The Pareto Principle in Practice: Why Two Is Better Than Three

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Simon Sinek tells the story of a successful salesman in 1950s Los Angeles who became famous for his ability to engage women into buying shoes by limiting their choices. Women would enter his tiny store, and before long, they were walking out with shoes while his commissions soared. When asked about his secret, he replied:

“Two, not three.”

He explained that when a woman came into the store, she would look over the items and tell him which pair she wanted to try on. After fitting the first pair, she would make a second selection, and he would bring that pair. When it came time for a third pair, the salesman would ask, “Which pair would you like me to take away?”

What he discovered was simple: when customers had three choices, they often bought none. When they had just two, they made a decision and purchased a pair.

By limiting choices, the salesman enabled his customers to apply the Pareto Principle, streamlining their decision-making process, prioritizing effectively, and focusing on what truly mattered.

The Pareto Principle, named after Italian economist, sociologist, and philosopher Vilfredo Pareto (1848–1923), suggests that 80% of outcomes often come from 20% of efforts. Pareto’s work has had a lasting influence on various fields, including economics, sociology, and systems analysis.

Here’s how the Pareto Principle can help us make better decisions:

1. List Possible Factors/Options: Write down all the elements influencing your decision. By examining options on paper, you can analyze them with greater clarity.

2. Analyze Impact: Rank the options based on their impact on the desired outcome. Ordering their importance helps reveal the practicalities of each choice.

3. Select the Vital Few: Focus on the top 20% of options that contribute most significantly to success. This redefines priorities and establishes clear direction.

4. Act Decisively: Direct resources and efforts toward these critical factors. Like the shoe salesman’s customers, narrowing choices fosters confidence and action.

5. Review Regularly: As situations evolve, reapply the principle to ensure focus remains on the most impactful areas.

By leveraging the Pareto Principle and following these five steps, we can avoid analysis paralysis and concentrate on decisions that truly move the needle.

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