Pareto-Principle

Methods Monday: The Pareto Principle. The Art of Recognising What Truly Matters

We all know the feeling of being incredibly busy and yet not really moving forward. The Pareto Principle invites us to take a step back and ask a crucial question: Where should I truly direct my attention in order to achieve maximum impact?

Not as a rigid rule.But as a thinking model for wise decisions.

What is the Pareto Principle?

The Pareto Principle, also known as the 80/20 rule, describes a recurring pattern: a small proportion of causes has a disproportionately large impact on the outcome.

The Italian economist Vilfredo Pareto originally observed this principle in the distribution of wealth in Italy: 80 percent of the wealth was owned by 20 percent of the population.

Later, it became clear that this imbalance between effort and impact appears in many areas of life and work.

Important: Not an exact formula, but a rule of thumb

The Pareto Principle is not a mathematical law. The distribution can also be 70/30 or 90/10.

What matters is not the number, but the idea behind it: there are a decisive few and many that are less relevant. And it is precisely this distinction that makes the principle so valuable, especially in leadership and decision-making contexts.

Typical Areas of Application of the Pareto Principle

The Pareto Principle can be applied to many different contexts. What matters less is the exact percentage and more the focus on impact and relevance.

In general, the following applies:

• A small proportion of causes has a large influence on the outcome.

• The 80/20 distribution is a rule of thumb, not a fixed measure.

Typical examples include:

• 20 percent of customers generate 80 percent of revenue

• 20 percent of products generate 80 percent of income

• 20 percent of costs account for 80 percent of total expenses

• 20 percent of complaints come from 20 percent of customers

In leadership and team contexts, the principle becomes particularly visible:

• A portion of topics consumes the majority of leadership energy.

• A few conflicts or unclear roles shape the overall team climate.

• A part of the workforce contributes disproportionately to productivity, stability, or culture.

• A small share of tasks is strategically decisive, while much of the work is operationally necessary but not direction-setting.

These observations are not an evaluation of people, but indications of where attention truly creates impact.

The Use of the Pareto Principle in Coaching

In coaching, I primarily use the Pareto Principle as a tool for reflection and decision-making. Not as a classic analytical instrument, but as an invitation to shift the focus from activity to impact.

Typical guiding questions include:

• Where does the greatest leverage currently lie?

• What consumes a lot of energy with comparatively little result?

• What should I focus on more strongly again?

• What may be consciously reduced or let go of?

In coaching, we first take a joint look at:

• Which topics, tasks, or tensions currently shape everyday life?

• Where does most attention and energy flow?

It often becomes clear that a few central topics have the greatest influence, for example an unclear leadership role, a recurring conflict, or a postponed decision.

The Pareto Principle helps to consciously name these decisive few and to allow oneself internally not to treat everything as equally important at the same time.

This turns “doing even more” into clearer and more conscious action.

Thinking Practically

Many leaders and self-employed professionals realise that the problem is not the quantity of tasks, but a lack of prioritisation.

The Pareto Principle helps to:

• Make bottlenecks visible

• Save decision-making energy

• Use responsibility more deliberately

• Reduce complexity without becoming superficial

Why the Pareto Principle Is So Effective

• It shifts the focus from activity to impact

• It provides mental relief• It supports strategic thinking

• It fosters conscious leadership

• It helps develop the courage to let go

Who Is This Method Particularly Suitable For?

• Leaders

• Self-employed professionals and entrepreneurs

• People with a high level of responsibility

• Anyone who often feels scattered or under constant pressure

Conclusion

The Pareto Principle is not a call for simplification at any cost. It is an invitation to make wiser decisions.

Not everything deserves the same level of attention. And it is precisely here that the greatest leverage for effectiveness, clarity, and relief often lies.

If you would like to find out where your personal decisive 20 percent lie, professionally or privately, I would be happy to support you in coaching.

Write to me or book an introductory conversation.

Yours, Johanna