The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity) states that, for many events, roughly 80% of the effects come from 20% of the causes. Management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896, as published in his first paper, “Cours d’économie politique“. Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population.
Systems that are used by large numbers of people in a variety of ways. A few examples of the 80/20 rule include:
- 80 percent of a product’s usage involves 20 percent of its features.
- 80 percent of a town’s traffic is on 20 percent of its roads.
- 80 percent of a company’s revenue comes from 20 percent of its products.
- 80 percent of innovation comes from 20 percent of the people.
- 80 percent of progress comes from 20 percent of the effort.
- 80 percent of errors are caused by 20 percent of the components.
Figure out where an imbalance of effects exists. Where are you pouring most of your money? What do you spend most of your time working on? What aspect of your product holds the most value?
The 80/20 rule is useful for focusing resources and, in turn, realizing greater efficiencies in design. For example, if the critical 20 percent of a product’s features are used 80 percent of the time, design and testing resources should focus primarily on those features. The remaining 80 percent of the features should be reevaluated to verify their value in the design. Similarly, when redesigning systems to make them more efficient, focusing on aspects of the system beyond the critical 20 percent quickly yields diminishing returns; improvements beyond the critical 20 percent will result in less substantial gains that are often offset by the introduction of errors or new problems into the system.
All elements in a design are not created equal. Use the 80/20 rule to assess the value of elements, target areas of redesign and optimization, and focus resources in an efficient manner. Noncritical functions that are part of the less-important 80 percent should be minimized or removed altogether from the design. When time and resources are limited, resist efforts to correct and optimize designs beyond the critical 20 percent, as such efforts yield diminishing returns. Generally, limit the application of the 80/20 rule to variables in a system that are influenced by many small and unrelated effects.