BY ALAN S. LEVINS AND KATHERINE M. KIMSEY|MARCH 1, 2016
This article by F. John Reh was last updated on thebalance.com on August 8 of this year. I included it in The Temptimes because keeping a productive office and an organized office are two inextricably linked goals. Since the Monroe theme of October is organization, this seemed an apropos edition to our blog collection. Enjoy!
In 1906, Italian economist Vilfredo Pareto created a mathematical formula to describe the unequal distribution of wealth in his country. Pareto observed that twenty percent of the people owned eighty percent of the wealth. In the late 1940s, quality guru, Dr. Joseph M. Juran, attributed the 80/20 Rule to Pareto, calling it Pareto’s Principle. Pareto’s Principle or Pareto’s Law is a useful tool to help you prioritize and manage the work in your life.
This article offers an overview of the rule and examples, and how it can help you improve your personal and professional productivity and effectiveness.
What It Means
The 80/20 Rule means that in any situation, 20 percent of the inputs or activities are responsible for 80 percent of the outcomes or results. In Pareto’s case, it meant 20 percent of the people owned 80 percent of the wealth. In Juran’s initial work applying the 80/20 rule to quality studies, he identified 20 percent of the defects causing 80 percent of the problems. Project managers know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of the time and resources.
Other examples you may have encountered:
- 80% of our revenues are generated by 20% of our customers.
- 80% of our complaints come from 20% of our customers.
- 80% of our quality issues occur with 20% of our products.
- 20% of our contributors provide 80% of our funding.
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- 20% of our employees are responsible for 80% of sick days.
- 20% of my ideas generate 80% of my traffic on my blog.
There are a nearly unlimited number of examples that we tend to apply the 80/20 rule to in our personal and working lives. Most of the time, we are referencing Pareto’s Rule without applying rigorous mathematical analysis to the situation.
We generalize about this 80/20 metric, but even with this sloppy math, the ratio is uncannily common in our world.
7 Areas the 80/20 Rule Can Help Your Productivity:
- If you scrutinize the items on your “To Do” list, chances are just a few of the items are tied to important issues. While we may take satisfaction in crossing a large number of the smaller issues off our task lists, the 80/20 rule suggests we should focus on the few, larger items that will generate the most significant results. The list might not grow much shorter, but you will be practicing effective prioritization.
- In assessing risks for an upcoming project, not every risk carries equal significance. Select the top risks that pose the highest potential for damage (given the probability of occurrence) and focus your monitoring and risk planning activities on those items. Don’t ignore the others, however, distribute your focus proportionately.
- As a sales representative, work hard to understand the attributes of the 20 percent of your customers that make up the majority of your revenues and invest your prospecting time on identifying and qualifying similar customers.
- Regularly evaluate the 80 percent of your customers that generate approximately 20 percent of your business and identify opportunities to shed those customers for those that drive better results. Some managers and firms actively cull their customer listings every few years, effectively firing the bottom performing customers.
- If you work in customer support or a call center, look for the 80/20 distribution where 80 percent of your customer calls or support issues are attributable to either 20 percent of your offerings or 20 percent of your total number of customers. For the offerings generating all of the calls, focus on root cause analysis to identify quality or documentation issues, and then take corrective action. For the high call volume customers, strive to understand the reason for their calls and offer alternative methods of obtaining answers.
- Entrepreneurs, soloists, and independent professionals should evaluate their workloads and assess whether the gross majority of their time is spent chasing small value activities, including administrative work that is easily and inexpensively outsourced.
- When evaluating your mid-year progress on your goals, focus on the few goals or activities that are most critical to your development or success. Similar to the task list, not all duties and goals are created equal.
Practical Limits to the 80/20 Rule:
As we’ve explored, the 80/20 Rule has many applications in our work and personal lives. However, there are opportunities to misapply this tool and make critical mistakes.
- You should not focus on just the 20 percent of top performers on your team at the expense of the other 80 percent. You are accountable for increasing the number of top performers as well as assessing and potentially eliminating those who are consistently poor performers.
