Question: How does the ROI of the “important 20%” compare to the ROI of the “remaining 80%” of the input/investment/’cause’?

If doing (investing, ’cause’) the “important 20%” of a piece of work, yields 80% of the output (return, ‘effect’), the ROI would be 80% / 20% = 4.   Let’s label this ROI-20.

Completing the rest of that piece of work will require 4 times more work (investing, ’cause’) and yield only a quarter, 20%, of the output (return, ‘effect’).  The ROI would be 20% / 80% = 0.25.   Let’s label this ROI-80.

What’s interesting is the ratio between the two ROIs:   ROI-20 / ROI-80 = 4 / 0.25 = 16 times bigger ROI!

Few ideas for application:

– Individuals: if you are a smart cookie and do the “important 20%”, your boss will think that you’re doing work of 16 people!

– Development Teams: if you are in IT, ask the very, very hard question to Business – Why should you do the remaining 80% of the work as the ROI will be 16 times lower?
Note: If you do get a reasonable answer, perhaps the Business did not correctly identify the “important 20%”?

One caveat: be sure to remember that Joseph M. Juran, who named the rule “Pareto principle”,  later on preferred to call the rule “the vital few and the useful many” to clearly indicate that the remaining 80% of the causes should not be totally ignored.