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Pareto's Principle~~ 20/80 Rule - PowerPoint PPT Presentation

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”. How It Can Help You.

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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”.

• 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%

• 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!

• 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.

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

Let’s Take a Look! wealth.

• 20% of stock takes up 80% of space.

• 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.

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.

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)

Microsoft hamlets/villages)noted 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.

Global Income Distribution hamlets/villages)

• 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

20% of criminals account for 80% of the crimes! hamlets/villages)

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

Customer Service hamlets/villages)

• 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.

Quality Control hamlets/villages)

• 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.

20% of time (effort) accounts for 80% of results. hamlets/villages)

20% of clients are responsible for 80% of sales.

Revenue

Results Effort

20% of causes are responsible for 80% of consequences. hamlets/villages)

80% of consequences flow from 20% causes.

Cause and Consequences

Bell Curve Relationship hamlets/villages)

• All Life Fits a Bell Curve!

Bell Curve Quiz Scores hamlets/villages)

• 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.

Medications and Errors hamlets/villages)

• 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.

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% 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!

Collaborative Process hamlets/villages)

• Identify Shared Goals

• Clarify Common Values

• Identify Underlying Issues & Causes

• Determine Stakeholder Impact & Response

• Correct Any Knowledge Imbalance