"A minority
of input produces the majority of results. "
(See http://www.indwes.edu/tuesday/s_paret.htm or a Web search)
The 80:20 rule was originated by Vilfredo Pareto, an Italian economist who
studies the distribution of wealth in a variety of countries around 1900. He
discovered a common phenomenon: about 80% of the wealth in most countries was
controlled by a consistent minority -- about 20% of the people. Pareto called this
a "predictable imbalance." His observation eventually became known as
either the "80:20 rule" or "Pareto's Principle."
The 80:20 rule has been expanded far since its first economic use. While one
might quibble about the 80% or 20% (it is sometimes 60:40 or 90:10) the insight
is broadly applied to leadership and management. The "80:20 rule" has
become one of the best known "leadership shorthand terms" reflecting
the notion that most of the results (of a life, of a program, of a financial
campaign) come from a minority of effort (or people, or input).
(Edited by John Cross from this point on, 2/6/2001.) To what does 80:20 apply
in this class and your life? Try these for starters:
80% of the work is usually done by 20% of the people.
80% of the air time in a meeting is controlled by 20%
of the people.
80% of the problems are usually caused by 20% of the people
(information technology, college classes).
80% of the value of my day is often produced by 20% of the activity.
80% of the quality can be gotten in 20% of the time -- perfection
takes 5 times longer.
Some questions:
1) What are the implications of the 80:20 rule? Should I search for the 20% "biggest bang for the buck" programs, effort, people and pour all the energy into them? Can we consistently predict what the 20% will be in the future?
2) To what should Pareto's rule not apply? Should a meeting focus only on the 20% of people who have the most to contribute?
3) What examples would you add to those above?
REFERENCE (from the URL above): For an excellent treatment of Pareto's
Principle applied to management see The 80/20 Principle : The Secret of
Achieving More With Less by Richard Koch (ISBN=0385491700). IN this 1998
book, Koch argues this 80:20 observation is found in almost every part of
modern life from stock investment to time management. He argues for finding the
highly leveraged 20% elements and pouring all your energy into these
highly-productive activities.