Sunday, 17 January 2010

Pareto's 80/20 Principle...

How I Heard About This: This is something I'd vaguely heard about before but doing some research today on business I found something rather interesting.
Main Source:
Backup Source:
Topic: Lifestyle/Economics

Details: The Pareto principle is also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity. It simply states that in many cases: 80% of the effects come from 20% of the causes. Joseph M. Juran devised the principle and named it after the Italian economist Vilfredo Pareto, who noted that 80% of the land in Italy was owned by 20% of the population.

Juran went on to show how 80% of the productivity in a business come from the top 20% "star" workers. It is also commonly known that 80% of wealth in the world is owned by only 20% of the people.

It can then be applied to our own lives in many ways. For example when we set about work on a project we do almost 80% of it in 20% of the time. The other 20% is spent fiddling with the details to get it right. It has been suggested by a great number of people that if we just let it go around 80% we'd have a lot more time to do other projects and have better lives.

I'm still in the middle of being convinced of the application in my own life, but I can already think of ways that it can be used to save a LOT of time.

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