Who was Pareto?
Vilfredo Pareto was an Italian economist who is famous for his observation in the early 1900s that 80% of the land in Italy was owned by 20% of the population. The principle was originally conceived around the uneven distribution of wealth, and it was actually a business management consultant named Joseph Juran who eventually applied the concept to business and named it the “Pareto Principle.”
What is the Pareto Principle?
In general, the Pareto Principle states that for many events, 80% of the effects come from 20% of the causes. It is also called the 80-20 Rule and the Law of the Vital Few. It can be applied to business in several ways. For example, it is commonly observed that 20% of customers bring 80% of total sales. Also, 20% of employees do 80% of the work. This uneven distribution of outcomes to inputs happens in many facets of life.
What does this mean for you?
You may be thinking, “This may be good to know if I’m going to be on Jeopardy someday, but why should I know this now?” It’s because the 80-20 Rule applies to everyday life too. For example, 80% of your productivity comes from 20% of the effort, and 20% of the things on your To Do list are important, the other 80% can be done another day. You can use this principle to maximize your own productivity by identifying the 20% that matters and focusing your efforts on these things.
My mom always says, “You learn somethin’ new every day.” I guess that’s one thing you can check off your list for today!
To a happy, healthy, productive life!