Practical Insights Into Behavior and Decision-Making

Have you ever heard of Pareto’s Principle, Murphy’s Law, or Occam’s Razor? You might have come across these ideas without even knowing it. They aren’t just clever sayings but practical tools you can use in life and business.

These laws can be described as heuristics or principles of everyday observation. They are practical, common-sense rules that help explain patterns in life, work, and problem-solving. They provide simple insights into human behavior, productivity, decision-making, and how systems tend to work (or fail).

Let’s explore a few, some familiar and others not so much, and see how they fit into the business world.

Murphy’s Law: “Anything that can go wrong will go wrong.”

This might sound pessimistic, but it’s a reminder to expect the unexpected. In business, things rarely go perfectly, but preparing for setbacks can make all the difference. Build contingencies and have backup plans. If you’re launching a project, consider what might go wrong—and be ready when it does.

Pareto Principle (80/20 Rule): “80% of effects come from 20% of causes.”

This principle, named after economist Vilfredo Pareto, is a great way to focus on what truly matters. In business, 80% of your revenue might come from just 20% of your customers. The takeaway? Focus on those high-value clients, or the top-performing products, to make the biggest impact.

Moore’s Law: “The number of transistors on a chip doubles every two years.”

Tech moves fast—Moore’s Law highlights how quickly technology evolves. In business, staying on top of tech trends and innovations is key. Whether it’s software, hardware, or new platforms, those who adapt to faster tech development have an edge over the competition.

---

Are you looking for more insights into human behavior? Interested how you can use it to sell more? Then you might find this interesting:

Simple Rules for High-Impact Sales Presentations

---

Parkinson’s Law: “Work expands to fill the time available for its completion.”

Ever noticed how a task seems to drag on when you have a lot of time, but gets done quickly when you’re under pressure? That’s Parkinson’s Law at play. Set tighter deadlines, and watch productivity soar. Time constraints often lead to sharper focus and more efficient work.

Hofstadter’s Law: “It always takes longer than you expect, even when you take Hofstadter’s Law into account.”

In project management, deadlines almost always get pushed. Hofstadter’s Law is a good reason to add a buffer. Whether it’s software development, marketing campaigns, or client work, give yourself more time than you think you’ll need. It’s a safety net that saves stress later.

Occam’s Razor: “The simplest explanation is usually the right one.”

If I had to chose the best advice, this would be it. In problem-solving, overcomplicating things can lead you astray. Occam’s Razor reminds us to strip away unnecessary complexity. When dealing with business issues, focus on the simplest, most straightforward solution—it’s usually the best one.

The Diderot Effect: “One new possession often leads to a spiral of consumption.”

Ever bought a new outfit, then realized you need new shoes to match? The Diderot Effect explains this. In business, it shows up when investments or purchases create a chain reaction of further spending. Be mindful of how one decision can lead to a series of unintended follow-ups.

This is an interesting story, and you can check it out here: https://jamesclear.com/diderot-effect.

Goodhart’s Law: “When a measure becomes a target, it ceases to be a good measure.”

Bad managers create bad targets. This happens a lot. When goals get too rigid, people may game the system. In business, setting KPIs is important, but they shouldn’t be the end-all. Focus on meaningful outcomes rather than hitting specific numbers just for the sake of it.

Hanlon’s Razor: “Never attribute to malice that which can be explained by stupidity.”

Not every mistake or failure in business is due to bad intent. Often, it’s just a lack of understanding or human error. This law is a reminder to stay calm and not overreact when things go wrong. Sometimes, it’s just a simple mistake that can be corrected without drama.

Segal’s Law: “A man with a watch knows what time it is. A man with two watches is never sure.”

In the age of information overload, Segal’s Law rings true. More information isn’t always better. Stick to a few reliable sources, and don’t overcomplicate decision-making with too many conflicting inputs.

Gall’s Law: “A complex system that works is found to have evolved from a simple system that worked.”

Don’t try to build a complicated system from scratch. Start simple. A successful business often grows from a straightforward foundation. Complex systems take time to develop, so don’t rush into over-engineering solutions.

Dilbert Principle: “The most ineffective workers are moved to management.”

Though it’s meant to be humorous, the Dilbert Principle is a cautionary tale. In business, don’t just promote based on tenure—focus on skills, leadership, and competence. This helps avoid placing the wrong people in crucial roles.

Dilbert – the ultimate corporate guide to success can be found here: https://dilbert.com/.

Cunningham’s Law: “The best way to get the right answer online is to post the wrong answer.”

Ever noticed how quickly people correct mistakes on the internet? Cunningham’s Law taps into that. In business, this could mean encouraging collaboration or debate to arrive at the best solutions, even if someone gets things wrong initially.

Peltzman Effect: “People adjust behavior in response to perceived risks.”

When safety measures or regulations are added, people often take greater risks. The same goes for business. Be aware that adding safeguards might change how your team or clients behave, sometimes in unexpected ways.

Gresham’s Law: “Bad money drives out good.”

In broader terms, inferior products or practices can overshadow better ones. Be wary of lowering standards to compete with lower-quality offerings. In the long run, quality often wins, so stay focused on delivering value.

---

These “laws” aren’t just abstract ideas. They’re everyday observations that help us navigate the complexities of business.

Whether you’re streamlining processes, managing teams, or adapting to technological changes, keeping these principles in mind can sharpen your decision-making and set you up for success.

Do you have a good one? Mention it in the comments!