Most of the things you do don’t matter.
Yup, that tweet you’re reading. No impact.
The presentation you just edited. No one’s going to read the slide.
And that feature you just shipped. Crickets.
As you’re taking a mental inventory of all your activities, this may feel a bit harsh.
But the Pareto Principle states that for many outcomes, 80% of the of consequences come from 20% of causes.
Take your company’s revenue.
80% of your company’s revenue, probably comes from 20% of your clients.
If you’re a manager, take a look at your direct reports.
Do 80% of your personnel issues come from 20% of your personnel?
Or does 80% of your team’s output, come from 20% of your team?
Now clearly, it’s a rule of thumb. But an expansive (and incisive) one. One that covers careers, happiness, health, relationships and economics.
It’s also the perfect starting point to identify a critical ingredient in $10K Work: Leverage.
The Pareto Principle applied to health
Two years ago, I learned that I was pre-hypertension. (Aka on the cusp of high blood pressure.) Yup, despite 90 minutes of daily exercise, a flexible/low-stress job and tons of daily “self-care” it was recommended that I consider a low-dose of medication.
But first I did some research. I went on Reddit threads. Made an obligatory pilgrimage to WebMD. Talked to friends with similar conditions. Other doctors. Nutritionists. Even spiritual healers.
It turns out that for this pretty common cause, there’s a lot of potential remedies:
- Garlic pills
- Hibiscus tea
- Chinese herbs
- Breathing exercises
- Fish oil
- Celery juice
- Meditation
- A stress-reducing breathing contraption
(PLEASE NOTE: THIS IS NOT MEDICAL ADVICE, IT’S ONE PERSON’S EXPERIENCE!)
I tried them all. I measured my blood pressure daily. And amidst all that noise, one thing worked EXTREMELY well: getting an extra hour of sleep each night.
Since I was testing this daily, it was the only thing I needed to do.
And there you had it, 80% of outcomes (lowered blood pressure), were driven by 20% of inputs (sleeping an extra hour).
Examples of the Pareto Principle in the wild
Sticking with the aforementioned example, I learned that 80% of the inputs (pills, teas, breathing machines) were trivial. Surely they helped at the margins, but they didn’t move the needle.
Which lead to a stunning revelation. We’ve been conditioned to believe that to get more “outputs” you need more “inputs.” We also get lured into believing that all inputs contribute equally to the output. So if you have 10 inputs, each one contributes 10%.
That ain’t true.
We’ll show below how that can empirically disproven. As the hypertension example shows, 1 input contributed to the entire desired outcome.
Just like the fact that the Vans logo looks like the square root of ANS, the Pareto Principle is something you can’t see.
Business examples:
- 80% of sales come from 20% of products
- 80% of defects come from 20% of causes
- 80% of website traffic come from 20% of web pages
- 80% of feature usage come from 20% of features
- 80% of crashes come from 20% of bugs
- 80% of customer referrals come from 20% of referees
Socio-Economic examples:
- 80% of stocks are owned by 20% of households
- 80% of tweets come from 20% of accounts
- 80% taxes are paid by 20% of households
- 80% of crimes are committed by 20% of criminals
Everyday life examples:
- 80% of clothing usage come from 20% of your closet
- 80% of wasted time comes from 20% of websites you surf
- 80% of your happiness comes from 20% of your relationship group
- 80% of happiness come from 20% of activities
You can see how this principle underpins the $10K Work Method. While it’s a rule of thumb, it’s a perfect lens for identifying what you should double-down on. And what you should eliminate.
Take happiness. If 80% of your activities are barely making a dent with your happiness, what does that mean? And what about that 20% that makes you light up. What are you going to do with that information?