Applying the Pareto Principle

So it’s 1906 and an Italian economist named Vilfredo Pareto, (I would love to have a name that had a ring like that to it) observed that 80% of the land and wealth in Italy was owned by 20% of the population. He also observed that 20% of the pea pods in his garden contained 80% of the peas. Thanks to Juran, who is considered to be the ‘father’ of quality, the Pareto principle is a common rule of thumb that is often applied in business; e.g., "80% of your sales come from 20% of your clients." There is nothing special about the number 80% mathematically, but many real systems tend to have a region of intermediate imbalance in distribution.1 However, that study was done in a different country over 100 years ago and in our modern and ‘flat’ economy those principles would not apply right?.... Actually, they do.

The following are some observations of the Pareto Principle that I have made in my business and personal life.
Business: 80% of my emails come from 20% of the same people. The same goes for the % of my email storage quota.
Personal: I wear 20% of my wardrobe 80% of the time. E.g. On at least one day of the week I will wear my favorite shoes, pants and shirt in no particular combination.
Business: 20% of our Lean Six Sigma projects result in 80% of our savings. I wish I knew which projects fell into that 20% ahead of time....
Personal: 80% of my meals at home are made from 20% of recipes I know. E.g. Pasta with meat sauce, Salmon with squash and zucchini, Breakfast sandwiches, etc…
Business: 80% of my work stress comes from 20% of my tasks / initiatives
Personal: When I go out to lunch I will eat at 20% of the restaurants I have visited 80% of the time. I know I’m not the only one because I see the same faces at Oakwood and Chick Fil A almost every time I go. 80% of the time, I will order from the 20% of the menu. Health Hint: At Oakwood I typically get Smoked Chicken with green beans and a sweet Potato (No butter). This meal contains a super dose of lean protein, vitamins and fiber.
Business: 80% of IS initiatives are kaizen events (1 to 2 weeks of consolidated meetings), 20% are standard Lean Six Sigma Projects (meetings are usually spread out over a 3 month period).
Conclusion:
There’s a saying that they use at IBM that implies the utilization of the Pareto principle “It’s not only important to do things right, but also to ensure you’re doing the right things”.
Shaw’s core values are Honestly, Integrity and Hard Work, but “working harder” and “working smarter” are not as effective as work smart on the right things.2
- Daniel Lucas
Ref 1: http://en.wikipedia.org/wiki/Pareto_principle
Ref 2: http://www.pinnicle.com/Articles/Pareto_Principle/pareto_principle.html