Pareto Principle
The Pareto principle, also known as the 80/20 rule or the law of the vital few, is a concept named after the Italian economist Vilfredo Pareto. The principle states that, in many situations, approximately 80% of the effects come from 20% of the causes or inputs. It is a rule of thumb that suggests a significant portion of outcomes is determined by a small number of factors.
The principle was initially observed by Pareto in the context of wealth distribution, where he noticed that roughly 80% of the land in Italy was owned by approximately 20% of the population. However, the principle has been found to apply in various domains and disciplines beyond economics, such as business, productivity, time management, and even personal life.
For example, in business, the Pareto principle proposes that 80% of a company's revenue often comes from 20% of its customers or that 80% of a company's problems may arise from 20% of its products or services. Similarly, in time management, it implies that 80% of the results can be achieved with 20% of the effort invested.
The ratio of 80/20 is not meant to be taken literally in all cases; it simply represents an approximate proportion that can vary. The Pareto principle is a helpful guideline for prioritizing efforts and resources by focusing on the most influential factors or inputs to maximize efficiency and effectiveness.
While it is always desirable to achieve the 100% solution, sometimes that is not actually the best thing to do. In fact, sometime pursuing perfection can cause a negative outcome. If I were to get a perfect final exam score, but fail my other finals, that could put my overall college degree at risk.
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