Expert answer:Understanding the Pareto Principle ( Write About a
Solved by verified expert:I have an assignment which is a case and answer this question:How would you use this to coach your sales reps?About a half page
understanding_the_pareto_principle.docx
Unformatted Attachment Preview
Understanding the Pareto Principle (The 80/20 Rule)
Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only
20% of the population.
More generally, the Pareto Principle is the observation (not law) that most things in life are not
distributed evenly. It can mean all of the following things:
▪
20% of the input creates 80% of the result
▪
20% of the workers produce 80% of the result
▪
20% of the customers create 80% of the revenue
▪
20% of the bugs cause 80% of the crashes
▪
20% of the features cause 80% of the usage
▪
And on and on…
But be careful when using this idea! First, there’s a common misconception that the numbers 20 and
80 must add to 100 — they don’t!
20% of the workers could create 10% of the result. Or 50%. Or 80%. Or 99%, or even 100%. Think
about it — in a group of 100 workers, 20 could do all the work while the other 80 goof off. In that
case, 20% of the workers did 100% of the work. Remember that the 80/20 rule is a rough guide
about typical distributions.
Also recognize that the numbers don’t have to be “20%” and “80%” exactly. The key point is that
most things in life (effort, reward, output) are not distributed evenly – some contribute
more than others.
Life Isn’t Fair
What does it mean when we say “things aren’t distributed evenly”? The key point is that each unit of
work (or time) doesn’t contribute the same amount.
In a perfect world, every employee would contribute the same amount, every bug would be equally
important, every feature would be equally loved by users. Planning would be so easy.
But that isn’t always the case:
The 80/20 rule observes that most things have an unequal distribution. Out of 5 things, perhaps 1 will
be “cool”. That cool thing/idea/person will result in majority of the impact of the group (the green
line). We’d like life to be like the red line, where every piece contributes equally, but that doesn’t
always happen.
Of course, this ratio can change. It could be 80/20, 90/10, or 90/20 (remember, the numbers don’t
have to add to 100!).
The key point is that most things are not 1/1, where each unit of “input” (effort, time, labor)
contributes exactly the same amount of output.
So Why Is This Useful?
The Pareto Principle helps you realize that the majority of results come from a minority of inputs.
Knowing this, if…
20% of workers contribute 80% of results: Focus on rewarding these employees.
20% of bugs contribute 80% of crashes: Focus on fixing these bugs first.
20% of customers contribute 80% of revenue: Focus on satisfying these customers.
The examples go on. The point is to realize that you can often focus your effort on the 20% that
makes a difference, instead of the 80% that doesn’t add much.
In economics terms, there is diminishing marginal benefit. This is related to the law of diminishing
returns: each additional hour of effort, each extra worker is adding less “oomph” to the final result. By
the end, you are spending lots of time on the minor details.
A Fun, Non-Math Example, Please
Everything is nice and rosy in the abstract. I want to give you a real example. Take a look at this
awesome video of an artist drawing a car in Microsoft Paint. It’s pretty phenomenal what can be
accomplished with such a basic tool:
Now let’s deconstruct this video. It’s about 5 minutes long, so each minute is about 20% of the way to
completion (of course the video is sped up, but we are only interested in relative times anyway). Take
a look at how the car evolved over time:
1:06 (Level 1) – Wireframe
2:00 (Level 2) – Basic coloring
3:05 (Level 3) – Beginning details: rims, windshield
4:04 (Level 4) – Advanced details: shading, reflections
5:05 (Level 5) – Finishing touches: headlights, background
Now, let’s say the artist was creating potential designs for a client. Given 5 minutes of time, he could
present:
▪
A single car at top quality (Level 5)
▪
A reasonably detailed car (Level 3) and a colorized wireframe (Level 2)
▪
5 cars at a wireframe level (5 Level 1s)
“But #5 is way better than #1!!!” someone will inevitably shout.
The point isn’t that #5 is better than #1 — it clearly is. The question is whether #5 is better than five
#1s, or some other combination.
Let’s say your customer doesn’t know whether they want a car, a truck, or a boat, let alone the color.
Spending the time to create a Level 5 drawing wouldn’t make sense — show some concepts, get a
general direction, and then work out the details.
The point is to put in the amount of effort needed to get the most bang for your buck — it’s usually in
the first 20% (or 10%, or 30% — the exact amount can vary). In the planning stage, it may be better
to get 5 fast prototypes rather than 1 polished product.
In this example, after 1 minute (20% of the time) we have a great understanding of what the final
outcome will be. Most of the “work” is done up front, in the sense of deciding the type of vehicle, body
style, and perspective. The rest is “filling in details” like colors and shading.
This isn’t to say the details are easy — they’re not — but each detail does not add as much to the
picture as the broad strokes in the beginning. The difference between #4 and #5 is not as great as #1
and #2, or better yet, a blank drawing and #1 (the time from 0:00 to 1:06). You really have to look
to see the differences on the car between #4 and #5, while the contribution #1 makes is quite
obvious.
Concluding Thoughts
This may not be the best strategy in every case. The point of the Pareto principle is to recognize that
most things in life are not distributed evenly. Make decisions on allocating time, resources and
effort based on this:
▪
Instead of 1 hour on a rough draft for an article you may write, spend 10 minutes on 6 outlines
for a paper / blog article and pick the best topic.
▪
Instead of investing 3 hours on a website, spend 30 minutes and create 6 different template
layouts.
▪
Rather than spending 3 hours to read 3 articles in detail (which may not be relevant to you),
spend 5 minutes glancing through 12 articles (1 hour) and then spend an hour each on the two
best ones (2 hours).
These techniques may or may not make sense – the point is to realize you have the option to focus on
the important 20%.
Lastly, don’t think the Pareto Principle means only do 80% of the work needed. It may be true that
80% of a bridge is built in the first 20% of the time, but you still need the rest of the bridge in order
for it to work. It may be true that 80% of the Mona Lisa was painted in the first 20% of the time, but
it wouldn’t be the masterpiece it is without all the details. The Pareto Principle is an observation,
not a law of nature.
When you are seeking top quality, you need all 100%. When you are trying to optimize your bang for
the buck, focusing on the critical 20% is a time-saver. See what activities generate the most results
and give them your appropriate attention.
…
Purchase answer to see full
attachment
How it works
- Paste your instructions in the instructions box. You can also attach an instructions file
- Select the writer category, deadline, education level and review the instructions
- Make a payment for the order to be assignment to a writer
- Download the paper after the writer uploads it
Will the writer plagiarize my essay?
You will get a plagiarism-free paper and you can get an originality report upon request.
Is this service safe?
All the personal information is confidential and we have 100% safe payment methods. We also guarantee good grades