The 80/20 Principle

The Pareto principle, also known as the 80/20 rule, is a theory maintaining that 80 percent of the output from a given situation or system is determined by 20 percent of the input. ... More generally, the principle can be interpreted to say that a minority of inputs results in the majority of outputs.

Some examples:

• 20% of criminals commit 80% of crimes

• 20% of drivers cause 80% of all traffic accidents

• 80% of pollution originates from 20% of all factories

• 20% of a companies products represent 80% of sales

• 20% of employees are responsible for 80% of productivity

• 20% of students have grades 80% or higher

And so on!

Knowledge of this natural phenomena can be leveraged in any endeavor! For instance in say a restaurant business. When you discover what menu items are responsible for 80% of the sales, you can use this info to help optimize menu offerings and supply needs, possibly eliminating items that don’t sell and reducing costs. Additionally you can apply 80/20 rule iteratively to improve and refine your optimization process.

Although 80/20 seems obvious in many ways, understanding that it exists and is a universal pattern, can help you use it as a tool in all situations!