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How Useful Is the Pareto Principle?

How Useful Is the Pareto Principle?

The Pareto Principle states that 80% of the results from any series of actions are caused by 20% of the actions themselves. In other words, most of the results we get are because of a small minority of our actions. The rest are either wasted or produce little of value. This sounds like a useful observation. However, before you decide the Pareto Principle is true and can be used to guide your actions, I want to ask two important questions.

  1. Can you identify which actions make up the useful 20%? And can you do so in advance?
  2. Does this useful 20% always contain more or less the same actions?

Let’s take the first question. It’s easy to feel intuitively that most results arise from a small group of actions. The Pareto Principle feels immediately valid. It also feels like a practical tool. Identify the “magic 20%” of actions and you can more or less dispense with the other 80% without much impact on your results. What a marvelous saving of time and effort.

Of course, this only works if you can reliably distinguish the 20% of actions (or people, or events) that produce that disproportionate amount of benefits. It also assumes every result comes from a single, identifiable action — or at least a small, obviously linked group of them.

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But is this true? Don’t some results rely on the interaction of large numbers of events, choices, actions and decisions? Can we know which count and which don’t? What if we dropped some, only to find later they were essential in some way? Maybe they only produce good results in combination? Cutting seemingly unnecessary actions because they don’t obviously fit into the “magic 20%” might turn out to be a poor idea.

The Pareto Principle is perhaps most often applied to sales. Suppose you could reliably identify the 20% of sales calls that produced 80% of the orders you took this week. How much might the success of those calls rely on the market intelligence, knowledge and simple practice you gained by making the other 80%? Could you miss out all the rest, or even a significant number of them? That would include new customers being encouraged to place larger orders, prospects and old customers who might be won back from a competitor.

My second concern is this: is it always the same 20%?

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Let’s stick with the sales calls. This week, 20% of your calls produce 80% of your sales. Pareto rules! Next week, you need to sell just as much. Will you visit the same 20% of customers and receive the same orders?
Surely that’s unlikely. They only just placed an order. Most, maybe all, need to use up that order before buying again. Fine. You just need to find another 20%. But how? Everyone else was in the “unproductive” 80% last week? But if Pareto works, at the end of the next week you’ll once again find 80% of orders came from a new 20% of calls.

What’s going on? My guess is the Pareto Principle distinguishes groups you can only find after the event, once you can see what worked and what didn’t. The membership of the “magic 20%” of people or actions shifts each time. Wait long enough and every one will sometime be part of that 20% group.

If that’s so, the Principle is almost worthless as a guide to future action, which is how it’s most often used. There may be some actions or people (20% again? Who knows?) that figure so rarely in the “magic group” they could be removed without loss. There may be some regular members of that group that could be identified and given more focus and investment. Either way, what’s needed is time, careful observation and recording over many occasions, good records and much patience and reflection. None of these are actions or qualities much associated with today’s frenetic organizational pace.

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I’m not saying Pareto is wrong. I don’t know. I’m not sure anyone has ever done the lengthy and extensive research needed to find out. I’m merely suggesting it’s neither the universally applicable principle, nor the simple measure, nor the practical guide to decisions we’ve been asked to believe it is for so long.

To sum up:

I think the Pareto Principle has great intuitive attractiveness — which says nothing about whether or not it works, nor how it works (if it does). However, these questions remain unresolved:

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  1. How do you know which 20% is producing the results? Can you even find out at a time when the knowledge might be useful? I suspect you can usually only find the answer — if there is one — after the event. And if that’s so, it leads me to a second question.
  2. Is it always the same 20%? If it’s not (and I suspect it isn’t), over time maybe the whole 100% will be in that magic 20% group sometime. And if that’s true, the Principle applies only to a specific occasion (if it applies at all).

If any of my concerns is valid, the whole idea becomes worthless as a guide to future action or allocating resources (which is how people try to use it).

Adrian Savage is an Englishman and a retired business executive who lives in Tucson, Arizona. You can read his thoughts most days at The Coyote Within and Slow Leadership, the site for anyone who wants to bring back the fun and satisfaction to management work.