- The 80/20 rule might suggest reducing the level of diversification you strive for with investments. Careful attention must be paid to your overall portfolio mix and adjustments made if only 20 percent of your investments are driving 80 percent of the results.
- While 20 percent of the time invested in a project through planning and execution might generate the majority of the results or progress, you cannot afford to ignore the details of the initiative.
The Bottom Line:
Pareto’s Principle or the 80/20 Rule is a useful construct when analyzing our efforts and outcomes. It is priceless when applied to task or goal lists, and it provides a useful analytical framework for many problem situations. Use it liberally, but don’t accept it as an absolute or you are likely to misstep.
This is an excerpt of an article that was last updated on August 22, 2016, on the balance.com
- Job shadow other employees in your company to learn about different jobs.
- Explore lateral moves to broaden and deepen your experience.
- Attend classes and training sessions to increase your knowledge.
- Hold book clubs at work to develop knowledge, and share terminology, concepts, and team building with coworkers.
- Seek a mentor from a different department that you’d like to explore.
It’s the slow season at work, and if you waste one more day playing “wastebasket ball”, you’re going to go crazy. But all your work for the day is done, and aside from counting down the minutes until lunch break, you’re out of ideas for things to do. Take control of your extra time and try these 10 ideas for productive things to do to fill your slow days at work.
- EVALUATE GOALS AND INTENTIONS
Both professional and personal intentions for the upcoming months or year are crucial for growth and prosperity. Make your intentions visible for you to see every day and share them with freely with others — so take time to evaluate your current goals and intentions, and consider setting some new ones.
- IMPROVE A PROCESS
“Noises” always come up when you’re running a process; especially a process is dynamic and changing all the time. To better your work and enhance your productivity, use the slow times to evaluate a particular process you use rather frequently and create more efficient ways to work.
- MAKE A TO-DO LIST
It’s hard to be productive when you’re low on mental energy. Try to manage your time wisely and organize your specific activities prior to the start of the day. The best way is to make a TO-DO LIST, which helps you to choose and complete tasks with better focus, and to reflect on your overall role and whether you’re achieving your larger objectives.
- TIDY DESK, TIDY MIND
On a normal day, it can be hard to find the time to organize your files properly. On slow days, clean off your desk, label your folders, clean up your inbox and archive your emails, and otherwise straighten out your notes and files. That way, you’ll be more prepared when you get busy again.
- GET AHEAD
Your work for the day may be done, but what about tomorrow’s work? Or next week’s work? If there’s anything you can do to get ahead, DO IT. Your workday may be slow today, but you never know when a crisis will hit and interfere with your regular workload.
- FIND A NEW PROJECT
It never hurts to ask your supervisors for an extra project if you’ve run out of things to do. They will be impressed by your initiative, plus you won’t be bored anymore. Make sure this is just a side project without a strict deadline though, in case you do get busy.
- HELP YOUR COLLEAGUES
Take a walk around the office and check in with your colleagues. If anyone looks overwhelmed, offer to help them out with something. Not only will you be building a rapport with your co-workers, but you’ll be able to call in a favor in the future if you ever need some help yourself.
- NETWORK WITH OTHERS
When you’re busy, your calls to clients are likely short and straight to the point. Take advantage of your free time and make a few courtesy calls to your customers, just to chat and check in; or write a thank you card. Building good relationships with your clients will help you to become more well-known in your industry.
- READ ARTICLES
Stay informed about your industry by subscribing to newsletters and reading the latest news in your field. Staying knowledgeable will give you an edge over your colleagues. If your industry is slow, read articles about current events instead to keep yourself up-to-date on world news.
- EXERCISE DAILY
It’s time to take action when you’re feeling bored. Exercising before work will give you an extra energy boost to carry you through the day. When you’re in the office, you can lift 5 pounds weights, or do some yoga and stretching poses designed to be done anytime and anywhere. Taking a quick break and walking around the block also refreshes and reenergizes.