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"": "Pareto's Principle - The 80-20 Rule
How the 80\/20 rule can help you be more effective.
In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80\/20 Rule to Pareto, calling it Pareto's Principle. While it may be misnamed, Pareto's Principle or Pareto's Law as it is sometimes called, can be a very effective tool to help you manage effectively.
Where It Came From
After Pareto made his observation and created his formula, many others observed similar phenomena in their own areas of expertise. Quality Management pioneer, Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal principle he called the \"vital few and trivial many\" and reduced it to writing. In an early work, a lack of precision on Juran's part made it appear that he was applying Pareto's observations about economics to a broader body of work. The name Pareto's Principal stuck, probably because it sounded better than Juran's Principle.
As a result, Dr. Juran's observation of the \"vital few and trivial many\", the principle that 20 percent of something always are responsible for 80 percent of the results, became known as Pareto's Principle or the 80\/20 Rule. You can read his own description of the events in the sidebar link d Juran's Non-Pareto Principle.
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