IN OUR PRESENT TIME ERA CALLED kli-yug, 80/20 RULES OUR LIFE IN RELATIONSHIP, BUSINESS, WEALTH, ETC......
Posted by Vishva News Reporter on February 12, 2009

 

 

The 80-20 Rule states that 80% of our results are derived from 20% of our efforts.

THE 80/20 RULE
FOR EFFECTIVE WAY TO MANAGE LIFE

80% of all of our results
in business and in life
come from only
20% of our efforts!

What It Means

  • The Pareto's 80/20 Rule means that in anything a few (20 percent) are vital and many(80 percent) are trivial.  Examples:
     
    • 20 percent of the people owns 80 percent of the wealth.
       
    • 20 percent of the defects causing 80 percent of the problems.
       
    • 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of your time and resources.
       
    • 20 percent of staff will cause 80 percent of  problems, but another 20 percent of your staff will provide 80 percent of your production.
       
    • 80 percent of your sales will come from 20 percent of your sales staff.

 

DON'T JUST "WORK SMART"
WORK SMART ON RIGHT THINGS

WORK INTELLIGENT BUT  LAZY

How 80/20 Rule Can Help You
To Figure Out
"Vital Few Trivial Many"

  • Of the things you do during your day, only 20 percent really matter.
     
  • Therefore focus on the 20 percent that matters.
     
  • Focus 80 percent of your time and energy on the 20 percent of you work that is really important.
     
  • Those 20 percent produce 80 percent of your results.

Vilfredo Pareto's Principle, or The "Pareto Principle," is more commonly known as the 80-20 rule. It suggests that a ratio of approximately 20% to 80% can be found as an effective measure for most things in life. Whether revenues generated per customer or value for hours worked, it usually can be found that 80% of all of our results in business and in life come from only 20% of our efforts!

As importantly, the 80-20 ratio seems to hold true for many input/outputs, causes/consequences, or efforts/results. It also holds true across the spectrum of relationships, business, finances, time— whatever the case may be.

Richard Koch, author of The 80/20 Principle, suggests that the key to earning more and working less is to pick the right thing to do and only those things that add the highest value. Contrary to public belief, "be intelligent and lazy" is NOT an oxymoron— in fact, it's an important theme of this book! Discarding low value activities in all areas of your life, the true essence of the Pareto Principle, will create the time and freedom for you to enjoy a more richly endowed lifestyle.

To learn in-depth about this 80/20 phenomenon please click on the line outside the box and MAKE YOUR TOMORROW HAPPIER THAN TODAY.....with all the time, money, energy and emotions and hassles you will save.......

PVAF shares this knowledge news as part of its mandate to empower the humanity to alleviate poverty with KNOWLEDGE THROUGH EDUCATION

GOES BACK TO ARCHIMEDES PRINCIPLE?



 

Pareto's Principle - The 80-20 Rule

ABOUT Management: Your Guide to Management.: F. John Reh,

How the 80/20 rule can help you be more effective:

In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth.

In the late 1940s, Dr. Joseph M. Juran inaccurately attributed the 80/20 Rule to Pareto, calling it Pareto's Principle. While it may be misnamed, Pareto's Principle or Pareto's Law as it is sometimes called, can be a very effective tool to help you manage effectively.

Where It Came From

After Pareto made his observation and created his formula, many others observed similar phenomena in their own areas of expertise. Quality Management pioneer, Dr. Joseph Juran, working in the US in the 1930s and 40s recognized a universal principle he called the "vital few and trivial many" and reduced it to writing.

In an early work, a lack of precision on Juran's part made it appear that he was applying Pareto's observations about economics to a broader body of work. The name Pareto's Principle stuck, probably because it sounded better than Juran's Principle.

As a result, Dr. Juran's observation of the "vital few and trivial many", the principle that 20 percent of something always are responsible for 80 percent of the results, became known as Pareto's Principle or the 80/20 Rule.

You can read his own description of the events in the Juran Institute  For Quality Leadership article titled Juran's Non-Pareto Principle.

What It Means

The 80/20 Rule means that in anything a few (20 percent) are vital and many(80 percent) are trivial. In Pareto's case it meant 20 percent of the people owned 80 percent of the wealth.

In Juran's initial work he identified 20 percent of the defects causing 80 percent of the problems.

Project Managers know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of your time and resources.

You can apply the 80/20 Rule to almost anything, from the science of management to the physical world.

You know 20 percent of you stock takes up 80 percent of your warehouse space and that 80 percent of your stock comes from 20 percent of your suppliers.

Also 80 percent of your sales will come from 20 percent of your sales staff. 20 percent of your staff will cause 80 percent of your problems, but another 20 percent of your staff will provide 80 percent of your production. It works both ways.



 

Vilfredo Pareto
I
talian sociologist, economist and philosopher

(July 15, 1848 - August 19, 1923)
Click here to read about Pareto on Wikipeida - The free online encyclopedia


How It Can Help You

  • The value of the Pareto Principle for a manager is that it reminds you to focus on the 20 percent that matters.
     
  • Of the things you do during your day, only 20 percent really matter.
     
  • Those 20 percent produce 80 percent of your results. Identify and focus on those things.

When the fire drills of the day begin to sap your time, remind yourself of the 20 percent you need to focus on. If something in the schedule has to slip, if something isn't going to get done, make sure it's not part of that 20 percent.

Superstar Management

There is a management theory floating around at the moment that proposes to interpret Pareto's Principle in such a way as to produce what is called Superstar Management.

  • The theory's supporters claim that since 20 percent of your people produce 80 percent of your results you should focus your limited time on managing only that 20 percent, the superstars.
     
  • The theory is flawed, as we are discussing here because it overlooks the fact that 80 percent of your time should be spent doing what is really important.
     
  • Helping the good become better is a better use of your time than helping the great become terrific.

Apply the Pareto Principle to all you do, but use it wisely.

Manage This Issue

  • Pareto's Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of you work that is really important.
     

  • Don't just "work smart", work smart on the right things.

 



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