The 80/20 Rule aka Pareto Principle

This will be the super theory of the year for me. I just learnt about this rule which states that 80% of the effects come from 20% of the causes…

This principle was introduced by Quality Management pioneer, [tag]Dr. Joseph Juran[/tag]. He named the principle after the Italian economist, [tag]Vilfredo Pareto[/tag]who observed that 80% of income in Italy went to 20% of the population.

For my fellow JC students, just in case you are wondering why the name Pareto sounds so familiar in Economics, well, he is the exact same guy who introduced the concept of Pareto Efficiency which states that once the welfare of society is maximised, it is impossible for one individual to be better off without another individual being worse off.

This [tag]80/20 Rule[/tag] or also known as the [tag]Pareto Principle[/tag] has been applied to many areas. It is a common rule of thumb in business; e.g., “80% of your sales come from 20% of your clients.”

Dr. Joseph Juran recognized this universal principle he called the “vital few and trivial many” and reduced it to writing.

The original observation of wealth in Italy occurs in many different and mundane aspects too. For example, we wear our 20% most favoured clothes about 80% of the time and we spend 80% of the time with 20% of our acquaintances.

If you remembered last week, during the heat of the exam period, I tried to plot a graph relating effort, result and time? I call it the Effort-Result-Time Concept. Click on the link to see the graph.

Well, back then I didn’t know about this concept. A visit to my uncle’s place enlightened me about this and for students out there, I believe this is extremely true…

80% of the grades come from 20% of the effort. So why work so hard to get 100% when 80% is enough for an A? 20% of effort….Much less than what I had anticipated…Lol