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Last Updated on June 25, 2019

100 Motivational Quotes That Will Guide You To Massive Success

100 Motivational Quotes That Will Guide You To Massive Success

Below are the 100 most motivational quotes ever. Read them and get motivated for success, and share this post to help your friends get success too!

1. All our dream can come true, if we have the courage to pursue them. – Walt Disney

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    2. Your attitude, not your aptitude, will determine your altitude. – Zig Ziglar

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      3. The Man Who Has Confidence In Himself Gains The Confidence Of Others. – Hasidic Proverb

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        4. What the mind can conceive and believe, it can achieve.– Napoleon Hill

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          5. For me, life is continuously being hungry. The meaning of life is not simply to exist, to survive, but to move ahead, to go up, to achieve, to conquer. – Arnold Schwarzenegger

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            6. What you seek is seeking you. – Rumi

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              7. It is never too late to be what you might have been. —George Eliot

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                8. Don’t worry about failure; you only have to be right once. —Drew Houston

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                  9. The successful warrior is the average man, with laser-like focus. – Bruce Lee

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                    10. I find that the harder I work, the more luck I seem to have. – Thomas Jefferson

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                      11. A journey of a thousand miles begins with a single step. – Lao Tzu

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                        12.The question isn’t who is going to let me; it’s who is going to stop me. – Ayn Rand

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                          13. Live as if you were to die tomorrow. Learn as if you were to live forever. – Mahatma Gandhi

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                            14. The only thing standing between you and your goal is the bullshit story you keep telling yourself as to why you can’t achieve it. –  Jordan Belfort

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                              15. When you can’t change the direction of the wind, just adjust your sails. – H. Jackson Brown Jr

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                                16. Security Is Mostly A Superstition. Life Is Either A Daring Adventure Or Nothing. – Helen Keller

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                                  17. Identify your problems but give your power and energy to solutions. – Tony Robbins

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                                    18. We become what we think about most of the time, and that’s the strangest secret. – Earl Nightingale

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                                      19. Double down on whats working. Cut the rest. – Tai Lopez

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                                        20. The best revenge is massive success. – Frank Sinatra

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                                          21. Tough times never last, but tough people do. – Dr. Robert Schuller

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                                            22. Stop chasing the money and start chasing the passion. Tony Hsieh

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                                              23. I’ve been blessed to find people who are smarter than I am, and they help me to execute the vision I have. – Russell Simmons

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                                                24. The secret of success in life is for a man to be ready for his opportunity when it comes. – Benjamin Disraeli

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                                                  25. Patience, persistence, and perspiration make an unbeatable combination for success. – Napoleon Hill

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                                                    26. If you don’t design your own life plan, chances are you’ll fall into someone else’s plan. And guess what they have planned for you? Not much. – Jim Rohn

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                                                      27. People who are crazy enough to think they can change the world, are the ones that do. – Rob Siltanen

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                                                        28. Poor people have big TVs. Rich people have a big library. – Jim Rohn

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                                                          29. A friendship founded on business is better than a business founded on friendship. – John D. Rockefeller

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                                                            30. The way to get started is to quit talking and begin doing. – Walt Disney

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                                                              31. The biggest risk is not taking any risk. In a world that’s changing really quickly, the only strategy that is guaranteed to fail is not taking risks. – Mark Zuckerburg

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                                                                32. Twenty years from now you will be more disappointed by the things you didn’t do that the ones you did do. So throw off the bowlines. Catch the trade winds in your sails. Explore. Dream. Discover. – Mark Twain

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                                                                  33. Everything you want is out there waiting for you to ask. Everything you want also wants you. But you have to take action to get it.”– Jack Canfield

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                                                                    34. If you don’t stand for something you’ll fall for anything. – Malcolm X

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                                                                      35. Nobody ever wrote down a plan to be broke, fat, lazy. or stupid. Those things are what happen when you don’t have a plan. – Larry Winget

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                                                                        36. Don’t let the fear of losing be greater than the excitement of winning. – Robert Kiyosaki

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                                                                          37. If you want to be successful, find someone who has achieved the results you want and copy what they do and you’ll achieve the same results. – Tony Robbins

