Pareto Principle is the observation, not law.
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.
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A junior reader who enjoy topics that advocate for self-improvement. Also a proponent of healthy living and mindfulness (still learning). Let’s connect and explore the world of books together!
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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The idea is part of this collection:
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
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Similar ideas to Pareto Principle is the observation, not law.
The Pareto Principle
... or the 80/20 principle was coined in the early 1900s by Vilfredo Pareto, an Italian economist. He observed that the pea pods in his garden were producing peas at this rate. 20 percent of the pea pods produced 80 percent of the peas. This output was then observed by him on a larger sc...
The Pareto Principle Misapplications
- Putting inputs and outputs on the same level: Inputs and outputs aren’t the same thing and, therefore, can’t be put into the same pie chart.
- Using a literal, mathematical interpretation of the rule: The numbers here aren’t that important.
The Pareto Principle (the 80/20 Rule)
It is an idea discovered by an Italian economist. It says that power and wealth is distributed like a reversed hockey stick where a small percentage of the population (20%) owns majority of the wealth (80%).
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