8 Areas Where the Pareto Principle Can Help You Achieve Success

Thinking according to the Pareto Principle:

Pareto thinking helps us to identify the few aspects of high importance and ignore many aspects that are not important, and it requires us to see the essential components of a task. 

It is reflective, unconventional thinking, and it seeks to achieve maximum benefit through the application of a strategy that does not depend on the traditional linear thinking approach, and combines great ambition, namely the desire to change things for the better, and the style that is filled with relaxation and confidence.

Thinking according to the Pareto principle is reflective thinking:

Thinking according to the 80/20 rule differs from current thinking. The common approach to thinking is often pragmatic, hasty, linear, and hierarchical. However,Pareto thinking aims to do some reflection before starting work, so that we divide the big task into small parts, then we choose the most important parts and work hard on them, thus achieving fantastic results with minimal effort and resources. 

Thinking according to the Pareto principle is unconventional thinking:

By thinking according to the Pareto principle, we can detect when dominant beliefs are wrong, and the effectiveness of this method lies in doing things differently based on a non-dominant belief.

Strategic thinking:

Being strategic means focusing on what's important; That is, on the few tasks that lead to a lot, compared to the many tasks that do not give us any advantage or preference. 

Nonlinear thinking:

Linear thinking follows a strict mental model, but it is sometimes inaccurate and its results are very negative because most of us prefer linear thinking since it is an easy model for thinking. However, it is bad at describing things, as it depends on measurement only and does not succeed in changing the data.

Scientists and historians long ago abandoned linear thinking, so we must adopt nonlinear thinking. You'll get the most valuable insights by investigating nonlinear relationships that others ignore, but whose importance is emphasized by the Pareto principle.

Here are 8 areas where the Pareto principle can help you achieve success:

1. The Pareto principle in the domain of happiness: 

Happiness has nothing to do with money, and it cannot be likened to having money. You can save the money that you do not spend and then invest it, and through compound interest, it can be doubled. However, the matter is different when happiness is concerned. If you do not spend it today, it will not bring you more happiness later. In that, they are like muscles, if you don't use them they atrophy. 

People who use the Pareto principle may realize what makes them happy, and pursue it consciously, intelligently, and cheerfully. They know that what makes them happy today will make them happy tomorrow. So:

1. 80% of our achievements and happiness come from 20% of our time, and these ratios can be generalized broadly.
2. Our lives are strongly affected for better or for worse by a few decisions and events, so we can improve our quality of life by being aware of the critical aspects of our lives and making decisions that will make us happy and productive.

3. Anyone can achieve something important, as the secret is not in the effort he puts in, but in knowing what they must accomplish. It is natural that you are more skilled in certain things than others, but you will not benefit from your ingenuity if you do many things in which your skill does not rise to the level of mastery.

4. Most of our failures occur in areas that others force us into, while most of our successes occur in areas that we enter willingly.

5. Few people spend enough time thinking about raising their level of happiness, while most people pursue goals that have nothing to do with happiness, such as money, or job promotions that are difficult to achieve. Even when achieved, it turns out that they do not contribute to achieving happiness.

2. The Pareto principle in investing:

The increase in wealth results in the vast majority of investments through less than 20% of investments, so it is necessary to choose this 20% carefully, and then focus as much investment as possible on it. So, promote those good investments while no one gets bankrupt as a result of investment, as many have not been able to get rich from one approach. 

3. The Pareto principle in relationships:

Don't look for quantity in relationships, but focus on quality. You need relationships with the right people who have good relationships with you and with each other. Those people will support you when needed and at the right time. Do not assume that all your friends and relationships are of the same importance. So, focus your attention on developing the important relationships in your life because you alone cannot achieve success in any field.

For example, when you have a strong relationship with two people, and these two people have a strong relationship with each other, that is excellent, but suppose that these two people are not on good terms, then this is none of your business, and what you should focus on is your relationship with each one of them.

4. The Pareto Principle at Work:

80% of the value of any organization or company belongs to only 20% of its employees. Therefore, it is logical that high-performing employees receive higher salaries than employees whose performance is below average. However, this difference in performance is not reflected in reality, and we find that distinguished employees receive low salaries, while poor employees receive higher wages. 

How do you achieve a lot in a short time?

The secret to working fewer hours and making more money is picking the right task to do and doing the things that bring the most value in the sense that you specify the 20% of the effort that achieves 80% of the results, according to the Pareto principle, and in any field, 80% of the results are achieved by 20% of the people.

5. The Pareto Principle for Winning: 

There are few successful people in any field and many failures. You can choose to be successful by choosing the field, the appropriate work team for you, and the methods that lead to achieving success. So: 

1. You are more likely to win if you factor in things that increase your odds of winning without raising your performance.
2. You are more likely to win in areas where you won previously.
3. You are more likely to win when you choose your competitions carefully.

6. Pareto principle of time management: 

80% of tasks are done in 20% of the time allotted, and 80% of the time devoted to work leads to only 20% of the results:

Key information:

• Most of what we do results in low returns.
• Some small portions of the time we have are far more valuable than the rest of the time.
• Deal with time as a friend, inspiration, and valuable ideas often come to us when we deal comfortably and positively with time, and this means that our use of time is what matters and not time itself.
• If we can do something, and it must be something fundamental. There is no point in superficial changes, marginal or slight improvements in the way we invest in time.
• The Pareto Principle states that if we doubled the time we work on 20% of the highest-rewarding activities, we would be able to work just two days a week and increase our productivity by 60%.
• If we make a good investment of only 20% of our time, we will never be in danger of wasting time. 

