What is the 80/20 rule in business?
The 80/20 rule, or Pareto Principle, suggests that roughly 80% of results often come from 20% of causes - such as customers, products, or activities. In business, this means a small fraction of inputs usually drives the majority of outcomes.
Common 80/20 patterns:
20% of customers generate 80% of revenue.
20% of products or services produce 80% of profit.
20% of tasks drive 80% of strategic impact.
Leaders can use 80/20 by:
Identifying their most valuable customers, offers, and activities, then prioritizing resources there.
Reducing or eliminating low-impact work that consumes time without materially moving key metrics.
Kindred Consulting Group:
Applies 80/20 thinking within the Kindred Clarity Framework to pinpoint the few organizational changes that will unlock the most growth.
This keeps teams focused on the highest-leverage constraints instead of spreading effort thin.
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