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April 14, 2008

The origin of the 80-20 rule

80_20_rule

Properly called the "Pareto principle," it was formulated by 19th-century Italian economist Vilfredo Pareto, who noted that 20% of the population owned 80% of the property in Italy.

It was later generalized by Joseph M. Juran, a 20th-century management guru who noticed that a small number of problems produce most quality complaints.

He proceeded to formulate his "80-20" rule, which stated that 80% of a firm's problems stem from 20% of causes.

Now, don't you feel smart?

I was kind of hoping at least one of us would.

April 14, 2008 at 12:01 PM | Permalink


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Comments

Mb, I'd love to see your graph from Playfair. I always love historical documents. Is it online anywhere?

Posted by: Andrew | Apr 15, 2008 12:36:01 PM

I feel smart because I knew it before reading it here. University was not a complete waste of time, it seems...

Posted by: Jen | Apr 15, 2008 7:02:08 AM

Pareto is even more known for Pareto optimality, which is a notion of a set of economic advantages that do not leave anybody else worse off....I think. Hard to recall.

About the pie chart history, I do know this: William Playfair, Brit/Scot architect, drew the first one in about 1780. I have an image and citations, should you want to post this. The image concerns the spread and reach of the Turkish Ottoman empire. Why do I know this? I teach about the history of visual rhetoric and the scientific journal article. Woo Whoo! I have such odd little bits of knowledge.

Posted by: Mb | Apr 14, 2008 8:26:06 PM

I first heard it as 20% of beer drinkers drink 80% of the beer.

Posted by: Al Christensen | Apr 14, 2008 12:48:42 PM

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