Pareto’s Principle refers back to the observations of the Italian economist Vilfredo Pareto who created a formula describing the unequal distribution of wealth—that 80 percent of Italy’s wealth belonged to only 20 percent of the population. More generally, it’s the idea that most things in life are not distributed 50/50. The rule can have huge consequences and help people identify where they should focus their energy and money—on the 20 percent that can have the most impact.

Pareto’s Principle is everything to me. I use Pareto’s Principle in almost every single conversation I have with almost every person in my company. My entire world is a function of Pareto’s Principle.

There is never enough time. I have my business, I have a personal life, I have my health to take care of, and I’m having to continuously make very, very difficult decisions. And that’s where I think some individuals will fail—not being able to understand what is important.

• Customers. 20 percent of your customers are giving you 80 percent of your grief.
• Employees. 20 percent of your employees are causing 80 percent of your problems, taking advantage of you, cutting corners, not telling you what’s going on, causing conflict.
• Family members. 20 percent of your family members are causing 80 percent of your stress.
• Focus energy and time on priorities. Is this something you should focus on right now? Learn to recognize the 20 percent of things that give you the 80 percent return and focus on those projects—one task at a time. If I spend 100 percent of my time on the one thing that’s important to me, even if that’s not the most important thing to somebody else, can you imagine what I’m going to have a year from now? I cannot do anything more than the one thing that’s important to me that follows the 80/20 Rule. Of course, you have to have a goal—and you’ll need to use Pareto’s Principle to establish the goals that are going to give you the greatest satisfaction.
  

Prioritize your goals into #1 and #2. Don’t even think about anything that’s not a #1 goal. Prioritize your #1 goals, into 1s and 2s, and only focus on the 1s. Opportunities will present themselves because you’re not wasting your energy on the 80 percent that’s not important.

You need to take all the tasks that you have accumulated, and you need to establish which of those tasks are going to get you to your goal. Then focus on those projects that give you the biggest return on your investment. You can only focus on one project at a time. Focus on what’s important, put 100 percent effort in there, don’t get distracted. And at the end of your life, you will have done the best that you possibly can.
—Mike Holt