Pareto Principle states that 80% of the consequences are derived because of 20% causes. Pareto Principle puts the onus on the fact that everything is never equal and often it is the minority that owns the majority. The Pareto Principle is known by several names like the 80/20 Rule, the Law of the Vital Few and the Principle of Factor Sparsity. What is the 80/20 Principle? The 80/20 Principle is considered one of the best ideas for time and life management. According to this theory, 20% of actions or inputs lead to 80% results or outcomes. This principle aims to understand which projects are important and which should be thus taken upon and which ones should be removed. This theory highlights an imbalanced relationship. A perfect example of the 80/20 Principle is its application to taxation in the United States. History of the Pareto Principle Pareto Principle was developed by Joseph M Juran, a management consultant and was named after Vilfredo Pareto, an Italian economist who had a powerful impact on Joseph. The Pareto Principle theory was created in context with quality control and improvement. The 80/20 rule has specific parameters and it explains power-law distribution. How Does the Pareto Principle Work? - 2 out of 10 items are worthy than the remaining 8 - Most people procrastinate on the 20% of items and are known as “vital few” - The 80% are the least important items and these are known as “trivial many’ Where to Apply the 80/20 Rule? It can be used in almost all the scenarios like - 80% of the results in a firm is because of the contribution of 20% of workers - 80% output is generated by 20% input - 80% profit occurs because of 20% investments - 20% of exercises will yield 80% results - 80% of the income of a firm incurs because of the 20% of its customers This video is on the Pareto Principle and it has the following sub-topics. Time Stamps 0:00 Introduction 00:21 Definition of Pareto Principle 00:44 What is the 80/20 Principle? 01:46 History of the Pareto Principle 02:29 How does the Pareto Principle work? 02:58 Where to apply the 80/20 Rule?