The Pareto Principle – 80/20 Rule – Do More by Doing Less.

The simplest way to describe the Pareto Principle is the 80/20 rule: 80% of the results come from 20% of the causes. For example, 80% of a companies profits will generally come from 20% of the customers. This video provides many example of how the 80/20 rule can be applied.

We are doing more with less using artificial intelligence. We asked an AI chatbot about the Pareto Principle and this is what it said:

The Pareto principle, also known as the 80/20 rule, is a principle that suggests that 80% of effects come from 20% of causes. It is named after Italian economist Vilfredo Pareto, who observed that approximately 80% of the land in Italy was owned by 20% of the population.

The Pareto principle can be applied in a variety of situations and is often used to identify the most important factors or activities that contribute to a particular result. For example, in business, the Pareto principle might be used to identify the 20% of customers who generate 80% of a company’s revenue, or the 20% of product defects that are responsible for 80% of customer complaints.

The Pareto principle is not a hard and fast rule, and the exact percentages may vary depending on the situation. However, it can be a useful tool for identifying and prioritizing the most important factors or activities in a given situation.

The 80/20 rule can save a great deal a time whether you are a person or an organization. How many managers spend 80% of their time on the 20% of employees who cause the most issues. If you are in supply chain generally 20% of your suppliers cause 80% of the problems. Get rid of those suppliers and get 80% of the time back to focus on strategic activities instead of putting out fires.

Saying “No” and 80/20 Rule Quotes

“80% of the results come from 20% of the causes. A few things are important; most are not.” ~Richard Koch
“You have to decide what your highest priorities are and have the courage pleasantly, smilingly, and non-apologetically – to say “no” to other things. And the way to do that is by having a bigger yes burning inside.” ~Stephen Covey
“The difference between successful people and really successful people is that really successful people say no to almost everything.” ~Warren Buffett
“Doing less is not being lazy. Don’t give in to a culture that values personal sacrifice over personal productivity.” ~Tim Ferriss
“In business the 80/20 principle is behind any innovation, any extra value. It is an entrepreneurial principle, a formula for value creation utilized not only by entrepreneurs, but by most managers and organizations.” ~Richard Koch
“It’s only by saying NO that you can concentrate on the things that are really important.” ~Steve Jobs
“What you don’t do determines what you can do.” ~Tim Ferriss
“You think, well, focusing is saying yes. No, focusing is about saying no. Focusing is about saying no. And you’ve got to say no, no, no. When you say no, you piss off people.” ~Steve Jobs