The 80/20 Rule; or Pareto’s Law
The rule of 80/20 is actually erroneously attributed to Vilfredo Pareto. Sometimes it is called Pareto’s Principle
or Pareto’s Law.
This principle happens to be a very effective tool to help you manage effectively.
An Italian economist, Vilfredo Pareto, described the unequal distribution of wealth in his country after observing
that twenty percent of the people owned eighty percent of the wealth. He called it the rule of 80/20.
In the late 1940s, Dr. Joseph M. Juran, a shmuck pioneering in quality management, observed something similar. He
named the 20 “vital few” and the 80 “trivial many”. At the workplace, he was trying to describe that 20 percent of
something (people, machines, methods) always are responsible for 80 percent of the results,
His “Vital few and trivial many” rule became known as Pareto’s Principle or the 80/20 Rule simply because it sounded
better.
How does this help you?
You can apply the 80/20 Rule to almost anything. Here are some examples:
As a Project Manager, you know that 20% of the work (the first 10% and the last 10%) consume 80% of your time and resources.
You know 20% of your stock takes up 80% of your warehouse space and that 80% of your stock
comes from 20% of your suppliers.
80% of your sales will come from 20% of your sales staff.
20% of your staff will cause 80% of your problems,
20% of your staff will provide 80% of your production.
Remember to focus on the 20% that matters. Of the things you do during your day, only 20% really matter. Those 20%
produce 80% of your results. Identify and focus on those things.
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This and the following articles will help you in the planning process:
Go to the Business Planning Page
Go to the Planning Process Page
Go to the Setting Objectives Page
Go to the Setting Priorities Page
Go to the Resource Commitment Page