By now, everyone has heard of the Pareto principle. You probably know it by the more common name: 80–20. In simple words, it means that 80% of the results are produced by 20% of the action.
For those of us interested in optimizing our success and being the best possible version of ourselves, 80–20 is a godsend. We can get more done, more efficiently, if we focus on the 20%
However, everyone is getting one thing completely wrong. Just like anything else, 80–20 is a skill. It takes time and effort to learn how to do it correctly.
In my office, everyone claims to 80–20, but there’s only one person who truly knows how to do it well
The average person in my office is easily at the 80 hours a week level. However, the undisputed ‘best’ employee in the office works ~35 hours a week. No one knows this, but he’s a close friend who confided in me.
Everyone in the office “does” 80–20. The reason why he works half the amount of time than everyone but gets better results is that he understands 80–20 is a skill.
Why 80–20 is a skill
The beauty of 80–20 is undeniable. Work 20% of the time but get 80% of the results. Most advice stops there.
But here’s the thing: for 80–20 to work, you need to be able to identify what the right 20% of actions are!
Let’s use an example:
You have work to get done today. There are 100 things you need to do. Let’s call them 100 actions.
Those 100 actions can result in a maximum of 80 new customers today. Some of those 100 actions will result in 0 new customers. Some of those actions will result in several new customers.
Now, pick which 20 of the 100 actions you are going to do.
Pick right, and you get 80 new customers. Pick wrong, and you’ll get no new customers.
Don’t know which 20 actions to pick? Well, there are 100 possible actions, so you have a 1-in-5 chance of picking correctly! Best of luck!
Being good at picking the right actions to take is why 80–20 is a skill
80–20 only works if you pick the right 20% of actions to take. In almost every circumstance, people choose the wrong 20%. To get good at 80–20 and to maximize your results, you need to learn the right 20% to pick.
Let’s return to the example in my office. Remember, a friend knows that 80–20 is a skill and works less than everyone else.
Here’s how most people in the office do 80–20:
- Problem: I need to design a product launch strategy
- Analysis 1: Utilize 80–20
- Analysis 2: Utilize 80–20
- Analysis 3: Utilize 80–20
- Analysis 4: Utilize 80–20
- Analysis 5: Utilize 80–20
Here’s how my friend does 80–20:
- Problem: I need to design a product launch strategy
- Utilize 80–20
- Analysis 4
Being good at the 80–20 skill means utilizing it at a macro level
My friend looks at the overall problem and looks for the 20% of work to result in 80% of the result. In this case, he sat down and realized that Analysis 4 would provide most of the answer. So he completed Analysis 4 and was out the door at 4:30.
The others are trying to solve this problem and also think they’re using 80–20. They think of the five different analyses to provide the answer. But, they do 80–20 on each analysis. This saves them some time, but they’re still out the door at midnight because there are five different analyses to do.
The difference here is those who recognize 80–20 is a skill use it’s principles on the overall problem. Those who aren’t as good use 80–20 on each action.
The lesson here is this: 80–20 is a fantastic tool to make you more productive. You need to use it on the right 20% of action. The right 20% of action is always on the macro level
So how do you know what the macro level is?
Use the ‘5-year-old’ test to figure out what the macro-level of 80–20 should be
So you’ve decided to use 80–20 on the macro level to increase efficiency! That’s fantastic! Let’s figure out now how to find the right macro level.
To do so, I strongly recommend the “5-year-old test.”
The 5-year-old test is simple. All you need to do is imagine you are explaining your objective to a five-year-old. As a result, your purpose needs to be simple enough for a five-year-old to understand.
This statement below would fail the five-year-old test.
I’m redesigning the sales memo to increase conversions
What five year old is going to understand that?!
Don’t get me wrong, that could be a great way to drive growth in your organization. But if you’re focusing on how to 80–20 that memo, you’re using 80–20 on an action rather than an objective.
It’s the same as the example above: you’re doing 80–20 on the five different analyses!
Let’s try it again in the five-year-old test.
I’m trying to get more sales
In this case, every five year old should be able to understand that!
Now the power of 80–20 can kick in. What are the 20% of actions that will result in 80% of the results?
By focusing on this macro level, you’ll understand what you should be doing to best capture the power of 80–20.
80–20 is a skill to apply it at a macro level, but it can be learned
Just like everything else in this world, being good at 80–20 is a skill. Fortunately for those of us interested in personal development and self-improvement, it’s one of the more natural skills out there to learn!
The trick is to change your frame of reference. Rather than using 80–20 on actions, use 80–20 on the objective. This subtle difference in thinking will help supercharge your results and allow you to focus on the key ways to deliver 80% of the value for 20% of the results.
The five-year-old test worked great for me. Give it a shot and let us know if it worked for you too!