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                                                                            38. Those who dare to fail miserably can achieve greatly. – John F. Kennedy

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                                                                              39. Reading is to the mind, as exercise is to the body. – Brian Tracy

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                                                                                40. The best reason to start an organization is to make meaning; to create a product or service to make the world a better place. – Guy Kawasaki

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                                                                                  41.You must expect great things of yourself before you can do them. —Michael Jordan

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                                                                                    42. Don’t be afraid to give up the good to go for the great. – John D. Rockefeller

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                                                                                      43. Develop success from failures. Discouragement and failure are two of the surest stepping-stones to success. – Dale Carnegie

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                                                                                        44. The first step toward success is taken when you refuse to be a captive of the environment in which you first find yourself. – Mark Caine

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                                                                                          45. Someone is sitting in the shade today because someone planted a tree a long time ago. —Warren Buffett

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                                                                                            46. Do not let your fire go out, spark by irreplaceable spark in the hopeless swamps of the not-quite, the not-yet, and the not-at-all. Do not let the hero in your soul perish in lonely frustration for the life you deserved and have never been able to reach. The world you desire can be won. It exists.. it is real, it is possible, it’s yours. – Ayr Rand

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                                                                                              47. If you are willing to do more than you are paid to do, eventually you will be paid to do more than you do. – Anonymous

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                                                                                                48. Make each day your masterpiece.  – John Wooden

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                                                                                                  49. You can’t connect the dots looking forward, you can only connect them looking backwards. So you have to trust that the dots will somehow connect in your future. You have to trust something – your gut, destiny, life, karma, whatever. This approach has never let me down and it has made all the difference in my life. – Steve Jobs

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                                                                                                    50. Knowing Is Not Enough; We Must Apply. Wishing Is Not Enough; We Must Do. – Johann Wolfgang Von Goethe

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                                                                                                      51. If you don’t have a competitive advantage, don’t compete. – Jack Welch

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                                                                                                        52. People who succeed have momentum. The more they succeed, the more they want to succeed, and the more they find a way to succeed. Similarly, when someone is failing, the tendency is to get on a downward spiral that can even become a self-fulfilling prophecy. – Tony Robbins

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                                                                                                          53. You miss 100% of the shots you don’t take. – Wayne Gretzky

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                                                                                                            54. You may have to fight a battle more than once to win it. – Margaret Thatcher

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                                                                                                              55. If you want to make a permanent change, stop focusing on the size of your problems and start focusing on the size of you! – T. Harv Eker

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                                                                                                                56. Be patient with yourself. Self-growth is tender; it’s holy ground. There’s no greater investment. – Stephen Covey

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                                                                                                                  57. Only put off until tomorrow what you are willing to die having left undone. – Pablo Picasso

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                                                                                                                    58 – Doing the best at this moment puts you in the best place for the next moment. – Oprah Winfrey

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                                                                                                                      59. I believe every human has a finite number of heartbeats. I don’t intend to waste any of mine. – Neil Armstrong

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                                                                                                                        60. A goal is a dream with a deadline. – Napoleon Hill

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                                                                                                                          61.You’ll never change your life until you change something you do daily. The secret of your success is found in your daily routine. – John C. Maxwell

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                                                                                                                            62. The more you praise and celebrate your life, the more there is in life to celebrate. – Oprah Winfrey

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                                                                                                                              63. The two most important days in your life are the day you are born and the day you find out why. – Mark Twain

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                                                                                                                                64. Accept responsibility for your life. Know that it is you who will get you where you want to go, no one else. – Les Brown

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                                                                                                                                  65. Amateurs sit and wait for inspiration, the rest of us just get up and go to work. – Stephen King

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                                                                                                                                    66. A strong, positive self-image is the best possible preparation for success. – Joyce Brothers

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                                                                                                                                      67. If your actions inspire others to dream more, learn more, do more and become more, you are a leader. – John Quincy Adams

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                                                                                                                                        68. If you’re not stubborn, you’ll give up on experiments too soon. And if you’re not flexible, you’ll pound your head against the wall and you won’t see a different solution to a problem you’re trying to solve. – Jeff Bezos

