Hello, dear reader.
Together we are moving forward pretty fast. We have viewed topics such as how to start Your own road to success and how to change Your attitude. Once You have find out that You are interested in being successful and ready to take an action, then we can move even more forward and look at one principle that can significantly increase Your efficiency of Your action in field You have chosen.
These „The road to success” topics are my personal attitude and idea, I find this important and worth sharing.
This principle with name „The 80/20 principle” (also known as Pareto’s Law) states that for very many events almost 80% of the effects come from 20% of the causes. The author of this principle is Italian economist Vilfredo Pareto (1906). Nowadays Richard Koch is trying to show how important this principle can be. He had published the book called „The 80/20 principle”. For example, Pareto found that 80% of the land in Italy was owned by 20% of the population. There are many examples from different life situations when the principle 80/20 actually works. This principle represents all aspects of life and by paying attention to Your efforts and results, You can identify major opportunities for improvements of Your life. This principle could be critical for business. So let’s have a look.
For instance, You are a manager of a pizza company and You should think how to improve it’s efficiency of sales. You look at those results and see that there are ten customers which stands for 100% (100 pizzas) of purchases. You also see that top two buyers are Lisa and Eric, who both make 80% of purchases. They both have bought 80 pizzas. Those other 8 customers make only 20% of sales – totally buying only 20 pizzas which represents only 20% of all sales. You as a manager should make a suggestion for improvement. You take a look at those stats and by knowing „The 80/20 priciple” You know what to do. Company should focus on Lisa and Eric as a VIP customers by providing a great service for them first of all, because they make 80% of all income. You can call Lisa and Eric by asking which taste of pizza they would like to see as a new one. You should call because there is a great opportunity that Eric and Lisa will continue to make 80% of income even further.
Let’s have a look at the Pareto principle from different point of view.
20 percent of clothes in a wardrobe are worn 80 percent of the time.
20 percent of the tools in a toolbox are used in 80 percent of tasks.
In fact the Pareto principle does not demand that the 80:20 ratio applies to every situation and neither is the model based on a ration in which the two figures must add up to 100. There are possible ratio like 70:30 or even 65:35, but even then it’s worth trying to figure it out which of 35% of actions provide 65% of results.
In other words, try to find out what’s important for You in Your favourite field and where are You the most effective and try to focus more on that kind of actions. If the field You would like to work in is personal, then the measure could be satisfaction. If You have Your own business, then profit.
Try this for Yourself and let me know how it goes, my dear friend.