You and the Pareto Princple

The Pareto principle, also known at the 80-20 rule, the vital few and the principle of factor sparsity states that 80% of the effects come from 20% of the causes.

Business management thinker Joseph Juran suggested this principle and named it after Italian economist Vilfredo Pareto who observed in 1906 that 80% of the land was owned by 20% of the population.

He further developed the principle by observing that 20% of the pea pods in his garden contained 80%  of the peas. Business people have taken this a few steps further and acknowledge that 20% of the customers bring in 80% of the revenue, 20% of a sales team bring in 80% of the business.

In manufacturing, 80% of your inventory will come from 20% of your suppliers, 20% of your inventory takes up 80% of the space, 20% of the staff will create 80% of the problems, There have been studies that 20% of the population use 80% of health care resources, 80% of the crimes are committed by 20% of the criminals, etc.

Depending on what you are looking at and how you are categorizing it, you can use the Pareto principle to identify both the critically good and the critically bad.

Over the last few years, businesses have laid off a lot of people. The truth is, they laid off the bottom 20-50% of their staff. Since it became okay for businesses to let everyone know that they were downsizing, right-sizing or reorganizing, this was a perfect opportunity to get rid of the people who were not performing.

The majority of business managers, owners and executives have been exposed to this rule at some point in their career and they believe it. It’s up to you to prove to them during your entire term of employment that you are in the smaller percentage of employees who contribute to the larger percentage of results.

In your job search, you want to be one of the amazingly great…the vital few. You want to demonstrate that you are one of the 20% who will achieve the 80%.

Everything you do, your approach, your resume, your conversations, your manner of speech and the way you dress for the interview has to be top-notch. You have to demonstrate that you are the best candidate for the company where you are applying.