Home » Beyond The Pareto Principle: The Simple Way To Get Much More Out Of Life

Beyond The Pareto Principle: The Simple Way To Get Much More Out Of Life

I want to share a simple idea that might change how you think about your business, your health, your relationships and living your life in general.

This idea will be tricky to implement, but the results will speak for themselves. Not to set expectations too high 🙂, but I believe that the idea I’m going to share with you really does have something to it. It’s all about getting more out of less.

It’s not a new idea. Some people have referred to it as The Pareto Principle, aka the “80/20 rule.” It states that most of the outputs in life are generated from a minority of inputs. This is generalized to imply that 80% of the results tend to come from 20% of the activities.

When you think about simplification and productivity, what do you think about? Most people think about trimming the fat, reducing the slack and doing just as good, with less effort/activity/input.

Achieving such an outcome would be a great result, wouldn’t it?

For example, if you work 40 hours a week and you get a certain result, imagine if you worked 30 hours a week and got the same result, or even a slightly lesser result, but saved a bunch of effort. That would be a good thing, right?

What if you could do even better?

What if you could, by doing less work, not only achieve the same outcome but a much better one, by doing far less than you thought? That’s the idea I want to talk about today. The idea of getting more out of less. Pareto’s Principle taken to an extreme.

To help get your mind around this concept, I would like to share a few examples of how this idea plays out in life already, from the worlds of finance, business and nature. Through these examples you will see that this idea has a lot of truth to it. If you look closely at any aspect of life: less is more!

Be wealthier by trading less

Let’s start by looking at wealth and finance. The game of wealth building is really set up to reward people who can figure out how to get a better return on their money.

The best and brightest people are spending tremendous energy figuring out ways to make more money by actively trading, taking bigger risks and even going as far as building computer systems from the ground up to shave microseconds off trade times.

So, what do the wealth building games people are playing show us?

There have been numerous studies, looking at the performance differences between actively and passively managed funds. The verdict is clear. Passively managed funds have higher returns, despite the lack of effort that goes into managing them. In any given year, 83 to 95% of active money managers fail to beat their benchmarks in any given year.

Think of all that wasted effort and money!

The passive index funds, on the other hand, just invest in a pre-defined selection of stocks. Rebalancing happens periodically, and that’s it. Simple and effective!

Sure, investing in funds isn’t the only way to build wealth, but it provides a striking example of how less is more. It’s worth paying attention to.

It’s how I invest my money.

Grow a business faster by working less

Next, let’s look at the world of business.

I recently got paddleboards for my family. With the boards, we got a free book by the company founder, Stephan Aarstol, called The Five Hour Workday. The premise of the book is NOT that we should be lazy. The founder of the company is a savvy entrepreneur who knows how to work hard.

Taking out our paddleboards in Dillon, CO.

However, Stephan Aarstol saw a better way to get results in business, and it had nothing to do with working harder. It had everything to do with working smarter. He saw that when his team members were happy and living great lives, they were more creative, productive and insightful at work.

He performed an experiment and for three months, switched his entire company to a 5-hour workday, 5 days a week, for the same pay as working a full 40 hours week. In fact, he increased their pay, by offering his staff a cut of company profits.

What happened?

Optimists would think that the experiment would have resulted in a consistent level of business growth, despite the fewer hours worked. This would equate to getting the same outputs from fewer inputs. Not a bad result.

Doubters would think that result was a drop in business, though perhaps not as much as one would expect. This would equate to getting fewer outputs for far fewer inputs. Again, not a bad result if you really care about giving employees back time in their days. However, this isn’t sustainable for a growth-oriented business.

However, what happened was that the business absolutely took off. Employees were super happy. That part should be obvious. What wasn’t obvious, was that customers were also incredibly satisfied with their purchases and customer service.

Customers told their friends about their awesome paddleboards and the great company behind them. The business was booming, in spite of the fewer hours worked! This would equate to getting vastly more output from fewer inputs.

Over the years since the book was published, the company changed their work schedule again, going back to an 8-hour workday during the off-season, and sticking to a 5-hour work day during the peak summer months. This is a far cry from the 60-plus hour weeks that are common at other growth-oriented companies.

