Pareto Principle (80/20 rule)

Knowledge Center

   

Description of Pareto Principle (80/20 rule). Explanation.

Contents

  1. Summary
  2. Forum
  3. Best Practices
  4. Expert Tips
  5. Resources
  6. Print
 

Definition Pareto Principle (80/20 rule). Description.


The Pareto Principle (80/20 rule) states that for many phenomena 80% of consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places.


Some of these applications include:

  • 20% of any advertising campaign produces 80% of the response.

  • 20% of the employees perform 80% of the work.

  • 20% of the clients are responsible for 80% of all revenues / profits.

The principle was suggested by management thinker and quality control pioneer Joseph M. Juran.

Juran described the Pareto principle as the principle of 'the vital few and the trivial many' (Quality Control Handbook, 1951). He named it after the Italian economist Vilfredo Pareto, who observed in 1897 that 80% of property in Italy was owned by 20% of the Italian population.


The principle can be viewed as recursive, Tipton Cole has observed that the Pareto Principle applies to the residue of its first application, yielding a "96-36" rule.


Pareto Principle (80-20 rule) Forum
  Using the 80/20 Rule in Lean Management
The Pareto principle can be used in lean practices so that an organization can achieve efficiency and effectiveness. Such practice looks at the few tasks that employees perform that add value to the organization in terms of achievement of set goals a...
     
 
  How to Apply the Pareto Principle to Email
You should also apply the 80/20 rule to your email inbox.

WHY YOU SHOULD APPLY THE 80/20 RULE TO YOUR INBOX
To make sure you are not following other peopleís agenda (who send you all kinds of requests etc.), but your own.

H...
     
 
  How do we Know what is the 20% in Pareto?
Some may feel this is obvious, but my experience has shown that many managers and executives may not know what is actually in the 20%. This is not a given. If you are an "unconscious competent" you may really not know what your 20% activities are in ...
     
 
  Pareto Principle for Designing Information Systems
Iíve been spending a lot of time designing Information Systems for customers and found the Pareto principle also very useful to help the user focus on important matters and avoid costly implementations that are used once in a while.
This is the ...
     
 
  Pareto Principle in Bible?
Any sample? Noah? Other samples? I am looking for any information about any management theory in bible. No one try to take and find that any new theory had a backup theory in old testimony too. Let us begin a new discussion about this....
     
 
  Beware: Pareto is Not About 80 and 20
Don't focus too much on the numbers: the principle is about the imbalance, not about '80' and '20'. Other ratio's than 80/20 have been found and described......
     
 
  Pareto Principle versus ABC Analysis
I would like to know what came first - ABC Analysis or Pareto Principle? Both seem the same to me. So maybe one is the adaptation of the other......
     
 
  Meta Pareto Principle
The Pareto Principle has consistently proven to be right in 80% of the cases. There are of course exceptions, but for sure they do not amount to more than 20%... The pareto principle in action :-)...
     
 
  80-20 Rule in Broadcasting
When Brian Tracy's "Eat that frog" introduced me to Pareto principle some years back, I called for our marketing books and to my surprise only about 20% of advertising agencies placed adverts worth more than 80% of our revenue on our stations.
...
     
 
  Using the 80/20 Principle for Workforce Effectiveness
Can this principle be widely applied, and include a company workforce? In regard to performance and effectiveness of personnel, e.g. if the company's total workforce is 1000, can we attribute the achievements to only 200 people, what if the performan...
     
 
  Danger of Pareto: Self Fulfilling Prophecy
Although I agree with the Pareto principle, the danger is that we act to fulfill.
How can we in our organizations and daily life contradict? What is our attitude towards this? Maybe we often act in ways that aggregates?...
     
 

Pareto Principle (80-20 rule) Special Interest Group


Special Interest Group

 

Best Practices - Pareto Principle (80-20 rule) Premium
  The 80/20 Rule for Managers
To organize their working process well, and to complete tasks effectively, managers use a big variety of resources including finances, social and time resources. Obviously the environment is never perfect, and your success depends on your abil...
     
 

Expert Tips - Pareto Principle (80-20 rule) Premium
 

Analyze the Performance of your Business Through an 80/20 Lens

HOW CAN YOU ANALYZE PERFORMANCE OR A COMPANY THROUGH A 80-20 LENS?
By effectively deploying the 80-20 rule in periodic data driven reviews of pro...
Usage (application): Analyzing Business Performance Management
 
 

Resources - Pareto Principle (80-20 rule) Premium

Time Management for Business Managers

This presentation elaborates on the concept of time management and includes the following section:
1. Introduction
2. Why time management is...
Usage (application): Time Management, ABC Analysis
 

Pareto Principle Explained

This powerpoint presentation explains the Pareto Principle and gives numerous examples
1. Pareto Principle: 20/80 rule
2. How it can help yo...
Usage (application): Understanding the Basics of the 80-20 Rule
 

First Introduction to the 80/20 Rule (Pareto Principle)

Basic explanation of the Pareto Principle for time and life management: 20% of your activities will account for 80% of your results, like for instance...
Usage (application): Understanding the Importance of the Pareto Principle in Time and Life Management
 

Funny Introduction to Time Management

Harold Taylor gives live examples of the most freqently made errors, misconceptions and and time consuming habits in a funny way.
Excellent start...
Usage (application): Initial Understanding of Time Management, Start of Workshop / Training
 

Remarkable Video of the 80-20 Rule. Visual Example

This short video visualizes and explains how the Pareto Principle happens by showing a simple experiment with paperclips....
Usage (application): 80-20 Rule Background, Pareto Principle Example
 

Steve Jobs on Dr. Joseph Juran: Back to the Basics

In this video a young Steve Jobs explains the influence of Dr. Juran on Steveís ideas of process and quality management. In particular Jobs recommends...
Usage (application): Quality Management, Focusing on the Most Important Things, Pareto Principle
 

Time Management is a Misnomer. Manage Yourself!

Dr. Sharon Melwick explains the meaning of Stephen Covey's saying: 'Time Management is a misnomer. The real challenge is to manage ourselves'.
In...
Usage (application): Advanced Time Management
 

Summary of the 4 Quadrants of Time Management

Brian Johnson initially explains 4 of Steven Covey's Seven Habits:
1. Be proactive
2. Begin with the end in mind
3. Put first things fi...
Usage (application): Initial Understanding of Time Management
 
 

News

Pareto Principle (80-20 Rule)
     
 

Videos

Pareto Principle (80-20 Rule)
     
 

Presentations

Pareto Principle (80-20 Rule)
     
 

More

Pareto Principle (80-20 Rule)
     

Compare also: Root Cause Analysis  |  Time Management

Special Interest Group Leader

You here


 

Return to Management Hub: Change & Organization  |  Decision-making & Valuation  |  Human Resources  |  Marketing


More on Management  |  Return to Management Dictionary  | 

 

This ends our Pareto Principle (80/20 rule) summary and forum.

About 12manage | Advertising | Link to us | Privacy | Terms of Service
Copyright 2016 12manage - The Executive Fast Track. V14.1 - Last updated: 6-12-2016. All names tm by their owners.