# 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.

## Presentation on theme: "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."— Presentation transcript:

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.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.Of the things we do, only 20% really matters, in any given moment. Those 20% produce 80% of the results.Those 20% produce 80% of the results. Identify and focus on those things.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.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%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.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!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.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 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.In Juran's work he identified 20 % of the defects (error types) causing 80 % of the problems.

Where It Came From The original observation was in connection with income and wealth.The original observation was in connection with income and wealth. Pareto noticed that 20% of the population owned 80% of Italy's wealth.Pareto noticed that 20% of the population owned 80% of Italy's wealth. After Pareto made his observation, he created a formula.After Pareto made his observation, he created a formula. Many others observed similar phenomena in their own areas of expertise.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".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.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.You can apply the 80/20 Rule to almost anything, from the science of management to the physical world.

Let’s Take a Look! 20% of stock takes up 80% of space.20% of stock takes up 80% of space. 20% of your suppliers provide 80% your stock.20% of your suppliers provide 80% your stock. 20% of staff account for 80% sales.20% of staff account for 80% sales. 20% staff will cause 80% of problems AND20% staff will cause 80% of problems AND Another 20% staff will provide 80% of production.Another 20% staff will provide 80% of production. It works both ways.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)The values of oil reserves in oil fields. (a few large fields, many small fields) Sizes of meteorites. (a few large, many small)

Microsoft noted by fixing the top 20% of most reported bugs, 80% of the errors & crashes were eliminated. Mundane …W e 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.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 IncomeWorld Gross Domestic Product Population Income Richest 20% controls 82.70% of the world’s incomeRichest 20% controls 82.70% of the world’s income Second 20% controls 11.75%Second 20% controls 11.75% Third 20% controls 2.30%Third 20% controls 2.30% Fourth 20% controls 1.85%Fourth 20% controls 1.85% Poorest 20% controls 1.40%Poorest 20% controls 1.40% United Nations Development Program Report

Wealth 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.

Customer Service Focusing one's attention on those 20% of clients that contribute to 80% of the income.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.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.It is one of the key tools used in total quality control & Six Sigma. The purpose is to optimize the good.The purpose is to optimize the good. Minimize the defects.Minimize the defects. 20% of causes are responsible for 80% of after effects.20% of causes are responsible for 80% of after effects.

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

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

Bell Curve Relationship All Life Fits a Bell Curve!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 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 a B out of the 80% who take the quiz. 20% will earn an A of the 80% who take the quiz.20% will earn an A of the 80% who take the quiz. 40% will fail the quiz!40% will fail the quiz! Some instructors who ‘grade on the curve’, force the scores to fit the Model.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 Medications account for 80% of Errors. 20% of Types of defects account for 80% of Errors.20% of Types of defects account for 80% of Errors. 20% of Effort account for 80% of the Results.20% of Effort account for 80% of the Results.

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

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

Collaborative Process Identify Shared GoalsIdentify Shared Goals Clarify Common ValuesClarify Common Values Identify Underlying Issues & CausesIdentify Underlying Issues & Causes Determine Stakeholder Impact & ResponseDetermine Stakeholder Impact & Response Correct Any Knowledge ImbalanceCorrect Any Knowledge Imbalance

Time to Plant, Grow, Harvest & Replant

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