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Part 3: The 80/20 Principle – Focus on What Truly Moves the Needle

📌 This article is Part 3 of a 5-Part Series on systematic problem-solving.

February 07, 2025

📌 This article is Part 3 of a 5-Part Series on systematic problem-solving. If you haven’t read the previous parts, start here → Part 1: Welcome & Overview.

In the last part, we broke down how to identify the real problem using First Principles Thinking.

Now, here’s where it gets interesting...

Once you’ve found the core problem, how do you know where to focus your time and energy?

That’s where the 80/20 Principle comes in.

What Is the 80/20 Principle?

The 80/20 Principle (also called the Pareto Principle) states that:

A small percentage of inputs drive the majority of results.

Put simply:

  • 20% of the efforts create 80% of the results.

  • 20% of the causes drive 80% of the effects.

  • 20% of the inputs produce 80% of the outputs.

But here’s what most people miss...

This ratio is often more extreme than 80/20.

Sometimes it’s 90/10, 95/5, or even 99/1.

Understanding this lets you focus on the few things that actually matter.

How to Apply the 80/20 Principle

Step 1: Identify the Vital Few

Look at the core problem you defined in Part 2.

Now ask:
"What are the few key factors that drive MOST of the outcome?"

Examples:

  • Fitness: 3 fundamental movements deliver 97% of results.

  • Wealth: 5% of spending decisions cause 95% of financial stress.

  • Productivity: 20% of tasks produce 80% of meaningful progress.

Step 2: Ruthlessly Cut the Trivial Many

Once you’ve identified your vital few, eliminate or deprioritize everything else.

Hint: If your list has more than 3-4 key factors, you’re probably including trivial details that don’t matter as much.

Step 3: Focus on High-Leverage Actions

Instead of spreading yourself thin, double down on the few things that move the needle the most.

This is where real progress happens.

Your Action Step

  1. Look at the core problem you identified in Part 2.

  2. Ask: "What are the vital few inputs that would create MOST of my desired outcome?"

  3. Write them down. Then, ruthlessly cut your list down to the essential 20%.

(Hint: If everything feels important, you’re not cutting deep enough.)

In the next part in this series, we’ll take this even further.

Because knowing what matters isn’t enough. You need a system to ensure you execute consistently — without relying on willpower.

That’s where Systems Thinking comes in.

— Steve

📌 Catch Up on Previous Parts: