The Pareto principle, or the 80/20 rule, states that, for many events, roughly 80% of the effects come from 20% of the causes. The principle is named after Italian economist Vilfredo Pareto, who showed that approximately 80% of the land in Italy, was owned by 20% of the population – a remarkably consistent figure around the world.
The distribution is claimed to appear in several different aspects of business, e.g.
80% of a company’s profits come from 20% of its customers
80% of a company’s complaints come from 20% of its customers
80% of a company’s profits come from 20% of the time its staff spend
80% of a company’s sales come from 20% of its products
80% of a company’s sales are made by 20% of its sales staff
It was whilst pondering this phenomenon that I thought about how this principle might be related to job satisfaction, personal happiness and effectiveness.
When I think back to my role as a senior leader in public service I now recognise that probably 80% of my satisfaction came from 20% of my remit. In my current role working with senior leaders in the commercial and public sectors I’m increasingly finding similar proportions afflicting my clients.