The Pareto Principle (The 80/20 Principle)

It's an excellent and quick way to assess, understand, and optimize virtually any situation involving contribution or usage of some kind.

The potential uses therefore are covering most aspects of work, business, organizational development and personal life.

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…

The above are examples of simple correlations of Pareto's 80-20 Rule, for which a very wide range of similar alternatives could be used instead, depending on the situation, including inversions, for example:

• "20 % of clothes in a wardrobe are worn 80 % of the time"
• "20 % of the tools in a toolbox are used in 80 % of tasks"
• "20 % of the energy use in a household will offer 80% of the potential energy savings"

Considering the fact that, the Pareto Principle does not demand that the 80:20 ratios are applied to every situation, and neither is the model based on a ratio in which the two figures must add up to 100.

So the examples used here are not statistical facts; the 80-20 ratio is used to show that the Pareto distribution principle can be applied to many different situations.

• The reasons that 80:20 has become the 'standard' ratio associated with the effect are:
• the 80-20 correlation was the first to be discovered and published
• 80-20 remains the most striking and commonly occurring ratio

and since its discovery, the 80:20 ratio has always been used as the name and basic illustration of the Pareto theory.

Here are some more examples of Pareto's Law as it applies to various situations.

• 80 % of results come from 20 % of efforts
• 80 % of activity will require 20 % of resources
• 80 % of usage is by 20 % of users
• 80 % of the difficulty in achieving something lies in 20 % of the challenge
• 80 p% of revenue comes from 20 % of customers
• 80 % of problems come from 20 % of causes
• 80 % of profit comes from 20 % of the product range
• 80 % of complaints come from 20 % of customers
• 80 % of sales will come from 20 % of sales people
• 80 % of corporate pollution comes from 20 % of corporations
• 80 % of work absence is due to 20 % of staff
• 80 % of road traffic accidents are caused by 20 % of drivers
• 80 % of a restaurant's turnover comes from 20 % of its menu
• 80 % of your time spent on this website will be spent on 20 % of this website
• and so on..