In 1906, an Italian economist, Vilfredo Pareto, noticed that 80% of the wealth generated in Italy was owned by the top 20% of the population. In the 1940s, a business management expert, Dr. Joseph Juran, observed similar phenomena in other areas of businesses, and credited Pareto by calling it the Pareto Principle, also known as the 80-20 rule or more elaborately, “law of the vital few.” This becomes a rule of thumb in most businesses including sales, finance, production, and quality control. Its application even stretches beyond the business world, even to more mundane matters.
Some applications are:
· 80% of the defects caused 20% of the problems.
· Focusing the top 20% of your customer will generate 80% of your income.
· 80% of your sales comes from 20% of your clients.
· Fixing the top 20% of the bug will create a bug-free environment for 80% of the computer users.
· 20% of your workers will cause 80% of your problems.
· 80% of customer complains comes from 20% of your products.
· Of all the things you do during the day, only 20% matters.
As you can see, the rule of 80-20 is applicable almost everywhere. For your personal development, think and start to recognize what are the top 20% that matters to you. Start to cut down on things that are just taking a lot of your time. By focusing only on the 20% of the things that matter, you will reap 80% of the results. If you follow this principle everyday, you will become a more productive person than you are yesterday.
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