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How to use the Pareto principle

the Pareto principle

Because we know that time management is essential to bring each project to a successful conclusion, today we are developing a key strategy. We tell you how to use the Pareto principle: what it is, what its benefits are and tips for applying it.

What is the Pareto principle about?

This principle states that, in general, 80% of the consequences come from 20% of the causes. In other words, a small percentage of actions usually have a huge effect on the results achieved. This can apply to business, time management, economics, etc.

Two classic examples of this principle could be the following: 80% of a company’s profits come from 20% of the clients, and only 20% of the projects generate 80% of the problems.

Also, it should be clarified that you should not misunderstand this principle; it refers to the causes and consequences, and not to the amount of effort invested. Some confuse it by believing that with 20% of the effort they will achieve 80% of the results. Actually, you should spend 100% of the effort on 20% of the causes, to achieve 80% of the desired consequences.

In a nutshell, if your work can be segmented into smaller parts, the Pareto principle will help you identify which ones are most relevant to the outcome.

How to apply it?

The key is to identify the elements that have the greatest impact and then be able to prioritize them. Once these elements are prioritized, dedicate the necessary time to them, since they correspond to the most important aspects.

Regarding time management, for example, identify the tasks that will make your team more productive (they are the ones you have to do first). You could prioritize the estimated impact with a ranking of high, medium, low, or a number from 1 to 5, or any other measure that is representative.

The Pareto principle could also be applicable to a company’s profits. Determine the clients or projects that represent 80% of your profits. And then prioritize the attention you will devote to each one.

For project management, when you have to develop several different functionalities, we recommend recognizing which ones are the most important for the client. From that more or less prioritized list, assign a value to each functionality, guided by the strategic importance for the stakeholders. Then try to address its development in the first iterations of the project.

Main advantages

  • Get clear priorities.
  • Achieve higher productivity.
  • Keep the focus on strategic activities.

To sum up

If your work can be divided into different parts, we encourage you to use the Pareto principle. This strategy will be quite useful for you both to manage time, different projects and to organize your business. We remind you that with MyTaskPanel you can prioritize your task lists and maintain a global vision of the projects.

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