How to make millions with Just one RULE!
- Thread starter Botterman
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fun4uoc
Supreme Member
- Dec 25, 2007
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Otherwise know as Pareto's Principle
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.
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 your 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.
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.
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.
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.
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 your 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.
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.
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.
Allnightlong
Junior Member
- May 30, 2007
- 107
- 84
I found the 80/20 rule to be correct with most of the business related things I do... 20% of my websites bring in 80% of my revenue, 20% of my affiliates make 80% of my affiliate sales....
rudyvise
Regular Member
- Jul 6, 2008
- 359
- 178
I use the 99.9% to 0.1% rule myself.
99.9% of opportunities are garbage.
0.1% are like golddust.
This way you don't have to work very hard and you get rich on that one chance in a million.
It worked for me once before and i got very rich.
But that was 8 years ago and i'm still waiting for another 0.1% to come along.
99.9% of opportunities are garbage.
0.1% are like golddust.
This way you don't have to work very hard and you get rich on that one chance in a million.
It worked for me once before and i got very rich.
But that was 8 years ago and i'm still waiting for another 0.1% to come along.
laptopdiva
Junior Member
- Jul 31, 2008
- 105
- 111
It's so true, also when people buy ebooks. You know that 10% or less are going to actually put that information to good use.
So if you see a method posted on BHW you can be sure that only a handful will actually use it, and even less will stick with it. More for me!!!
So if you see a method posted on BHW you can be sure that only a handful will actually use it, and even less will stick with it. More for me!!!
rudyvise
Regular Member
- Jul 6, 2008
- 359
- 178
I was talking to this guy the other day who was telling me how hard internet marketing is to make money. Apparently he has been trying to make money from his blog on a full-time basis for about 1 year now and he has made literally pennies. He was asking me what he should do.
He had been taught that making money is the hardest thing and that you don't make anything online for years and years. Because he believes that - everything he does - ensures that he succeeds in his mission. i.e He never makes any money.
So he will always be part of the 99.9%.
I told him the truth.
Rudy
He had been taught that making money is the hardest thing and that you don't make anything online for years and years. Because he believes that - everything he does - ensures that he succeeds in his mission. i.e He never makes any money.
So he will always be part of the 99.9%.
I told him the truth.
Rudy
farfetchedmoney
Regular Member
- Oct 9, 2008
- 457
- 152
:lmao: perhaps 99.99% of post make no sense and the other .1% do, lol. :hmmmm2: then again that skrews the 80/20 rule :noidea:
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rudyvise
Regular Member
- Jul 6, 2008
- 359
- 178
Reckon 20% / 80% is just brainwashing.
99.9% / 0.1% is far more exciting.
99.9% / 0.1% is the place where you get extremely rich or extremely poor.
I also think 99.9% / 0.1% is where we are in general in life.
99.9% of what people say is crap.............0.1% geniune / good / profitable stuff.
Rudy
99.9% / 0.1% is far more exciting.
99.9% / 0.1% is the place where you get extremely rich or extremely poor.
I also think 99.9% / 0.1% is where we are in general in life.
99.9% of what people say is crap.............0.1% geniune / good / profitable stuff.
Rudy