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Pareto Principle


"the 80:20 rule"
"A minority of input produces the majority of results."

The 80:20 rule originated from Vilfredo Pareto, an Italian economist who studied 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 it's first economic use. Whilst 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).


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