Pareto's Principle~~ 20/80 Rule

1. Pareto's Principle~~ 20/80 Rule Daily reminder that 20% of your work is really important in any given moment; therefore, focus 80 % of your time, energy and talents that 20 percent. Don't just "work smart", work smart on the “right things”.

2. How It Can Help You • The value of the Pareto Principle is that it reminds us to focus on the 20% that matters. • Of the things we do, only 20% really matters, in any given moment. • Those 20% produce 80% of the results. • Identify and focus on those things. • When the crisis drills of the day begin to sap our time, energy and patience remind yourself of the 20 % you need to focus on. • If something in the schedule has to slip, make sure it's not part of that 20%

3. The Superstars! • 20 % of people produce 80 % of the results. • Therefore, helping the good become better is a better use of time than helping the great become terrific!

4. The Vital Few: What It Means • The 80/20 Rule means that in anything a few (20 %) are vital and many (80 %) are trivial. • In Pareto's case it meant 20 % of the people owned 80 % of the wealth. • In Juran's work he identified 20 % of the defects (error types) causing 80 % of the problems.

5. The original observation was in connection with income and wealth. Pareto noticed that 20% of the population owned 80% of Italy's wealth. After Pareto made his observation, he created a formula. Many others observed similar phenomena in their own areas of expertise. Quality Management pioneer, Dr. Juran, in the 1930s recognized a Universal Principle he called the “Vital Few & Trivial Many". As a result, the principle that 20 percent of something always are responsible for 80 percent of the results. You can apply the 80/20 Rule to almost anything, from the science of management to the physical world. Where It Came From

6. Let’s Take a Look! • 20% of stock takes up 80% of space. • 20% of your suppliers provide 80% your stock. • 20% of staff account for 80% sales. • 20% staff will cause 80% of problems AND • Another 20% staff will provide 80% of production. • It works both ways.

7. The principle is reflected in the Human Gestation period. The embryonic period constitutes 20% of the whole, with fetal growth taking up the rest of the time. 20% of carpet accounts for 80% of wear. 20% of the time spent on a project accounts for 80% of the results.

8. The sizes of human settlements. (few cities, many hamlets/villages) • The values of oil reserves in oil fields. (a few large fields, many small fields) Sizes of meteorites. (a few large, many small)

9. Microsoftnoted by fixing the top 20% of most reported bugs, 80% of the errors & crashes were eliminated. Mundane …We wear our 20% most favorite clothes about 80% of the time. Perhaps, we spend 80% of the time with 20% of our friends.

10. Global Income Distribution • Distribution of global income is very uneven. The richest 20% of the world's population controls 82.7% of the world's income. • World Gross Domestic Product Population Income • Richest 20% controls 82.70% of the world’s income • Second 20% controls 11.75% • Third 20% controls 2.30% • Fourth 20% controls 1.85% • Poorest 20% controls 1.40% United Nations Development Program Report

11. 20% of criminals account for 80% of the crimes! If we take the ten wealthiest individuals in the world, we see that the top three, Warren Buffett, Carlos Slim Helú, & Bill Gates, own as much as the next seven put together. Wealth

12. Customer Service • Focusing one's attention on those 20% of clients that contribute to 80% of the income. • 20% of clients take up the majority of one's time & may cause the most difficulty.

13. Quality Control • It is one of the key tools used in total quality control & Six Sigma. • The purpose is to optimize the good. • Minimize the defects. • 20% of causes are responsible for 80% of after effects.

14. 20% of time (effort) accounts for 80% of results. 20% of clients are responsible for 80% of sales. Revenue Results Effort

15. 20% of causes are responsible for 80% of consequences. 80% of consequences flow from 20% causes. Cause and Consequences

16. Bell Curve Relationship • All Life Fits a Bell Curve!

17. Bell Curve Quiz Scores • 20% will earn a C out of the 80% who take the quiz. • 20% will earn a B out of the 80% who take the quiz. • 20% will earn an A of the 80% who take the quiz. • 40% will fail the quiz! • Some instructors who ‘grade on the curve’, force the scores to fit the Model.

18. Medications and Errors • 20 % of Medications account for 80% of Errors. • 20% of Types of defects account for 80% of Errors. • 20% of Effort account for 80% of the Results.

19. Adaptability to Change Later Late Immediate Early Laggards Comers Comers Balk, it Reluctant Embrace, Step Back, Destroy will not 1st no then + spin, but open, Momentum work. will try. help others will do it. come around, Innovators.

20. Workload Efficiency • 20% of the staff completes 80% of the workload. • Don't just "work smart", work smart on the “right things”. • Train Up! • Better to help the Good become Better to Create and Empower more Superstars!

21. Collaborative Process • Identify Shared Goals • Clarify Common Values • Identify Underlying Issues & Causes • Determine Stakeholder Impact & Response • Correct Any Knowledge Imbalance

22. Time to Plant, Grow, Harvest & Replant