Jory MacKay on February 28, 2023 What is the 80/20 rule in project management? (and how to use it)
Whether you’re at a scrappy startup, massive enterprise company, or somewhere in the middle, there’s a depressing truth you need to acknowledge: Most of what you do in a day won’t matter.
No, we’re not trying to be pessimists — rather, it’s all a matter of simple math.
Time and time again, across industries and markets, the 80/20 rule (also known as the Pareto principle) shows that 80% of your success comes from just 20% of your effort.
In other words, the results you get in your life, or on your project, come from just ⅕ of the work you do. This phenomenon has shown up in everything from psychology to economics and business.
The biggest problem? How do you know which 20% actually drives those results?
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Understanding the 80/20 rule can help you become more efficient, rocket past competition, and avoid unnecessary burnout. In this guide, we’ll explain what the 80/20 rule is, why it’s so important, and how you can use it to turbocharge your performance and the performance of your wider team.
What is the 80/20 rule? Why is it so important?
The Pareto principle shows that, in many circumstances, roughly 80% of consequences come from 20% of causes. These causes are known as the "vital few."
The phenomenon was originally observed in studies by Italian economist Vilfredo Pareto. Pareto studied the land and wealth distribution across Italy and discovered that 80% of the wealth was controlled by 20% of the people.
Over time, the logic underpinning the Pareto principle has appeared in many places, including broader economics, business, law, and technology. Here are a few modern-day examples:
- 80% of business revenue typically comes from 20% of customers
- 20% of a product’s features drive 80% of the total product usage
- 20% of the workforce delivers 80% of the productivity
- 80% of a product’s downtime is caused by 20% of the bugs
Understanding and applying the Pareto principle to your work and life can help you unlock a range of benefits, such as:
Outsized returns on your efforts
We’ve all heard the saying ‘work smarter, not harder’, and the Pareto principle can help you do this. By identifying the 20% of things that really matter, you can focus on those to unlock positive outcomes faster and stop wasting time on non-value-adding activities.
Avoiding burnout from low-value work
Burnout is a big problem in project management thanks to the high-pressure nature of the work. By applying Pareto principles, and focusing solely on the value-adding work, you can reduce your chances of overwork, stress, and fatigue.
Clarifying your priorities
The Pareto principle is also a great way to bring clarity to your priority setting. If you understand that 20% of your energy will deliver the best results, you can prioritize which tasks to complete when you’re feeling your best.
This will not only help you prioritize better, but help you become less indecisive, overcome mental blocks, and enhance your organizational influence.
Push your product’s strategy forward
Maximizing productivity, improving prioritization, and reducing stress are great building blocks to help you execute your product strategy. Focusing on the right things, that deliver quickly, will help you build a product that adds value to users and keeps them coming back for more.
3 ways to use the 80/20 rule to maximize your team’s results
Finding your “vital few” can sound like a magic bullet. And in many cases, it is. However, applying the 80/20 rule to your business or project isn’t a simple process. It takes a high level of self-awareness, product knowledge, and market foresight to know what work will bring the biggest results.
80% of your success comes from just 20% of your effort.
However, there are some tried-and-tested areas of your business that can benefit from the Pareto principle, including team productivity, problem solving, and product strategy.
Let’s look at each area and discuss how you can start to implement the 80/20 rule today:
1. Improving team productivity
The best way to help your team be more productive is to help them identify the tasks that will add the most value. Focusing on critical tasks ensures the most important work gets done each day, helping you take the biggest step toward your collective goals.
How to apply the 80/20 rule to boost team productivity:
Ask everyone to list their daily tasks. First, begin by asking each of your team members to list the tasks they’ve got on. Depending on the type of work your team does, these could be ongoing ‘business-as-usual’ tasks or tasks for their project. Ask them to estimate roughly how long each task will take. If you use a project management tool like Planio, you can quickly see all tasks assigned to a team member and add estimated times to them.
Rank each task based on importance and urgency. Next, ask your team to rank the tasks based on their importance and urgency. A great way to determine importance is to think about the consequence if it isn’t completed. If there’s a low consequence, it’s probably not that important. Urgency is all about ‘when’ it needs to be completed — the sooner the deadline, the more urgent it is.
Plot the tasks and focus on the value. To finish, plot the tasks in an Importance/Urgency matrix to help visualize what drives the most value. Naturally, only a smaller percentage (spoiler alert: probably around 20%) will appear in the top left and should command most of your effort. The top row is where the team should focus their efforts, only dropping down to the bottom row when required.
Did you know? Studies show that the average office worker is only productive for 2 hours and 53 minutes a day. With such a small window of productivity, it’s even more important to identify and execute the work that’ll bring the most value.
2. Speeding up problem solving
Even when you’ve listed and prioritized your tasks, sometimes there’s problems that come up that simply need fixing. The Pareto principle can also help you with problem-solving, providing a way to analyze the issues and choose which ones to fix first.
How to apply the 80/20 rule to assist with problem-solving:
- Understand the root cause of the issue. If we apply the principle of Parerto, 80% of your company’s issues are caused by 20% of incidents. If you’ve got problems to solve and decisions to make, first start by understanding the root cause of the issue in front of you.
- Find the root cause of most problems. Once you understand the root cause of all of your problems, next it’s time to look for trends and commonalities. If one particular cause is creating problems in multiple places, these are the ones you want to fix first.
