Pareto, Parkinson’s and The 4 Day Work Week Success

As the six-month long “4 day work week” experiment is coming to an end in the UK, the data and qualitative input are starting to trickle in. There haven’t been many discussions around this in the world of insurance, despite the fact that burnout is notorious in the financial services industry. At the halfway point, firms reported no reduction in productivity — some even reported increases. The FinTech — Atom Bank — is one of these companies, breaking the status quo and bringing fresh ideas to the financial services sector.

Why does a 4 day work week… work?

Parkinson’s Law and Pareto’s Principle

Parkinson’s Law says that the perceived importance and difficulty of a task will grow in proportion to the amount of time given to finish it. It’s the magic of the deadline coming up soon. If I give you 24 hours to complete a project, the time pressure forces you to focus on execution, and you have no choice but to do only the bare essentials.

If I give you a week to do the same thing, you’ll spend six days making a big deal out of a small thing. The end product of the shorter deadline is almost inevitably of equal or higher quality due to greater focus.

The Pareto Principle, named after economist Vilfredo Pareto, says that 80% of effects come from 20% of causes. This means that inputs and outputs don’t have the same relationship. This principle reminds us that the relationship between inputs and outputs is not balanced.

Having less time to work and having to prioritize presents a very curious phenomenon. There are two ways to increase productivity that work well together and are the opposites of each other:

1.) Only do the most important tasks to cut down on work time. (Pareto’s Principle)

2.) Cut down on work time to focus on the most important tasks. (Parkinson’s Law).

The best thing to do is to use both: find the few most important tasks that have the most impact and set clear, short deadlines for them. So in some sense, doing things with tons of focus within a short period of time is the best way you can do them.

Growth and prosperity in Europe’s economy rely heavily on the insurance sector. Insurance systems, important yet antique, have not changed in over three centuries. The importance of digitalization cannot be overstated.

Join me on LinkedIn to break the status quo in Europe’s insurance markets.