What Is Pareto Analysis?

pIn the early 1900s, Italian economist Vilfredo Pareto, made an interesting observation. He noticed that 80% of the land in Italy was owned by just 20% of the people. But what was more interesting, is that this relationship was repeated in other countries throughout Europe.

Over time, he realised that this 80/20 relationship was not limited to land ownership, or limited to human behaviour. He discovered that even nature exhibits the existence of 80/20 relationships – illustrated by the fact that 20% of the pea pods in Pareto’s garden produced 80% of the peas he harvested …

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As a decades-long practitioner of Pareto thinking, or applying the 80/20 principle, this morning’s email that I received from Todd Brown regarding what to focus on with your marketing really resonated. Too many of us focus on the minors. This was a reminder to me – yes – I also have to frequently check myself – as it is so easy to get sucked into irrelevant and low value activities.

Now Todd advocates that we stop focusing on ‘things that whisper’, and rather to apply our attention to the ‘things that scream’.

Being from South Africa, we’ve learnt that to ensure survival, we actually really need to pay attention to ‘Things That Roar!’ 🙂

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