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| The Pareto Principle,
or the 80-20 Rule |
| (AKA: The Vital Few
and Trivial Many) |
| In 1906, an Italian
economist named Vilfredo Pareto made a discovery: Eighty percent of his country's
accumulated wealth was owned by only twenty percent of the people. The idea grew
from there..... |
| The real message of this rule is that there is a predictable
imbalance in the world that affects all of our lives, and if we can just become aware of
it we can then direct our efforts to greatly improve our chances of success. Not
bad, huh? |
| The Pareto Principle
is often expressed in percent (80% / 20%), but it really isn't about numbers. It's
about the relationship between input and output, or between relationship between
effectiveness and diminishing returns. The percentages could as well be 70-30 or
90-10. The point is that there is a considerable disproportion between effort and
result. |
| 80 % of your efforts will
be spent to get 20 % of your results |
20 % of your efforts will be
spent to get 80 % of your results
|
| SOME
INTERESTING EXAMPLES |
|
20 % of your customers will provide 80 %
of your profit |
|
80 % of the news is in the first 20 % of
an article |
|
20 % of the streets handle 80 % of the
traffic |
|
80 % of decisions come from 20 % of the
meeting time |
|
80 % of the clothes we wear come from 20 %
of our wardrobe |
|
20 % of a company's products will produce
80 % of the revenue |
|
80 % of a problem can be solved by finding
the right 20 % of the questions |
|
20 % of your to-do list will produce 80 %
of your results |
|
80 % of your success will come from 20 %
of your efforts |
|
20 % of a sales force will produce 80 % of
the annual results |
|
80 % of the issues in
important decisions involve social or political ideas -- top grade technical information
does little good if that 20 % does nothing to address, or simply ignores, those social and
political ideas. What are you doing today? |
| Reference: Pareto's Principle:
The 80-20 Rule by Arthur W. Hafner, Ph.D |
