The Pareto Principle
The Pareto principle, also known as the 80-20 principle, says that 20% of the issues will cause you 80% of the headaches. This principle is also known as The Law of the Vital Few. In this post, I'll describe how the Pareto principle can guide your work to provide maximum benefit. I'll also describe a way to question the information at hand using a technique known as 5 Whys.
The 80-20 rule states that when you address the top 20% of your issues, you'll remove 80% of the pain. That is a bold statement. You need to judge its accuracy yourself, but I've found it to be uncannily accurate.
The implications of this principle can take a while to sink it. On the positive side, it means you can make a significant impact if you address the right problems. On the down side, if you randomly choose what issues to work on, it's quite likely you're working on a low-value problem.
Not quite enough time
When I first heard of the 80-20 rule I was bothered by another concern: What about the remaining problems? You should hold high standards and strive for a high-quality network, but maintaining the illusion of a perfect network is damaging. If you feel that you can address 100% of the issues, there's no real incentive to prioritize. I heard a great quote a few months back:
"To achieve great things, two things are needed; a plan, and not quite enough time." - Leonard Bernstein
We all have too much to do, so why not focus our efforts on the issues that will produce the most value? This is where having Top-N reports from your management system is really helpful. Sometime you need to see the full list of issues, but only occasionally. More often, this restricted view of the top issues is a great way to get started on your Pareto analysis.
3G WAN and the 80-20 rule
A few years back, I was asked to design a solution for rapid deployment warehouses in remote locations. After an analysis of the options I ran a trial using a 3G-based WAN. We ran some controlled tests, cutting over traffic for 15 minutes, using some restrictive QoS policies. The first tests failed with a saturated downlink.
When I analyzed the top-talkers report for the site I saw something odd. It seemed that 80% of the traffic to the site was print traffic. It didn't make any sense to me, but the systems team verified that the shipping label printers use an 'inefficient' print driver.
At this point I could have ordered WAN optimizers to compress the files, but we did a 5 Whys analysis instead. Briefly, '5 Whys' is a problem solving technique that helps you identify the true root cause of issues.
- Why is the bandwidth so high? - Printer traffic taking 80% of bandwidth
- Why is printer traffic such a high percentage? - High volume of large transactions
- Why is the file size so large? - Don't know - oh yeah we use PostScript (or something)
- Why can't we use an alternative print format? - We can, let's do it, yay, it worked!
- Why do we need to ask 5 whys? - We don't, you can stop when you solve the problem
The best form of WAN optimization is to suppress or redirect the demand. We don't all have the luxury of a software engineer to modify their code and reduce bandwidth, but in this case it was the most elegant solution. We were able to combine a trial, reporting, top-N and deep analysis with a flexible team. The result was a valuable trial and a great result.
Summary
Here's a quick summary of what I covered in this post:
- The 80/20 principle can help you get real value from your efforts.
- Top-N reports are a great starting point to help you find that top 20%.
- The 5 Whys principle can help you dig deeper into your data and choose the most effective actions.
Of course a single example doesn't prove the rule. Does this principle ring true for you, or perhaps you think it is nonsense? Let me know in the comments.
FAQs
The 80-20 rule maintains that 80% of outcomes comes from 20% of causes. The 80-20 rule prioritizes the 20% of factors that will produce the best results. A principle of the 80-20 rule is to identify an entity's best assets and use them efficiently to create maximum value.
What is the 80-20 rule in optimization? ›
The 80/20 rule for social media optimization (SMO) is a simple way to get the most results from your social media efforts. This rule says that you should focus 80% of your time and resources on the things that are most important, and only 20% on the things that are less important.
What is 80-20 rule in Analytics? ›
Data practitioners spend 80% of their valuable time finding, cleaning, and organizing the data. This leaves only 20% of their time to actually perform analysis on it – which is the most enjoyable part of the role for most. This is the 80/20 rule, also known as the Pareto principle.
