May 28, 2024

We all have one, precious, life. In our limited time on Earth, how we choose to spend our days matters a great deal. Many experts advise us to be more efficient, but there’s another side to the coin: being effective. Efficiency is about getting things done quickly, while effectiveness is about making sure those things are the right ones to accomplish our goals. As the famous management consultant Peter Drucker once said, “There is nothing so useless as doing efficiently that which should not be done at all.”

The Challenge of Knowing What’s Right

Figuring out what’s truly important can be tough. One method that’s often trusted is the 80/20 Rule, also known as the Pareto Principle.

The 80/20 Rule suggests that in many situations, a small portion of your efforts or factors lead to most of your results. For example, 80 percent of the world’s wealth is owned by just 20 percent of the population. In sports like the NBA, 75 percent of championships are won by only 20 percent of the teams. The numbers don’t have to add up to 100; the key idea is that a few things have a big impact.

Making the Most of the 80/20 Rule

When you apply this rule to your life, you can identify what truly matters — the “vital few” among the many.

For businesses, this could mean focusing on the handful of clients who bring in most of the revenue, while letting go of less profitable customers. It can also be useful in problem-solving, as you may discover that the majority of your problems are rooted deep in just a few key ones.

In essence, the 80/20 Rule is like judo for life and work — it helps you put the right effort into the right areas, achieving more with less.

The Hidden Trap

However, there’s a catch to relying solely on the 80/20 Rule. Let’s take a look at Bill Gates’s choices, one of the wealthiest individuals in the world, to understand this better.

Bill Gates had already achieved immense success with Microsoft, amassing a fortune through the software giant. If he had followed the 80/20 Rule, it would have steered him towards investing his time and energy to expand his tech emperor. The analysis might have even suggested maximizing earnings for charity, like UNICEF.

But here’s the twist: he didn’t just want to be a tech entrepreneur; he wanted to make a difference in the world and change the global health and education system. The 80/20 Rule would have never advised him to dedicate more of his time and resources to philanthropy and start the Bill and Melinda Gates Foundation, founded for a cause he deeply cares about, as the most effective use of his time in 2000.

The downside of relying solely on the 80/20 Rule is that it often pushes us to stick to what’s worked in the past. It calculates effectiveness based on recent achievements and current opportunities.

Let’s look at another example. Consider Jeff Bezos, who worked on Wall Street and climbed the ladder to become the senior VP of the hedge fund. If he had applied the 80/20 Rule in 1993, starting an internet company wouldn’t have made the cut. At that point in time, there is no doubt that the most effective path — whether measured by social status, financial gain or otherwise — would have been the one where he continued his career in finance.

In essence, the 80/20 Rule tends to encourage us to repeat what’s brought success in the past. It doesn’t naturally lead us toward new and unexplored opportunities. It will only help you to find useful things based on your past. But if you do not wat your future to be more of your past, you have no other way but to help yourself to find a different approach.

The downside of being effective is that you tend to focus on improving what has worked in the past rather than considering how to achieve new heights in the future.

Where to go from here

The good news is that with practice and dedication, seemingly ineffective endeavours can become highly effective over time. We become skilled at what we invest time in and practice.

Bill Gates, who initially scaled back his tech career to start Gates Foundation, later saved 112 million lives and provided prevention, treatment and care services to hundreds of millions of people, something he wouldn’t have achieved by pursuing his tech career. Since the founding of the Global Fund, AIDS deaths there have fallen by 75% and malaria deaths by 57% in Uganda.

The journey of learning new skills, starting new ventures, or exploring uncharted territory often feels inefficient at first. Compared to tasks we’re already good at, the new endeavour seems like a waste of time and unlikely to pass an 80/20 analysis.

But that doesn’t mean it’s the wrong choice. In fact, embracing new challenges and opportunities can lead to personal growth and accomplishments that go beyond past successes.

While the 80/20 Rule is a valuable tool for optimizing existing tasks, it should be paired with a forward-looking mindset. Don’t let the pursuit of efficiency in familiar territory blind you to the potential for effectiveness in new and uncharted waters. Embrace the challenge of learning, growing, and stepping out of your comfort zone. The path to effectiveness often lies in pursuing the unknown, even when it seems inefficient at first.