80 - 20 Rule (Pareto Principle/Law)

is a general rule of thumb in business that says that 20% of the items produce 80% of the activity, while 20% of the product line produces 80% of the sales, 20 % of the customers generate 80% of the complaints, and so on. In evaluating any business situation, look for the small group which produces the major portion of the transactions you are concerned with. This rule is not exactly accurate, but it reflects a general truth, nothing is evenly distributed.

The Pareto Principle (80/20 rule) suggests that a small proportion of causes often accounts for a large proportion of results—e.g., a minority of products or customers generate most sales or issues. It is used for prioritization and focus.

- Used in planning, organizing, and controlling business operations.
- Used when setting KPIs, policies, procedures, and improving processes.

- Example: Management applies **80 - 20 Rule (Pareto Principle/Law)** when designing policies and monitoring performance against targets.

- Why it matters: Improves execution, accountability, and decision speed while reducing operational waste.