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There's a famous principle used in business; you've probably heard it. The Pareto principle (aka the 80–20 rule), named after Italian economist Vilfredo Pareto, states: for many events, roughly 80% of effects come from 20% of causes. In business, it means that 80% of your profits come from 20% of your customers. Since its discovery, this principle has found broad and surprising applications far beyond the business world. Here are a few examples: • 80% of crimes are committed by 20% of the criminals • 80% of crop yields are produced by 20% of the plants • 80% of health care resources are used by 20% of the patients • 80% of computer crashes are caused by 20% of the bugs • 80% of workplace accidents are caused by 20% of the hazards. If you apply this formula to your daily life, 80% of your goals are achieved through 20% of your efforts. The implication is that 80% of your time is frittered away on trivialities, distractions and less productive tasks. While you might argue the percentage, it's true that we all waste more time that we're aware of. Sobering, to say the least. But did you know there's more to Pareto? If you want to make the most of the Pareto principle, you can take it to the next level: the 80/20 rule squared. For non-math majors, this means: if you apply the 80/20 rule to just the top 20% of your customers, then about 5% of buyers account for half of your profit. When you apply this equation to your life goals, and you'll discover that 5% of your effort is responsible for half of your progress toward your goals. Whoa! It begs the question: If 20% of your effort gets you through your daily grind, and 5% gets you halfway to your goals, what would happen if you focused 100% of your time going after what you really want? In order to do that, you'd need two critical skills: • clearly knowing what's important to you. This means you can clearly articulate your values, and express them in every aspect of your life. That's your top priority. Every goal, in turn, becomes the pursuit of one or more of your values. • staying focused on what you want (i.e., not getting distracted from your top priorities); aka mindfulness, or staying in the present moment. When you are fully present, you have the ability to take a step back, see the bigger picture, and consciously choose actions that line up with your values. Today's Coaching Question: What can you do today to leverage Pareto squared for your maximum benefit? Judy Widener is a Certified Life Coach and author of Power For A Lifetime: Tools You Customize to Build Your Personal Power Every Day Of Your Life. You can sign up for Discovering Your Values, a 5-day e-course at no cost at http://www.myinnerfrontiers.com. Her passion is assisting her clients to discover what is most important to them, then to create more balance and satisfaction in their lives. She offers a comprehensive program that teaches clients simple ways to build their personal power and overcome obstacles to achieving their dreams. Judy has coached more than 600 people over the past 13 years. Her website is http://www.myinnerfrontiers.com.
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pareto principle, 80/20 rule, increasing profits, how to increase profit, values, priorities, mindfulness,
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