The list could keep going because there are countless opportunities to apply and combine this model - adopt it and quickly see how it becomes one of your most-used models. You could combine The Pareto Principle with Parkinson's Law, as you identify high-value actions to Timebox it's behind much of the advice captured in Patil's Project Principles use it to prioritise as you communicate to high-level stakeholders using Minto's Pyramid combine its understanding of imbalance with Probabilistic Thinking to gain a stronger understanding of complex situations. Yes, I know, that was getting pretty meta, but the point is this model is important. In fact, if you were to apply The Pareto Principle to Munger's Latticework of Models, this would be a model to make the '20' that delivers the '80' of your impact. Plus it combines well with many other models, so is an important addition to your Latticework. The Pareto Principle is a powerful prioritisation tool and possibly one of the most versatile models you'll find. This law identifies that you will reach a point on a project or task where the same energy will deliver diminishing results. In that sense, the Pareto Principle is a guide to strategically stop and say 'no', as you continue to focus on high value activities and investments. Observing the Inverse of the Pareto Principle also becomes a warning of the Law of Diminishing Returns. The useful many, the large number of remaining factors that collectively contribute a small amount of the problem or situationĭavid Allen, the creator of Getting Things Done, famously observed: "You can do anything, but not everything." In that context, the Pareto Principle is a wake up call to make hard choices about how to spend your finite time and energy.The vital few, or the small number of causal factors that account for the bulk of a problem or situation. In reality, the numbers will not pan out exactly, they serve more as a guide than a mathematical rule. 20% of your products will generate 80% of your profit.20% of your pitch will make 80% of the impact on your audience.20% of the bugs in your new app account for 80% of the crashes.20% of your clients account for 80% of your income.The Pareto Principle suggests about 20% of your activities will account for about 80% of your results.Īlso known as the 80:20 Rule or 80:20 Principle, The Pareto Principle would predict that: Kill perfectionism, get more done, increase your return on investment and so much more, with this simple and incredibly powerful mental model.
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