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                                                                                                                                          69. Imagine Your Life Is Perfect In Every Respect; What Would It Look Like? – Brian Tracy

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                                                                                                                                            70. First they ignore you. Then they laugh at you. Then they fight you. Then you win. –  Mahatma Gandhi

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                                                                                                                                              71. Do one thing every day that scares you. – Eleanor Roosevelt

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                                                                                                                                                72. Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential. – John Maxwell

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                                                                                                                                                  73. It does not matter how slowly you go, so long as you do not stop. – Confucius

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                                                                                                                                                    74. If you don’t build your dream, someone else will hire you to help them build theirs. – Dhirubhai Ambani

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                                                                                                                                                      75. A successful man is one who can lay a firm foundation with the bricks others have thrown at him. – David Brinkley

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                                                                                                                                                        76. Learn to value yourself, which means: fight for your happiness. – Ayr Rand

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                                                                                                                                                          77. When one door closes, another opens; but we often look so long and so regretfully upon the closed door that we do not see the one which has opened for us. – Alexander Graham Bell

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                                                                                                                                                            78. Strive not to be a success, but rather to be of value. – Albert Einstein

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                                                                                                                                                              79. The number one reason people fail in life is because they listen to their friends, family, and neighbors. – Napoleon Hill

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                                                                                                                                                                80. Great minds discuss ideas. Average minds discuss events. Small minds discuss people. – Eleanor Roosevelt

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                                                                                                                                                                  81. The only limit to our realization of tomorrow will be our doubts of today. – Franklin D. Roosevelt

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                                                                                                                                                                    82. If you are not willing to risk the usual, you will have to settle for the ordinary. – Jim Rohn

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                                                                                                                                                                      83. Success is walking from failure to failure with no loss of enthusiasm. – Winston Churchill

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                                                                                                                                                                        84. The price of anything is the amount of life you exchange for it. – Henry David Thoreau

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                                                                                                                                                                          85. Take one idea. Make that one idea your life – think of it, dream of it, and live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success that is the way great spiritual giants are produced. – Swami Vivekananda

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                                                                                                                                                                            86. Whether you think you can or you think you can’t, you’re right. – Henry Ford

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                                                                                                                                                                              87. It always seems impossible until it’s done. – Nelson Mandela

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                                                                                                                                                                                88. Be so good they can’t ignore you. – Steve Martin

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                                                                                                                                                                                  89. If you can’t fly, then run, if you can’t run, then walk, if you can’t walk, then crawl, but whatever you do, you have to keep moving forward. – Martin Luther King Jr.

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                                                                                                                                                                                    90. In the end, we only regret the chance we didn’t take – Lewis Carroll

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                                                                                                                                                                                      91. Don’t compare yourself with anyone in this world… if you do so, you are insulting yourself – Bill Gates

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                                                                                                                                                                                        92. Small daily improvements are the key to staggering long term results – Unknown

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                                                                                                                                                                                          93. Many of life’s failures are people who did not realise how close they were to success when they gave up. – Thomas Edison

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                                                                                                                                                                                            94. Motivation is what gets you started. Habit is what keeps you going – Jim Rohn

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                                                                                                                                                                                              95. The best way to predict the future is to create it – Peter Drucker

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                                                                                                                                                                                                96. It’s not whether you get knocked down, it’s whether you get up. – Vince Lombardi

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                                                                                                                                                                                                  97. The only person you are destined to become is the person you decide to be. – Ralph Waldo Emerson

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                                                                                                                                                                                                    98. Don’t let yesterday take up too much of today. – Will Rogers

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                                                                                                                                                                                                      99.You learn more from failure than from success. Don’t let it stop you. Failure builds character. – Unknown

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                                                                                                                                                                                                        100. Optimism is the one quality more associated with success and happiness than any other. – Brian Tracy

                                                                                                                                                                                                        lastone!!!

                                                                                                                                                                                                          You made it to the end! Are you feeling motivated? Awesome, now share this post with your friends to help them achieve success too.

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