Posted by Dave Lorenzo - Business Coach

Many people call the 80/20 rule The Pareto Principle, since it is often attributed to Italian economist Vilfredo Pareto. He created a mathematical formula to describe the unequal distribution of wealth in his country (as measured by land ownership). Pareto observed that 20 percent of the people owned 80 percent of the land. In the late 1940s, Dr. Joseph Juran took Pareto’s name and his description of the economic state of Italy in 1906 and used it to describe his “theory of the vital few and the trivial many.”

The underlying theory is that a few (20 percent) greatly influence the outcome of a situation and the many (80 percent) have a limited impact. When he applied this theory to manufacturing, Juran discovered that 20 percent of the defects in products were causing 80 percent of the problems for customers. In working on a project, you can almost always predict that 20 percent of the work (the first 10 percent and the last 10 percent) will take up 80 percent of your time. There are literally hundreds of examples of the few requiring more resources than the many.

Although this law should not be interpreted literally, a successful individual uses it to her advantage every day. She focuses her time and effort on the vital few things that influence the greatest results. She uses this as a form of mental leverage. She focuses on the most productive aspects of everything she does and works around or delegates the least productive aspects of her work. Perhaps the greatest proof of this principle lies in your own life. Think back to something that you are particularly proud to have accomplished. On a sheet of paper, write down all the tasks that you performed in order to bring about this achievement. As you look at those tasks, think about those that were high value tasks and those that you could have avoided. You will find that consistent effort focused on a few critical tasks helped you achieve your desired results.

The best way to use this principle in a forward-looking manner is to examine any particularly difficult task on which you’re currently working. Look closely at the desired outcome and make a list of the steps necessary to achieve that result. As you look over your list, analyze which tasks will provide you with the best results (both in quality and quantity). Once you have determined which tasks are the vital few, attack them with all of your effort. You will often find that the momentum of attacking the most critical items at the beginning of a project will help sustain your effort to complete the project in a shorter time period than you originally anticipated.

Filed under: Personal Strategic Planning
TrackBack URI     

1 Response »

Comments

1. The 80/20 rule runs my life. As a director of a multimillion dollar company I have to look at everything from this perspective. Good job on the post!

   www.developingcareers.com

   Comment by erik — January 5, 2006 @ 23:05

RSS feed for comments on this post. TrackBack URI

Leave a comment

Line and paragraph breaks automatic, e-mail address never displayed, HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <code> <em> <i> <strike> <strong>

Name (required)

E-mail (required)

URI

Your Comment