Criticism of the Pareto Principle

Posted on 2019-11-12

The Pareto principle is often used in project or time management and should also be useful for prioritizing User Stories in the Product Backlog. The applicability of the Pareto Principle is often uncritical. The fact that the Pareto principle is completely overrated when it comes to prioritizing user stories is already revealed by the fact that it does not say which 20% of the components of the product account for 80% of the value.

Vilfredo F. Pareto (1848-1923) was an Italian engineer, economist and sociologist. The principle named after him, also called Pareto effect or 80-to-20 rule, says that 20% of the total effort is sufficient to reach 80% of the result, so you need the additional 80% effort to the remaining 20 % of the result.


The Pareto principle is often used in project or time management and should also be useful for prioritizing User Stories in the Product Backlog. The applicability of the Pareto Principle is often uncritical. The fact that the Pareto principle is completely overrated when it comes to prioritizing user stories is already revealed by the fact that it does not say which 20% of the components of the product account for 80% of the value. The Product Owner has no practical benefit in recognizing that input and output should be in a 20 to 80 ratio. It does not change his job of creating a valuable product. The product owner must have the vision of which product will be successful in the market and what features it has to bring with it. It does not bother him if he comes up with 100 features and then repaints 80 of them. It should immediately find the 20 that create the value. However, according to Pareto, there should be only 4 properties that account for 64% (80% of 80%) of the original total score; and then, of course, ultimately a single property of the product, which is causal for 51.2% (80% of 64%) of the original overall result. That's nonsense.
The Pareto Principle is not a principle that could be used blindly to develop a valuable product as efficiently as possible. From this alleged principle one may therefore only gain the insight that the different properties of a product have different values ​​and some properties are out of all proportion to the effort required to develop them. But what qualities these are, and in what relation the precious to the merely laborious stand, the pareto principle can not begin to answer. It is therefore useless.


That the 80-to-20 rule does not apply regularly is shown by a variety of examples. The distribution of wealth, which was once cited as an example of the correctness of the "principle", proves to be wrong already because it is evolving and does not stop at 80:20. In 2019, according to wikipedia, 10% of the population owns 85% of the total assets. It has never been necessary to master 20% of all words in a language to master the language itself. On the other hand, you will hardly get a school degree if you only deliver 20%. 50% are basically a prerequisite for an exam. And a car will not drive even if you only mount 20% of the parts. With 20% color you will rarely be able to paint 80% of the walls of an apartment. The tank of a vehicle will have consumed 80% after 80% of the total journey and not 20%. You will not achieve muscle growth of 80% if you only do 20% of the basic exercises required. And even this blog was not yet 80% ready after 20%.
Stefan Jonsson