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If you are or hope to one day be a leader or manager, it is now more important than ever to understand the 80/20 Principle. This article will provide you with valuable information on how to use this phenomenon in your business for success. Read on and enjoy! The Pareto Principle, often termed "the 80/20 rule" or the "law of the vital few," is a powerful management technique that can help you identify and prioritize key tasks that produce big results. The principle was discovered by an Italian economist named Vilfredo Pareto and later re-introduced and popularized by Dr. Joseph Juran in his 1939 book Quality Control: Principles & Practices . The Pareto Principle is based on the premise that 80 percent of the results come from 20 percent of the effort. It can be applied to small business, but it is especially effective in large organizations. The number 80 is represented by "phi" (φ) and represents the "rule of 80" or "Pareto Principle." The 20 represents the Pareto's Law which suggests that roughly 80% of our effort results in roughly 20% of our output, leading to 80% of our results. Therefore, if you are to get twice as much done in an activity, you should double your effort. The 80/20 Principle is used to illustrate this idea. As an example, if an organization spends $100,000 on a project, it might have the following results: Results after spending $100,000 on a project = 100% (or 1. 00) Proportion of results = 100% (1.00) = 1.00 Percentage of results = 100% (1.00) = 1.00 Percentage of effort spent on select tasks that produced results = 50% (0.50) Percentage of effort spent on all tasks that produced results = 50% (0.50) Percentage of effort spent on effort that did not produce results = 25% (0. 25) Percentage of effort spent on all tasks that did not produce results = 25% (0.25) One of the main advantages of Pareto's Law is that it can be applied to many different situations. Pareto's Law has been applied in areas such as economics, business management, science, and engineering. It can be used in project management and also within resource allocation to prioritize tasks by importance and results by value to the organization.4. Juran Institute Global Conference Presentation on Juran's Quality Principles https://www.youtube.com/watch?v=k_r_GN4Cq1c 7. cfa1e77820
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