The Pareto Principle states, for many events, roughly 80% of results (effects) come from 20% of the inputs (causes). Hence also knowns as 80/20 rule.
While the actual % would change based on situation and context, it is almost always true that:
a small proportion of the efforts (inputs) towards certain areas generate a larger proportion of results (outputs).
The Pareto Principle provides a useful framework for understanding complex systems and identifying key areas for focus / improvement.
When correctly used by the Scrum Teams, it can help order Product Backlog Items (PBIs) that would yield most value, identify which retrospective improvement idea to pursue among many, optimize resources, and improve overall ROI.
Image source: Interaction Design Foundation
This 80-20 rule can be applied to many areas such as business, learning, finance, sales, marketing, customer service etc.
The Pareto Principle is named after Italian economist Vilfredo Pareto (1848-1923).