This logo isn't an ad or affiliate link. It's an organization that shares in our mission, and empowered the authors to share their insights in Byte form.
Rumie vets Bytes for compliance with our
Standards.
The organization is responsible for the completeness and reliability of the content.
Learn more
about how Rumie works with partners.
Have you ever felt like you're putting a lot of effort into solving a problem but not getting the desired results?
The Pareto Principle, also known as the 80/20 rule, can help you identify the top 20% of the causes that are responsible for 80% of the problems. By focusing on these causes, you can resolve problems more efficiently and save time and effort.
Photo by Austin Distel on UnsplashDid you know?
The origin of the Pareto principle goes back to 1896 when Vilfredo Pareto, an economist from Italy, saw that only 20% of the population owned 80% of the land in Italy. He also noticed a similar pattern in his garden where 80% of the fruit was produced by only 20% of the plants. His principle states that a significant portion of effects (80%) comes from a small portion of causes (20%).
Step by Step Guide to Applying the Pareto Principle
Create a list of all the problems you're experiencing related to a particular situation.
Identify the root causeof each problem.
Give each problem a score according to its impact on your progress.
Group the problems that have common causes together and add up their scores.
Focus on the group with the highest score (impact) and brainstorm solutions.
Take action by implementing the solutions and monitoring the results.
Quiz
When using the Pareto Principle to solve a problem, you should focus your efforts on the part of the problem that:
The Pareto Principle suggests focusing on the part of the problem that can solve multiple related issues at once.
An Example of the Pareto Principle in Action
Salma makes handmade products at home and sells them online.
She realizes she's not getting enough sales through her website. She decides to apply the Pareto Principle to solve her problem.
Step 1: Salma created a list of problems related to her situation.
Lack of social media presence
Limited product variety
High product prices
Poor website design
Slow website loading time
Ineffective use of email marketing
Limited payment options
Not enough discounts offered
Step 2: She determined the root causes.
Salma realized that her problems are mostly linked to ineffective marketing and pricing strategies, and technical issues related to her website.
Step 3: She gave a score out of a total of 100 points to each problem based on how each area impacts her sales.
Lack of social media presence 40/100
Limited product variety 5/100
High product prices 5/100
Poor website design 10/100
Slow website loading time 10/100
Ineffective use of email marketing 20/100
Limited payment options 5/100
Not enough discounts offered 5/100
Step 4: She organized the list of problems.
Salma grouped the problems according to their root causes.
She noticed that marketing related issues — lack of social media presence and ineffective use of email marketing — have the biggest impact on her sales.
Step 5: She developed a solution and implemented it.
Salma decided to hire a marketing professional to help her improve her social media presence and find new channels to market her products.
Result
Salma saved time and energy by hiring a marketing professional, and now she's working on developing new products for her business. Improving her sales also allowed her to have more financial resources to improve her website.
Pros and Cons of Applying the Pareto Principle
Advantages
It can help you:
Take Action
Applying the Pareto Principle to real-world challenges can help you improve your problem-solving skills.
This Byte has been authored by
Suzanne Mohamed
Learning Designer