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Created: 2025-10-20
The Pareto Principle, also known as the 80/20 rule, is an observation or heuristic which states that for many outcomes, roughly 80% of the effects come from 20% of the causes.
This principle was first introduced by the Italian economist Vilfredo Pareto in the late 19th century. He observed that 80% of the land in Italy was owned by just 20% of the population. The management consultant Joseph M. Juran later popularised the concept, applying it to quality control and calling it the principle of the "vital few and the trivial many" (later revised to the "vital few and the useful many").
It is important to understand that this is not a rigid mathematical law. The 80/20 ratio is an approximation; the actual distribution could be 70/30 or 95/5. The core idea is the inherent imbalance between inputs and outputs—most things are not distributed evenly.
The Pareto Principle "works" as a practical model or guideline that has been consistently observed across a vast range of fields. While it is not a scientific law like gravity, its descriptive power is widely accepted as "evidence" of its utility.
Here are some common, well-documented examples:
Business: 80% of a company's revenue frequently comes from 20% of its customers. Likewise, 80% of profits may come from 20% of its products.
Software Development: Microsoft famously noted that by fixing the top 20% of the most-reported bugs, they could eliminate 80% of the related errors and system crashes.
Quality Control: 80% of customer complaints typically stem from 20% of the product defects or service issues.
Personal Productivity: 80% of your valuable results or output will likely come from just 20% of your tasks or effort.
Website Performance: 20% of a website's pages will often account for 80% of its total traffic.
Health and Safety: In occupational safety, 20% of identified hazards often account for 80% of the injuries.
In all these cases, the principle proves effective for identifying where to focus resources for the greatest possible impact.
The best practice for using the Pareto Principle is as a tool for prioritisation and resource allocation. It helps you move from being busy (doing the "useful many" 80% of tasks) to being effective (focusing on the "vital few" 20%).
Here is a practical, step-by-step approach:
Identify and List Inputs and Outputs:
First, list all your inputs or causes (e.g., all your weekly tasks, all your clients, all product features, all sources of complaints).
Then, identify the metric for your outputs or results (e.g., value created, revenue, time spent, number of crashes).
Measure and Connect:
Quantify the "cost" or "result" of each item on your list.
For example: How much revenue does Client A bring? How much revenue does Client B bring? How much time does Task X take vs. the value it produces?
Analyse and Rank:
Rank your inputs from the highest impact to the lowest.
Identify the crossover point. You will almost certainly find a "vital few" (your top 20% or so) that are generating the vast majority (80% or so) of your positive results.
A Pareto chart—a bar chart that plots items in descending order of impact—is the specialist tool used to visualise this analysis clearly.
Getty Images
Act and Refocus:
Amplify the "Vital Few": Dedicate the majority of your time, energy, and resources to this top 20%. These are your highest-leverage activities. Ask: How can I do more of this?
Manage the "Useful Many": Review the 80% of inputs that produce little value. You must decide whether to eliminate, automate, delegate, or simply reduce the time spent on them.
The most common mistake is to assume the 80% of tasks (the "useful many") are useless and can be completely ignored. This is incorrect. Answering routine emails or performing administrative tasks might fall into the 80% of effort that only yields 20% of your direct results, but they are often still necessary to keep the operation running.
The goal is not elimination of the 80%, but conscious prioritisation of the 20%.