The Pareto Principle
Posted: Tuesday, December 09, 2008
by Chuck Clayton
http://www.inexpensive-vacation-ideas.com
In the late 1800s an Italian economist named Vilfredo Pareto was studying the distribution of wealth in European countries. He discovered a predictable imbalance in the distribution of wealth. He found that approximately 80 percent was controlled by approximately 20 percent of the population. This was later known as Parato's Principle or the 80/20 rule. 1
Here are some examples of the 80/20 rule:
Eighty percent of the work done at a company will be done by twenty percent of the people.
Eighty percent of the people who fly will be travel with twenty percent of the airlines.
Eighty percent of the computers will be built by twenty percent of the manufacturers.
Eighty percent of the music listened to will be created by twenty percent of the artists.
These statements are clearly not exact, but can be made without a great deal of research, and serve as useful guidelines when making general assumptions, or when trying to get a feel for how things work.
Why does the 80/20 rule work so well? The answer is simple. 20% of the people, nature, products and systems stand out (excel) from the rest. Beyond that explanation would probably take many years of research and a PhD dissertation thrown in for good measure. The results probably wouldn't give a much better explanation.
Tasks can frequently be overwhelming. It is easy to flounder if you don't know where to start. The beauty and power of the 80/20 rule is that it can frequently be used to help you determine where to begin.
A question to ask yourself when beginning a task is:
"Where should I put most of my energies to give me 80% percent of the desired results?"
This insightful question will help take a seemingly overwhelming task to something that begins to be manageable. Select the parts of the task (dragons) that will give you the greatest benefit for the least time invested. In other words: Pick your dragons carefully!
1 Rigg, Alan. How to Beat the 80/20 Rule in Selling--Why Most Salespeople Don't Perform and What to Do About It (Tucson AZ: Hats off Books 2003, 2004).
Chuck Clayton
Copyright 2009
All Rights Reserved
http://www.problem-solving-techniques.com
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