For those new to marketing, Pareto’s principle or the 80/20 rule, may be something you may have never heard of before. If you ever read books on finance or books on how to manage a business, you may recall authors talking about the 80/20 rule, otherwise you may have never heard of it until now.
Exactly why the 80/20 rule is so significant is because the 80/20 rule teaches those who are unable to stick to a certain routine, focus on more of the important matter the most. Pareto’s principle was originally made to say that about 20% in Pareto’s principle, are the ones always responsible for 80% percent of the work. In other words, about 20% is responsible for 80% of the success factor. Now, don’t think that Pareto’s principle only applies to business, there are many instances where many scholars as well as large corporations see a similarity relative to Pareto’s principle. Pareto’s principle can also work both ways. Lets say you were running a toy factory where you constructed electric toy cars. Applying Pareto’s principle, it could also mean that about 20% of the defective electric toy cars are responsible for 80% of your time. In other words, it is less productive to spend your time with the defective electric toys than to just construct new ones because the 20% is all that matters the most.
The value of the Pareto Principle for a manager is that it reminds you to focus on the 20 percent that matters. Of the things you do during your day, that 20 percent is really all that matter because it is responsible for 80% of lets say your business’s success.
The reason why so many people utilize and incorporate Pareto’s principle is because it helps people, especially business owners, realize which area is best spent with their time. Because in the end of the day, all that matters is how productive you have been with the time given to you. It is so to speak that Pareto’s principle helps not only business owners but is widely used for many other scenarios as well to help best utilize time.
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Pareto’s Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of your work that is really important. It suggests not to just “work smart”, but to work smart on the right things.
