Pareto principle
The 80 20 rule is one of the most helpful concepts for life and time management.
Also known as the Pareto Principle, this rule suggests that 20 percent of your activities will account for 80 percent of your results.
This being the case, you should change the way you set goals forever.
What Is the Pareto Principle?
The Pareto Principle, named after esteemed economist Vilfredo Pareto, specifies that 80% of consequences come from 20% of the causes, asserting an unequal relationship between inputs and outputs. This principle serves as a general reminder that the relationship between inputs and outputs is not balanced. The Pareto Principle is also known as the Pareto Rule or the 80/20 Rule.
History of pareto principle
The principle is named for Vilfredo Pareto, an Italian economist. In 1906, Pareto noted that 20 percent of the population in Italy owned 80 percent of the property. He proposed that this ratio could be found many places in the physical world and theorized it might indicate a natural law.
In the 1940s, Pareto’s theory was advanced by Dr. Joseph Juran, an American electrical engineer who is widely credited with being the father of quality control. It was Dr. Juran who decided to call the 80/20 ratio the "The Pareto Principle." Applying the Pareto Principle to business metrics helps to separate the "vital few" (the 20 percent that has the most impact) from the "useful many" (the other 80 percent).
Underesting pareto principle
Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.
More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:
●20% of the input creates 80% of the result
●20% of the workers produce 80% of the result
●20% of the customers create 80% of the revenue
●20% of the bugs cause 80% of the crashes
●20% of the features cause 80% of the usage
And on and on…
But be careful when using this idea! First, there’s a common misconception that the numbers 20 and 80 must add to 100 — they don’t!
20% of the workers could create 10% of the result. Or 50%. Or 80%. Or 99%, or even 100%. Think about it — in a group of 100 workers, 20 could do all the work while the other 80 goof off. In that case, 20% of the workers did 100% of the work. Remember that the 80/20 rule is a rough guide about typical distributions.
Also recognize that the numbers don’t have to be “20%” and “80%” exactly. The key point is that most things in life (effort, reward, output) are not distributed evenly – some contribute more than others.
How Does the Pareto Principle Work?
The Pareto Principle is a concept that suggests two out of ten items, on any general to-do list, will turn out to be worth more than the other eight items put together.
The sad fact is that most people procrastinate on the top 10 or 20 percent of items that are the most valuable and important, the “vital few,” and busy themselves instead with the least important 80 percent, the “trivial many,” that contribute very little to their success.
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