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


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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”. How It Can Help You.

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Pareto's Principle~~ 20/80 Rule

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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”.


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%


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!


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.


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


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.


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)


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.


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


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


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.


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.


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

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

Revenue

Results Effort


20% of causes are responsible for 80% of consequences.

80% of consequences flow from 20% causes.

Cause and Consequences


Bell Curve Relationship

  • All Life Fits a Bell Curve!


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.


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.


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.


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!


Collaborative Process

  • Identify Shared Goals

  • Clarify Common Values

  • Identify Underlying Issues & Causes

  • Determine Stakeholder Impact & Response

  • Correct Any Knowledge Imbalance


Time to Plant, Grow, Harvest & Replant


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