What is the Pareto principle often referred to as?

The Pareto principle, often referred to as the 80/20 rule, suggests that roughly 80% of effects come from 20% of the causes. This principle is widely applicable across various fields, including economics, business, and quality control. For example, in business, it implies that a significant portion of sales or profits often comes from a small percentage of customers or products.

Understanding this principle helps organizations prioritize their resources effectively, focusing on the critical few factors that deliver the most significant results. The 80/20 breakdown highlights the importance of identifying and managing these key contributors to maximize efficiency and effectiveness.