blog, Coaching, data science, Project Management, Statistics

Using the Pareto Principle to Drive Value in Project Management

What is the Pareto Principle

The Pareto Principle (also commonly known as the 80/20 principle), is an observation which states that 80 percent of outputs come from 20 percent of the inputs. It was first observed by the Italian economist Vilfredo Pareto, who observed that 80% of Italy’s wealth, came from 20% of its population. He found that this principle held roughly true in other countries and situations as well.

The Pareto Principle is a neat guide of describing distributions in real-life scenarios that holds true in a vast array of situations. That is, that each input in a scenario, is unequally distributed to the outputs of that situation.

For example;

  • A common adage on Computer Science is that 20% of features contribute 80% of usage
  • Microsoft also noted that 20% of bugs contribute 80% of crashes. While also finding that 20% of effort contributed 80% of features
  • 20% of customers contribute to 80% of income
  • 20% of workers contribute 80% of the work

It’s not simply a case of investing the same amount of input and getting an equal value out.

pareto principle graph

(Better Explained)

Why Use the Pareto Principle

I want to propose how valuable this observation is in project management and to consider using this to gain massive return on investment by adhering to it as a principle, beyond understanding the underlying statistic, whether in your own life or in your work.

If we accept that 20% of the effort produces 80% of the results in a project or product; it conversely holds true that 80% of the effort produces only 20% of the results. In investment terms, that is a massive investment of a resource for an increasingly diminishing return on investment (law of diminishing returns) – you wouldn’t want your investment banker running those odds, so why adhere to it in life or in project management?

Instead of investing so much more in terms of effort and resource to ‘complete’ a project or product, we could focus primarily on the efforts that produce the majority of the results and forget the rest, or at least use this to make an informed decision to prioritise  investments on other projects before coming back to ‘complete’ the project.

Considering this, with the 80% of resources saved, we can invest in further projects and products and get 80% return on each of them – huge returns for the same inputs!



As project managers, it’s our responsibility to find the most efficient way to get projects completed. There is a set of tasks that generate a disproportionate amount of work.

With this in mind, I want you to consciously make a decision on how we allocate resource, and not keep aiming for the perfect final product. You may very well want the perfect product, but the key is that we have a choice.

For Example;

  • Create 5 wire-frame prototypes instead of 1 detail one
  • Build 5 features with 80% of the functionality rather than 1 perfect one
  • Find a solution to 5 bug that solves the issue for 80% of users rather than 1 that resolves it for everyone

That said, if we still need the final product 100% completed, it is about making an informed decision now that will optimise our investments – focus on the 20%’ers first that produce the best bang for our buck, re-prioritising as we see fit, before returning to attain 100%.