Monday, January 10, 2011

Success Strategy - Applying Pareto's Principle

You have likely heard of Pareto's Principle, also referred to as the 80/20 rule...  which states that roughly 80% of the effects are derived from 20% of the causes.  The principle is named after Italian economist Vilfredo Pareto who, in 1906, determined that roughly 80% of the land was owned by 20% of the population, that 80% of the peas in his garden were produced by 20% of his plants.  In business, most widely accept that 80% of their sales come from 20% of their customers.  However, how does this relate to us and our potential success?

Consider the following... 

Many of us would love to be able to speak a second language, if not a third or fourth.  However, it may often seem like a huge challenge, requiring years of effort to achieve.  However, to be conversationally fluent in Spanish you would need to have a vocabulary of 2,500 of the high-frequency words.  With these 2,500 words you would be able to understand 95% of all conversations.  In order to get 98% comprehension, you would need roughly 5 years of study and tens of thousands of new words added to those core 2,500.    To obtain 95% comprehension though, you would only need approximately 5 months of study. 
  • 5 months of study for 95% comprehension
  • 5 years of study for 98% comprehension
If you want to pick up the basics of a foreign language, which method would you want to invest in?  2,500 words represents only 2.5% of all Spanish words.  Therefore knowing only 2.5% of the total subject matter produces 95% of your desired results.  This is the Pareto Principle.

Now consider this in light of the previous post in which we talked about the concept of  'good enough' as it relates to your potential success.  How much effort and input is truly required for me to reap the benefits and rewards that I want and need?  This is the key question we rarely take the time to ask ourselves and, as a result, end up either expending too much time and effort relative to the results achieved, or we fail to take action at all, believing ourselves unable (or unwilling) to invest the effort we believe is required.

Certainly there is a significant difference in the perceived effort required to learn Spanish between 5 months and 5 years.  One's interest and commitment level certainly would need to be high to invest 5 years of study.  The biggest barrier most clients erect to their taking action on a desired goal is the 'lack of time'.  We only have so much time available to us each day, week and month with multiple demands for its use.  All too often we look only toward increasing our time management skills through the use of more efficient 'systems' for organizing our activities.  Instead, I invite you to be more strategic in the application of your time in the first place. 

The Work:

  1. If 80% of your results come from 20% of your efforts - you had better be very clear about what that 20% represents and ensure that your better-than-average efforts go here.  For other areas apply the 'good-enough' principle!  Less effort in these areas will not diminish your net results, in which case extra effort is a useless expenditure.
  2. In any task consider which efforts contribute toward the final desired results.  These are your core energy expenditures.  Any other activities should be minimized, if not eliminated.
  3. Consider also what your true end-goal is.  We have the number 100% imprinted in our heads...  we feel that we must do everything to 100%.  However, it is not only not always a realistic goal, it is often not practical.  If our goal is to be functionally bi-lingual in Spanish, then it does not require 100% comprehension.  5 months of study, netting us 95% comprehension is enough to have us up and running.  Additional time and effort is required to take us to 100% but in no way is it needed for us to be successful.  This extra time up front can save you significant time in the long run and have you enjoying your successes much sooner.
  4. Adopt a selfish attitude when it comes to your time.  Your time is finite.  All too often we act and behave in ways that would indicate that our time is infinite and unimportant.  However, it is a central component to our own success and needs to be treated as such.  Therefore, ensure that you are not spending 80% of your time working to enhance someone else's success instead of your own.  You need a clear vision of what you want to achieve and what actions are necessary to get there.  80% of your time (minimum) needs to be spent fulfilling these objectives.
As to methods, there may be a million and then some, but principles are few.  The man who grasps principles can successfully select his own methods.    Ralph Waldo Emerson

1 comment:

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