What is the pareto principle?

Picture this: you’re in an orchard, picking apples. You notice that 80% of the apples come from just 20% of the trees. This simple observation is the essence of the Pareto Principle, also known as the 80/20 rule. It suggests that in many situations, 80% of the effects come from 20% of the causes.

In business, for example, it’s common to find that 80% of your revenue comes from just 20% of your customers. By focusing on that crucial 20%, you can maximize your results with less effort. The principle can also apply to other areas like project management or time management, where a small portion of tasks or activities may account for the majority of the impact or results.

Of course, the exact ratio can vary, and the principle isn’t always a perfect fit. But the key takeaway is that it’s essential to identify the most significant factors in a given situation and focus your efforts on them. By doing so, you’ll be using your resources more efficiently and making smarter decisions overall. So next time you’re tackling a challenge, think of the Pareto Principle, and ask yourself: “What’s my 20% that will produce 80% of the results?”