Why the change back to a 40-hour workweek?

According to Aarstol:

A weird thing happened—productivity was fine and we actually grew revenues—but the five-hour workday failed us in a completely unexpected way. People were feeling less connected to the company. When you’re working only 25 hours a week, other parts of your life become bigger and more important.

Especially in the startup world, people actually like going to work and feeling attached to or even consumed by their jobs. So now we’ve switched back to an eight-hour day for most of the year. We do five-hour days in the summer, during our busiest time of year, from June through September. The time pressure makes us figure out how to be more productive.

Tower Paddleboards is not the only company changing the world of work. Basecamp, an innovative software company (formerly called 37 Signals) is famous for railing on the “work hard to get ahead” mentality of tech companies, proudly adopting a flexible work schedule capped at 40 hours a week, with Friday’s off all summer long.

The lazy person’s guide to bountiful gardening

Are you into gardening or permaculture?

I don’t have a green thumb, but my mom does!

I grew up working in our large garden on my most weekends and evenings during the growing season. For some reason, I’ve never picked up the skill, but one thing I’ve learned is that micromanaging plants is a surefire way to kill them!

I recall a conversation several years ago with my mom, after attempting to grow a vegetable garden in the backyard of my newly purchased home. I was complaining that my kale, carrots, and potatoes wouldn’t grow. My succulents were wilting. What was my issue? My mom gave me some great advice, water them occasionally and don’t do anything else. Let them be.

It turns out there was a lot of wisdom in that tip. I was over-watering and stepping all over the raised beds. I was getting in the way of nature doing what it does best, grow stuff.

Can we grow more by doing less?

In the world of permaculture, there is a movement of people taking up lazy gardening. Lazy gardening is all about getting more out of less. By being smart about positioning plants as part of a natural ecosystem; less watering, fertilizing, mulching and weeding is needed for a garden to thrive.

Don’t believe me? Look at what this guy is able to grow in a relatively small vacant lot in the middle of an urban area in the UK.

Conclusion

I don’t have time to talk about all aspects of life and how the principle of getting more out of less can apply.

However, it’s clear that there is something powerful about allowing a few vital inputs to do their magic, and not smothering a good thing with a ton of extra activity that will just get in the way of life doing what it does best, GROW!

I hope this topic has inspired you to think way beyond Pareto’s Principle. You don’t need to settle for just getting most of the benefits from a few inputs. You can aspire to get far more out of the few things you put into a project.

I also hope that you are inspired to think about how you can simplify some aspects of your life, for the sake of allowing growth to occur in a more natural and abundant way.

Here are a few questions to guide your journey to simplifying your life and embracing a “getting more from less” attitude:

  1. What area of your life would benefit from more abundance with less effort?
  2. What are you doing right now in this area of your life? Think about the inputs/actions taking place. Even if you aren’t doing anything in this area, doing “nothing” is still something!
  3. What few activities/inputs seem to be producing good results?
  4. What few activities/inputs are worth focusing more time and energy on?
  5. What other activities/inputs are not fruitful and worth letting go of? 

Please leave a comment down below this post with your answer to Question #1!

4 comments

    • Ravi Raman says:

      Thanks Varag! This is one of the few “tactics” that works super well in a lot of different domains (career/business/health/life etc.).

  1. julie benson says:

    Great article!! We work alot of hours, and get over whelmed. But when we can step away I find that we can have a more creative thought process. But that hardly ever happens. How does a person break the cycle?

    • Ravi Raman says:

      Hey Julie!

      It’s a simple concept but can be tricky to implement. One place to start, is to look at all the work that is happening and ask what is really moving the needle (driving profits and making customers happy) and essential. Then, for the other stuff, can any be delegated, deferred or deleted? Pick a few things and treat it as an experiment for a few days or a week at a time. What happens when you delegate or delete a few things you once considered essential from your task list? Does business move on just fine without those things happening or with a team member doing them? How much time does that win back for you? What happens in those free hours?

      Another place to look is to speak with your team and see what they think. Sometimes it’s easier to have a dialogue about this and come up with a few ideas as a group for ways to simplify and focus business operations.

What do you think? Let me know below. I respond to every comment!