I just landed my first civilian job, having been discharged from the Air Force a month prior. At the beginning of my Albertsons career in Boise, Idaho a short while passes when a printed article that spoke of the 80-20 rule, also known as Pareto’s principle arrives at my desk. Fast forwarding to today, the 80-20 rule seems to be cropping up in writings and conversations with regularity that I thought why not provide a short history and relay my initiation to the rule.
Joseph M. Juran, a Romanian engineer, and management consultant, in 1941, dubbed the 80-20 rule as Pareto’s principle crediting the work of Vilfredo Pareto. Vilfredo Pareto was an Italian economist at the University of Lausanne. His initial observation of distribution came from his garden, 20% of the peapods produced approximately 80% of all the peas. In 1896, he published his first paper “Cours d’économie politique” showing the distribution of land ownership in Italy. At the time he observed that 80% of all the land in Italy was owned by 20% of the population. Juran defined it as “the vital few and the useful many.”
Long ago when I became exposed to the 80-20 rule, I was a computer programmer at a time when Data Automation became known as Management information Systems (MIS) and not yet IT. No Mac or PC. We were very mindful of the time and resources it took to complete projects. Expending 20% of the effort to produce 80% of need was worth the payoff, both for developers and end-users. Conversely, we would spend 80% of our time to complete the remaining 20%. The vice president of MIS knew this and made sure each one of his staff members was onboard. Time is money axiom was definitely in play.
You can see the rule, or some form of, apply just about everywhere: world wealth distribution, healthcare resources in the United States, tax payer’s distribution, sales distribution. It is part of the DNA of humankind, natural phenomena. I heard an orator state, “if you were to take all the wealth in the world, redistribute it, in a matter of months the wealth would find its way back to 20% of the population”.
The 80-20 Rule or Pareto’s principle is not an absolute. The distribution could be 90-10, 70-30 or even 99-1. Regardless, there is a relationship between event causes and effect and I for one take into account when making business and scheduling decisions. Time and money are too precious.
Clint Joyce, the vice president who introduced me to the concept, continued to guide and educate me, for which I am forever grateful.