The 80-20 Rule (Pareto Principle)

The 80-20 rule, also known as the Pareto Principle, states that for many events, roughly 80% of the effects come from 20% of the causes.

Key Idea

The principle suggests that a small number of inputs or efforts are responsible for a large percentage of the outputs or results. This is a power-law distribution, and the 80/20 numbers are not a hard and fast rule, but rather a common pattern.

Applications

• Business: 80% of sales come from 20% of customers.
• Productivity: 20% of your tasks will account for 80% of the value you produce. This is the foundation of Prioritize Difficult Tasks.
• Software: 20% of the code has 80% of the errors.

Implications

By identifying and focusing on the vital 20%, you can achieve significant results with less effort. This is a powerful tool for prioritization and resource allocation.