Distinguishing the ‘Important Few’ from the ‘Trivial Many’

Vilfredo Pareto was an Italian economist who observed that in the Italy of his day, 80% of the wealth was owned by 20% of the population. The Pareto Principle states that 80% of results flow from 20% of their causes. Though the percentages may not always be exact, there is often a disproportionate effect by an ‘important few’ causes.

So, for example:

80% of sales come from 20% of product lines in a supermarket (or warehouse).

80% of wear (and dirt) on a carpet is in the 20% of surface area nearest to the door.

80% of profits come from the best 20% of customers.

80% of headaches are caused by those few 20% of your colleagues(!).

etc…

The point is that if you can distinguish the ‘important few’ from the ‘trivial many’ then you can focus on where attention is most needed – on the positive side those few most profitable customers, on the negative side, the few causes of most of your problems.

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