The Pareto Principle
I love all those folksy scientific-mathematic principles like “A son will always grow up to be at least as tall as his mother,” or “The length of a person’s forearm is equal to the length of his foot.”
The Golden Mean, which describes the proportions creating natural phenomenon like the coils of a fiddlehead fern or the spiral design of a nautilus rocked my world when I learned about it in college. The Pareto Principle is another fascinating bit of math trivia, and one that can offer us a fresh perspective on our time and our possessions.
In 1906, Italian economist and sociologist Vilfredo Pareto noted that 80 percent of Italian land was owned by 20 percent of the population. The Pareto Principle, also called the 80/20 Rule, was born and is now applied to a wide variety of economic and sociological truths, such as:
• We regularly use only 20 percent of what we own (a look into any American garage will bear this out);
• We wear 20 percent of our clothing 80 percent of the time;
• Eighty percent of profits come from 20 percent of the products a business sells; and so on.
The 80/20 is shorthand; it could be 70/30 or 90/10, but there is definitely a principle, sort of like diminishing returns, at work.
We can use this principle by taking a good look at how we use our time and our material things. With regards to clothing, the principle helped me immensely when I realized that I spent 80 percent of my clothing budget on items I wore less than 20 percent of the time. I’d been taught that a woman should spend money on special occasion items and that everyday clothing, the stuff we really live in, should not be expensive.
When I turned that around and started spending much less on — or borrowing — rarely-worn stuff (ski clothes, evening clothes) and splurged for better quality and style on the items I wear all week long, I discovered I felt better about my appearance and how the money was spent.
With the Pareto Principle in mind, we can also look at the bulk of our possessions, especially things that are constantly in our way or that are up for re-evaluation due to a move or whatever, and make more informed decisions about whether to keep or let go.
For example, does it make sense to use 90 percent of your storage space for holiday items that are displayed only less than 10 percent of the year? If it makes that 10 percent of the year 90 percent more joyous, than it’s an obvious “yes.” But if not, consider reducing to 70 percent of the space or less, until the ratio feels appropriate.
Time management can also benefit by an awareness of the Pareto Principle. You can cut the fat from your schedule by noticing what 20 percent of your time is spent the most effectively.
Tim Ferriss, author of “The Four Hour Work Week,” suggests things like figure out who the 20 percent of your customers are who bring in 80 percent of your income and focus more on making them happy.
At the same time, identify the 20 percent of customers who do 80 percent of the complaining and create drag on the business, and let them go.
Ferriss coaches readers to value efficiency and well-directed focus over the 9-to-5 butt in the chair. The challenge in working more than 80 percent less would be how to fill all the free time. May I suggest cleaning out the garage?