Understanding the Pareto Principle in Management
Understanding the Pareto Principle in Management
The Pareto Principle, also known as the 80/20 rule, is a concept in business management that suggests 80% of outcomes (or outputs) result from 20% of all causes (or inputs) for any given event. In business, a goal is to identify the 20% of efforts that are producing 80% of results and scale those efforts. All activities are not created equal and it is beneficial to identify those activities that are going to produce the best results.
Named after Italian economist Vilfredo Pareto, this principle serves as a general reminder that the relationship between inputs and outputs is not balanced. The Pareto Principle is a concept that suggests two out of ten items, on any general to-do list, will turn out to be worth more than the other eight items put together.
For more detailed information, you can visit the Pareto Principle Wikipedia page.
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