So, abandon the previous concept that links gains to the amount of effort expended. Hard work usually does not lead to achieving what we want, rather, hard work has a low return. Instead, we must work smartly, not hard, and while doing the work we want to do, we will get a high yield.

You should be free from the obligations that others impose on you because it is impossible to benefit from your time unless you are able to control it, and you should also stop or reduce the activities that have a low return. Also, because the value of these activities is low, others may not notice that you stopped doing them, even if they noticed they might not care enough to force you to do them if they knew it would take a lot of effort on their part.

The 10 most time-losing investments:

1. Things other people want you to do.
2. Things you always do the same way.
3. Things you are not usually good at doing.
4. Things you don't enjoy doing.
5. Things you get interrupted before you get them done.
6. Things that few people care about.
7. Things took twice as long as you originally expected.
8. Things that require cooperation with unreliable or low-performing people.
9. Things that have a predictable cycle.
10. Answer the phone.

Top 10 time investments:

1. Things that help you achieve your main goal in life.
2. Things you've always wanted to do.
3. Things to which the Pareto principle relationship between time and results applies.
4. Creative ways to do things in half the time, or to do them with twice the quality of results.
5. Things other people tell you you can't do.
6. Things others have succeeded in doing in different fields.
7. Things that require creativity from you.
8. Things you can get others to do for you with minimal effort on your part.
9. Things that require cooperation with people who are really good at implementing the Pareto principle in investing in time and other innovative ways to invest in time effectively.
10. Things that cannot be put off.

7. The Pareto principle in business:

If you can determine how your company earns more than it spends, then you can take the risk and make a profit. Unless you have used the Pareto principle to reorient your business strategy, the strategy you adopt is definitely bad. As you will find that you do a lot of things for many people, the great importance may lie in a few things, and what you should do is always focus on these few things.

Likewise, a small number of clients are the ones that bring you the greatest returns. A few high-quality clients are the ones that achieve the economic surplus. Managers may like complexity because it raises challenge and enthusiasm in them, breaks the state of boring routine, and puts them in front of exciting responsibilities. As for client value, the value provided to clients is rarely measured and is always uneven.

Marketing Guide and dealing with clients according to the Pareto principle:

The company must focus on the right markets and clients, and their percentage is usually small compared to the company's markets and clients.

There are three main rules that the company, especially the marketing department, must adhere to:

1. Focusing on the most important 20% of the production line to provide a distinctive service or product, as this percentage generates 80% of the profits. 

2. Devoting exceptional effort to satisfy the 20% of clients who bring you 80% of sales or profits, by persevering in providing them with distinguished service and expanding the sales range.
3. Marketing a different product or service because you will only succeed in marketing if you do so in the sense that you must provide the target clients with either an exclusive product or service or you offer a competitive price that is much lower than what is available in the market.

Focus on the client:

Successful marketing focuses on a relatively small number of clients who are the most consuming of your product or service. The big deals are done with a few clients, while the majority of clients do a lot of deals, but of low value, so you can ignore the big percentage of clients and focus on the small percentage. 

You may think that focusing your efforts on high-value clients reduces profits, but it is these few high-quality clients who boost your profits during critical time periods. Profit does not in itself describe the quality of the company's work, but rather it is a reflection of the true measure that is represented in the strength and permanence of the company's relationship with its primary clients.

Bezos rule:

Amazon CEO Jeff Bezos says, “Most decisions should probably be made using about 70% of the information you can get because if you wait until you have 90% of the information on the topic, you may be very late in the decision-making process. 

Just gather 80% of the information, do 80% of the relevant analysis in the first 20% of the time, then make a decision that takes 100% of the time to do, and act decisively with the belief that the decision is 100% right.

The Pareto principle in project management:

How do you plan a project using the Pareto principle?

1. Write down all the major problems you are trying to solve, and if there are more than 7 problems, exclude the less important ones.
2. Hypothesize what the solutions might be, even if it's just a guess.
3. Work out what information to collect, or what operations to perform to determine whether or not your guesses are correct.
4. Determine the right people, method, and time to start implementation.
5. Re-plan after a short while based on the new knowledge you gained, and what is the difference between your guesses and what actually happened.

8. The Pareto Principle in Negotiations:

There are some points of particular interest:

20% or less of the points constitute the subject of negotiation, and more than 80% of the value of the subject under negotiation. This fact is clear to both parties, but in reality people are interested in achieving quantitative gains in negotiations, not qualitative gains. Likewise, they consider the concessions made by the other party a gain, even if it is of no value.

Therefore, before negotiating, write a list that includes what you are trying to avoid, and what are the points that appear to be gained, but are in fact of little importance, and these points must be illogical. Then in the final stages of the negotiations, make concessions on unimportant points in order to achieve the greatest possible gains on important points.

Do not rush to get into the core issues of the negotiations:

This is because most negotiations go through preliminary stages, and do not enter the scope of seriousness except in their final stages. For example, when asking for a salary increase during a 30-minute meeting, do not ask for an increase from the first minutes, but give the opportunity to your manager to feel that they have achieved certain gains before giving in to your request.