this time ~ this space

A group of friends were seated on my back deck complaining about how frustrated they were with their colleagues at work and in organizations because only a handful actually accomplished the work. Most are in supervisory or managerial positions. Story after story was told. Eventually the teen-aged daughter of one chimed in saying she had found the same thing when it came to the problem solving group project she had managed at school.

She had gone crazy trying to get work out of the other group members. She hated being a group “manager” and feels she would have done a better job and got a higher mark if she had been allowed to work on her own. Worse yet she has an assignment to write an essay on everything she had learned from participating in the project and it’s due tomorrow.

I spoke up saying: “Well, it’s the Pareto Principle. It’s a given 80% of what really counts gets done by 20% of the people, take or give a few,” and I was greeted with blank stares. So I motioned the teen into the house, booted up my computer and did some online searching.

After the searching was done and the website urls were noted I got a hug from the teenager who told me two things. The first was that she was now going to include the Pareto Principle in her essay. And the second was that she was going to look for a career where she could work independently because she never wanted to be a manager ever again.

The Pareto Principle
In the late 1800s, economist and avid gardener Vilfredo Pareto established that 80% of the land in Italy was owned by 20% of the population. While gardening he later observed that 20% of the peapods in his garden yielded 80% of the peas that were harvested. From these and other observations, Pareto advanced the theory of logarithmic law of wealth distribution, or what has come to be called the Pareto Principle.

It was in 1941 that Joseph Juran discovered the work of Vilfredo Pareto. Juran expanded the Pareto principle applying them to quality issues (e.g. 80% of a problem is caused by 20% of the causes). Juran went on to use the phrase “Pareto Principle” as a way of describing any maldistribution, particularly quality. Simply put, a few account for most. Juran calls this, the separation of the vital few from the trivial many.

Pareto’s Law is now a management technique more commonly known as the 80/20 rule. Mathematically, 80:20/80:20/80:20 would give 96.2%. That is 3 successive paretos almost does the task. [Only as long as Murphy's Law is held in check.]

The Pareto Principle or the 80:20 Rule has proven its validity in a number of other areas. In the business world, it has been found that the principle could be applied to many areas, such as:

• Applied to Meetings: 80% of decisions come from 20% of meeting time.
• Applied to Managerial Headaches: Roughly 80% of your managerial problems and headaches are caused by just 20%of your problems.
• Applied to time management and your daily To-Do List: 80% of your measurable results and progress will come from just 20% of the items on your daily To-Do list. The major problem is that most people are so busy fighting fires that they never get around to the most vital few activities that will lead to the greatest results.
• Applied to Interruptions: 80% of a Manager’s interruptions come from the same 20% of people
• Applied to product defects: Roughly 20% of the input errors typically cause the lion’s share of defects.
• Applied to Salespeople: Roughly 20% of a sales force will develop 80% of the annual results.
• Applied to Customer Complaints: Roughly 80% of customer complaints are about the same 20% of your projects, products or services.
• Applied to Business Units: Roughly 20% of a company’s business units will produce 80% of the annual revenue.
• Applied to Advertising: Roughly 20% of your advertising will produce 80% of your campaign’s results. If businesses could only determine which 20% of their advertising was really working, U.S. businesses could save literally billions in advertising costs each year.

Application
Use of the Pareto Principle or “Pareto thinking” can become way of life that improves problem-solving efficiency. Rather than wasting time, energies and money on efforts to correct everything, the experienced problem-solver will focus his attention only on those few variables which are shown to account for most of the problem.

An increased ability to separate the essential from the non-essential will improve with practice, especially if that practice involves use of the actual data and not just “eye-balling” the situation.

Once established this approach can become a normal reaction to solving problems. In time an experienced “Pareto thinker” can even make quick, accurate judgment calls without taking the time to get the data. Source

Related blog post: Top Twenty Time Savers