First, I must start by extending an apology for the delayed post for last week. Nevertheless, here we are.
Secondly, we move right into the Pareto Principle. I know that many entrepreneurs already understand this principle, and probably use it in their day-to-day decision considerations. For those who don’t we will simply say that this principle, also commonly referred to as the 80/20 rule, states that 80% of the output in any given situation or system is determined by 20% of the input. The principle is named after economist Vilfredo Pareto who first brought this principle into focus. Of course the 80/20 rule sounds like mathematics, isn’t it? There’s nothing to worry about, as we shall keep it simple and avoid the math.
So, how does this principle come into entrepreneurship anyway? What is an entrepreneur going to do with this principle? Is it really something worth spending time on or it’s just one of those ‘endless’ principles that people just keep dreaming and talking about? I think that this principle is very useful for an entrepreneur, and I guess you will be on my side by the time we are through with this article! I’m just going to dwell on examples where you can apply this principle and use it to steer your enterprise to greater heights. Don’t you like progress Mr. Entrepreneur?
I think we need to stop here for today. Don’t you think so? Just a word of wisdom and caution – don’t simply go ahead reading a riot act because of your intentions to abide by the 80/20 rule from this day forward. You might need to look deeper, consult a bit more, communicate and prepare people for change, and also get their buy-in to the implementation of this principle. If you move blindly and cause chaos in your enterprise due to your overzealous approach, you have only yourself to blame. Don’t say no one cautioned you, OK?
Until then – cheers and best wishes!
The Wise Entrepreneur