What is the 80-20 rule technique? ›
Simply put, the 80/20 rule states that the relationship between input and output is rarely, if ever, balanced. When applied to work, it means that approximately 20 percent of your efforts produce 80 percent of the results.
What is the 80-20 rule of spend analysis? ›
And of course, the Pareto Principle is also a great rule of thumb for understanding your company's purchasing habits and identifying and cutting procurement costs—80% of your expenditure will likely come from 20% of your purchases, or 80% of your suppliers will account for around 20% of spend.
What is the 80-20 rule real examples? ›
The 80/20 rule is not a formal mathematical equation, but more a generalized phenomenon that can be observed in economics, business, time management, and even sports. General examples of the Pareto principle: 20% of a plant contains 80% of the fruit. 80% of a company's profits come from 20% of customers.
What is the 80-20 rule in SEO? ›
Applied in designing and running a website, we can interpret the 80-20 rule to say that 20% of things on your site would give you 80% of your desired results. What this means is that you should focus on that 20% and really perfect it, instead of spreading yourself thin.
What is the 80-20 rule in technical analysis? ›
Pareto analysis states that 80% of a project's results are due to 20% of the work, or conversely, 80% of problems can be traced to 20% of the causes.
How do you visualize the 80-20 rule? ›
The Pareto chart is a visual representation of the 80-20 rule, featuring a bar + line chart. The bars represent the value of each item on your list (arranged in descending order), and the line indicates the cumulative percentage of those values.
What is the 80-20 rule in content strategy? ›
Simply, it suggests that only 20% of content should be promotional, while the other 80% should educate, inform and entertain. As you can see here, the largest motivations for using social media surround forms of entertainment, networking, and boredom.
The rule states that 80% of results come from 20% of effort – in other words, a small amount of effort can have a large impact. This principle can be applied in a number of ways to project management. For example, it can be useful for prioritizing tasks and identifying which areas of the project are most important.
What is the 80-20 rule tool? ›
The Pareto Chart is a very powerful tool for showing the relative importance of problems. It contains both bars and lines, where individual values are represented in descending order by bars, and the cumulative total of the sample is represented by the curved line.
What is the 80-20 rule success list? ›
Prioritize the vital few: Identify the top 20% of tasks that yield 80% of the results. Focus on these tasks and allocate more time and resources to them. This approach allows you to concentrate on the most critical and impactful activities that drive your success.
What is 80-20 rule in business analysis? ›
The Pareto Principle in business refers to the way 80 percent of a given business's profit typically comes from a mere 20 percent of its clientele. Business owners who subscribe to the 80/20 rule know the best way to maximize results is to focus the most marketing effort on that top 20 percent.
What is the most productive way to apply the 80-20 rule? ›
Prioritize the first 20% of your workday regarding the tasks you complete and know when it's time to pivot and make changes when working on the remaining 80% to ensure you don't waste too much productive time and energy.
What is the 80-20 rule in programming? ›
The Pareto Principle, also known as the 80/20 rule, is popular in various industries, including software development. The idea is that 20% of developers' time is spent on work that results in 80% of the value created.
What is 80-20 rule estimating? ›
The 80-20 rule is a principle that states 80% of all outcomes are derived from 20% of causes. It's used to determine the factors (typically, in a business situation) that are most responsible for success and then focus on them to improve results.
What is the 80-20 content strategy? ›
However, one strategy that is often overlooked is the 80/20 ratio. The 80/20 ratio simply means that you should focus 80% of your social media content on providing value to your audience, and only 20% on promoting your products or services.
What is 80-20 rule in problem management? ›
The 80/20 Rule
The Pareto Principle states that 80 percent of a project's benefit comes from 20 percent of the work. Or, conversely, that 80 percent of problems can be traced back to 20 percent of causes. Pareto Analysis identifies the problem areas or tasks that will have the biggest payoff.
