Pareto Principle (80/20 rule)

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

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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
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Pareto Principle (80-20 rule) Special Interest Group


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Best Practices - Pareto Principle (80-20 rule) Premium
  The 80/20 Rule for Managers
To organize their working process well, and to com...
     
 

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

Analyze the Performance of your Business Through an 80/20 LensSign up

HOW CAN YOU ANALYZE PERFORMANCE OR A COMPANY THROU...
Usage (application): Analyzing Business Performance Management
 
 

Resources - Pareto Principle (80-20 rule) Premium

Time Management for Business ManagersSign up

This presentation elaborates on the concept of tim...
Usage (application): Time Management, ABC Analysis
 

Pareto Principle ExplainedSign up

This powerpoint presentation explains the Pareto P...
Usage (application): Understanding the Basics of the 80-20 Rule
 

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

Basic explanation of the Pareto Principle for time...
Usage (application): Understanding the Importance of the Pareto Principle in Time and Life Management
 

Funny Introduction to Time ManagementSign up

Harold Taylor gives live examples of the most freq...
Usage (application): Initial Understanding of Time Management, Start of Workshop / Training
 

Remarkable Video of the 80-20 Rule. Visual ExampleSign up

This short video visualizes and explains how the P...
Usage (application): 80-20 Rule Background, Pareto Principle Example
 

Steve Jobs on Dr. Joseph Juran: Back to the BasicsSign up

In this video a young Steve Jobs explains the infl...
Usage (application): Quality Management, Focusing on the Most Important Things, Pareto Principle
 

Time Management is a Misnomer. Manage Yourself!Sign up

Dr. Sharon Melwick explains the meaning of Stephen...
Usage (application): Advanced Time Management
 

Summary of the 4 Quadrants of Time ManagementSign up

Brian Johnson initially explains 4 of Steven Covey...
Usage (application): Initial Understanding of Time Management
 
 

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Compare also: Root Cause Analysis  |  Time Management

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