No. 140 · Work · Economics
Pareto Principle
A small share of causes usually produces most of the results.
In the Almanac
“Juran’s vital few”, 1951 · “Camden Coalition”, 2007–2020
Both stories in full, three ways to use it and where it misleads.
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Questions
What is Pareto Principle?
The Pareto Principle, or eighty-twenty rule, says a few causes usually drive most of the effects: a few customers bring most revenue, a few defects cause most failures. The exact split varies, but the lopsidedness is common.
How do you use Pareto Principle?
Use it to rank tasks, spending and time by impact, and tackle the vital few first. Just remember that finding the big causes is easier than fixing them, and the trivial many still count.
When does Pareto Principle matter?
Pareto Principle is one of the 43 mental models for work, the situations where you ask: How do I get the right things done? Within that, it belongs to “Focus and priorities”, alongside Bikeshedding, Law of Diminishing Returns and Leverage.
What is an example of Pareto Principle?
Two stories show it at work: Juran’s vital few (1951) and Camden Coalition (2007–2020). Both are told in full in The Mental Models Daily Almanac, which has two stories for each of its 365 models.
Which mental models are related to Pareto Principle?
Power Law, Bottlenecks and Bikeshedding. Pareto Principle itself comes from economics.