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More on the Pareto Principle

We have looked at the Pareto Principle a few times in our blogs at InnerActive Consulting Group.   Today we will look at this important principle from the perspective of Malcolm Gladwell, who has several very successful business books that many great leaders as well as business coaches follow.  His book, “The Tipping Point:  How Little Things Can Make a Big Difference”, contains many nuggets of business (and life) brilliance.

Most of life follows the Pareto Principle.  So…what’s that?  The Pareto Principle is also known as the 80/20 Rule.  We’ve all heard of this rule and it is in practice in most aspects of our lives.  Simply stated, the principle submits that 80% of effects come from 20% of causes.   Additionally, the Pareto Principle is referred to as the “law of the vital few” and the “principle of factor sparsity”.

Italian economist, Vilfredo Pareto, first wrote about this phenomenon in 1906.  Pareto developed a mathematical formula to document his findings that 20% of the population owned 80% of the land.  Pareto was also able to establish that 80% of the peas in his garden came from 20% of the plants.

Common Examples of the Pareto Principle:

  • 80% of employee problems are created by 20% of employees
  • 80% of your sales come from 20% of your customers
  • 80% of results come from 20% of input
  • 80% of employee productivity comes from 20% of the employees

According to Gladwell, Tipping Points follow the Pareto Principle stating, “In any situation roughly 80 % of the work will be done by 20% of the participants.”   There are many important points to cover from Gladwell’s book(s) and in subsequent posts we will look at his philosophies on Connectors, Mavens, and Salesmen as well as well as some of the other laws and factors that he has identified.

“Are we doing things right or are we doing the right things?”     Judy Bell

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Judy W Bell

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