The concept of “The 80/20 Rule” is widely recognized. However, that does not mean it is universally recognized. Why don’t we take a minute to ensure that we have a common understanding of this important concept?
The 80/20 Rule originated with an Italian economist named Vilfredo Pareto, who studied the distribution of wealth in a variety of countries around 1900. Pareto concluded that there was a predictable imbalance in the distribution of wealth, with approximately 80 percent of the wealth in most countries controlled by approximately 20 percent of the people. This observation eventually became known as “Pareto’s Principle” or “The 80/20 Rule”.
Today, The 80/20 Rule is used to describe any scenario where the majority of results come from a minority of inputs or participants.