 Task 2: Prepare presentation for marketing. Effort=4, Result=4, Priority=1 Task 3: Call current customer about referral. Effort=1, Result=10, Priority=0.1 See your new priority-‐based order? You do Task 3 first, Task 2 second, and Task 1 last, if at all.
Here you do and 80/20 analysis of your destination e.g. your goals and Route -‐ e.g. your plans and ideas on how to achieve your goals and Action -‐ what you will do to achieve your goals. This is about analysing your life and looking at what are the 20% of goals (destination) that will produce the best result in your life and doing the same for plans (route) and action.
Do an 80/20 on Destination, Route and Action on a task, assignment or perhaps a bigger goal. ..........................................................................................................................................................
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