People think that creativity is largely a matter of talent, experience, or luck. They are wrong. Talent… — Richard Koch

In business the 80/20 principle is behind any innovation, any extra value. It is an entrepreneurial principle, a formula for value creation utilized not only by entrepreneurs, but by most managers and organizations.

Those who can create wealth — and know that they can — are able to dictate their own terms. Wealth is a means to happiness, but it is not the main one. What most people want is control over their lives. They want the ability to choose how they live: what work they do, the way they interact with friends and colleagues, the quality of their personal relationships, the way they view themselves.

In 1897, Italian economist Vilfredo Pareto (1848-1923) noticed a regular pattern in distributions of wealth or income, no matter the country or time period concerned. He found that the distribution was extremely skewed toward the top end: A small minority of the top earners always accounted for a large majority of the total wealth. The pattern was so reliable that Pareto was eventually able to predict the distribution of income accurately before looking at the data.

Pareto was greatly excited by his discovery, which he rightly believed was of enormous importance not just to economics but to society as well. But he managed to enthuse only a few fellow economists....

Pareto's idea became widely known only when Joseph Moses Juran, one of the gurus of the quality movement in the twentieth century, renamed it the "Rule of the Vital Few." In his 1951 tome The Quality Control Handbook, which became hugely influential in Japan and later in the West, Juran separated the "vital few" from the "trivial many," showing how problems in quality could be largely eliminated, cheaply and quickly, by focusing on the vital few causes of these problems. Juran, who moved to Japan in 1954, taught executives there to improve quality and product design while incorporating American business practices into their own companies. Thanks to this new attention to quality control, between 1957 and 1989, Japan grew faster than any other industrial economy.