Occam & Pareto

by | Sep 12, 2018 | Strategy | 0 comments

In the self-help and personal development arena, tens of thousands of books and hundreds of thousands of blog posts are published each year (and this is one of them) in hopes of providing some insight that will help you achieve a breakthrough, accomplish your goals, or make some positive impact in your life.

80% or more of these books and posts tout some novel concept or miracle breakthrough or sometimes, laughably, a “new fundamental.” The truth is, the most valuable concepts you may learn this year are centuries old: the Pareto Principle and Occam’s Razor.

Pareto Principle (19th Century)

The Pareto Principle, better known as the 80/20 rule, states that 20% of the efforts are responsible for 80% of the results.

The observation is named after Italian economist Vilfredo Pareto who first noticed this phenomenon 1896 while studying Italian land owners. Pareto observed that approximately 80% of all land in Italy was owned by 20% of the population. He then expanded his study to other European countries and discovered that while the number wasn’t always exactly 80/20, the principle still held true.

Wealth distribution may have been the starting point, but the principle shows up almost everywhere:

  • 20% of salespeople earn 80% of the commissions (real estate, car sales, etc.)
  • 20% of software bugs are responsible for 80% of application crashes (Microsoft)
  • 20% of workplace hazards cause 80% of workplace injuries and accidents (OSHA)
  • 20% of patients use 80% of health care resources (AHRQ; US Dept. of Health & Human Services)
  • 20% of criminals commit 80% of crime (Dunedin Study)
  • 20% of the employees are responsible for 80% of my headaches (personal observation)

Occam’s Razor (14th Century)

Occam’s Razor states that the simplest solution tends to be the correct one. This concept gets its name from William of Ockham, a 14th century English theologian, who is widely credited with conceiving the axiom, though it’s hard to find evidence of it in his writings.

The “razor” portion of the heuristic is a reference to cutting away all unnecessary elements to get to the core of the problem and achieve the simplest solution.

What it means for you in the (21st Century)

Let’s say you want a raise, or a promotion, or you just want to find a way to be more productive. And you want something that is quick, easy, and fast-acting.

Occam’s Razor tells us that the simplest solution is usually the best answer and Pareto tells us that 20% of our efforts produce 80% of our results. With that in mind, examine the 20% of your efforts that produce 80% of your results and do more of that.

Here are some tips for the examination part:

  • Look back over the last 6 months to a year and think about those things that produced your biggest results. What work went into it?
  • Think back to your most recent raise or promotion. What was the catalyst?
  • What is the core reason you are on the payroll? What was the main reason you were hired?
  • What is the thing that you do that makes your boss the happiest?
  • Read articles and books by the most successful people in your field to see what they viewed as the most critical things they did to achieve their success.

Once you’ve determined the 20% and examined how much time you currently spend on those efforts, strive to double it and make the change effective today. Get the time you need to accomplish that buy pulling out the razor and hacking away at the other 80%.

For example, if you’re an artist of any kind, and especially once you start to achieve even a hint of success, you quickly realize that the business of being an artist balloons to a full-time job. Over time, less and less of your efforts are spent actually creating your art. Reverse that trend and hack away time from the business of being an artist that you can use to double the time you spend practicing your craft.

Or let’s say you’re a real estate agent. Good news! Gary Keller of Keller-Williams has already done the work for you in The Millionaire Real Estate Agent, identifying the Three L’s: Leads, Listings, and Leverage as the vital 20%. Double your time on any one or combination of the Three L’s in order to double your results (or better).

When the payoffs start to kick in, your productivity doubles, and you amaze your friends and colleagues, people will beg you to tell them how you did it. Let them know it started when you borrowed a 14th century razor.


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