Learn more about strategy with this collection
Understanding the importance of decision-making
Identifying biases that affect decision-making
Analyzing the potential outcomes of a decision
The Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.
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It can mean all of the following things:
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There’s a common misconception that the numbers 20 and 80 must add to 100 — they don’t!
Remember that the 80/20 rule is a rough guide about typical distributions.
The key point is that most things in life (effort, reward, output) are not distributed evenly — some contribute more than others.
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The Pareto Principle helps you realize that the majority of results come from a minority of inputs.
The point is to realize that you can often focus your effort on the 20% that makes a difference, instead of the 80% that doesn’t add much.
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The point of the Pareto principle is to recognize that most things in life are not distributed evenly.
Make decisions on allocating time, resources and effort based on this:
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It may be true that 80% of the Mona Lisa was painted in the first 20% of the time, but it wouldn’t be the masterpiece it is without all the details.
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Time management and making priorities might be painful and these might be blockers to your success. The Pareto Principle might give you the refreshers as a new perspective.
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