- Fix, assess, and re-fix. From there, implement your fixes and monitor the results. It’s unlikely that you’ll get it right the first time, so assess the effectiveness of the outcomes as you go. But remember, sometimes you don’t need to solve every single problem. If a cause isn’t causing a high volume of problems, chances are it isn’t a priority, and you should focus your 20% elsewhere.
Did you know? In a survey of senior executives, 36% of organizations require complex problem-solving skills as a core skill. If you can master Pareto, not only will you boost your chances of success, you’ll be in high demand!
3. Clarifying your product strategy
When developing a new product, you need to build features that users actually want to use. Especially if you have a lot of users, it can be hard to see the wood from the trees and understand the right way to move forward. But like with problem-solving, Pareto is great for helping you set your product strategy.
How to use the 80/20 rule to build your product strategy:
- Get feedback from users. To begin, we’d recommend taking a user-focused approach to building your strategy by asking for customer feedback on their needs and use cases. This will help you understand how users want to use your product and the features that will help them the most.
- Identify the top 80% of use cases. While some users may have niche requirements, there’s a good chance that when you analyze your feedback more broadly, there will be a few that stand out. In the spirit of Pareto, look for the features that will benefit the most users, as they will be perfect for your 20% optimal effort.
- Plan, strategize, and execute. As you aggregate the top features together, you’ll start to see trends and patterns in what users want. This will help you crystalize the long-term strategy for your product, helping you build out North Star Metrics, critical KPIs, and, if your product is new, your go-to-market strategy.
Did you know? Recent statistics on new products showed that only 40% of them survive in the market — and of that 40%, only 60% actually achieve any revenue. This goes to show that getting your strategy right is super important for product success.
How to get the benefits of the 80/20 rule in all aspects of your life
When it comes down to it, the 80/20 rule is just a powerful framework for helping you analyze and prioritize your workload to make sure you’re doing the right things.
But the 80/20 isn’t just useful for work — it can be applied to your personal life, too.
Whether it’s fitness, health, relationships, or learning a new skill, the key to maximizing the power of Pareto is to focus on the 4 C’s: Clarity, Competency, Concentration, and Constraints.
Here’s how you can apply this powerful principle to all areas of your life:
- Clarify your vision, objective, or goals. To harness the power of 80/20, you first need to know what you want to achieve. Is it more money? A better work-life balance? Mastering a new skill, such as a foreign language? Before you even think of doing some analysis, clearly articulate your goals, what you want to achieve, and when you want to achieve it.
- Understand your path to competency. Next, you need to work out the most efficient way to get from where you are now to where you want to be. Using some of the techniques we saw earlier, break down the tasks/learnings/improvements you need to reach your goal. To find the 20% of value-adding answers, speak to people who have achieved what you want and ask what worked for them.
- Concentrate on what matters most. Now that you know what you need to do to achieve your goals, it’s time to go all in on making them a reality. Concentration matters here to ensure you maximize that 20% of your effort. Naturally, there will be times you lose focus or motivation, but if you apply yourself fully, you’ll undoubtedly see results.
- Look out for constraints and blockers. Remember, the path to success won’t be a straight line. There will be bumps along the way, with factors out of your control constraining you too. As we saw with our approach to problem-solving, you can use the 80/20 rule to identify and eliminate the critical barriers that may be blocking you from meeting your objective.
Remember: The 80/20 rule is a concept, not a law
As you start to apply the Pareto principle to different aspects of your life and work, it’s important to remember that it’s not set in stone. Instead, it’s a concept you should follow to prioritize work, maximize efficiency, and reduce waste.
Don’t forget that:
- The other 80% is still important. While you want to get to the most valuable 20% of any strategy, project, or task first, the other 80% is still important and needs to be addressed. Only focusing on high-level, needle-moving work means maintenance, updates, and other equally important work can get missed.
- Don’t get caught up in the percentages. 80/20, might also look like 75/25 or 85/15 in your world, but the overriding concept is still the same. As you analyze your own world, don’t get caught up in trying to fit squarely into specific percentages, and instead, focus on identifying where the majority of your outcomes are generated.
- Use Pareto alongside other tools. Pareto is a great way to identify, manage, and optimize effort, but it’s not a silver bullet. Other productivity systems such as timeboxing, Pomodoro, or Getting Things Done are also fantastic at helping you actually execute your work. So, spend time finding the right systems to help you manage your efforts and deliver great results.
Understanding that most of your outputs can come from such a small percentage of your efforts, can be a real game changer.
The bottom line: 80/20 is your way to a better future
For many, the 80/20 rule can be a hard pill to swallow. How can it be that only 20% of your effort delivers 80% of the results?
But, when you understand that most of your outputs can come from such a small percentage of your efforts, it can be a real game changer when it comes to productivity.
This is especially true when delivering projects, as for most project managers, time is at a real premium. Pareto is great for helping you identify critical tasks, solve problems, and prioritize the high-priority deliverables within your project or product.
And, of course, once you’ve finished your Pareto analysis, you need somewhere to manage your most important work. Planio is the perfect tool to track your tasks, prioritize work, and plan sprints.
Try Planio free for 30 days — no strings attached — and see if it’s right for you.
