Pareto law is a priority management tool. It stipulates that, in many areas, 80% of the effects come from 20% of the causes. Concretely, this means that most of the results you get are the fruit of a small number of causes or elements. This principle therefore makes it possible to optimize its productivity or the effectiveness of a system by targeting its efforts on the key elements.
Where does Pareto law come from?
This law was stated by the economist Vilfredo Pareto In 1906 when he observed that in Italy, 20 % of the population had 8 0 % of wealth. Since then, Pareto’s law has been applied to many areas, including business, time management and productivity.
For example, Pareto’s law can be used to identify 20% of customers who provide 80% of profits or to find 20% of the tasks that take the most time and which could be automated or delegated. Using this law for time managementit is possible to target efforts on the elements that have the greatest impact and maximize the results.
This law is not an absolute rule, you must remain flexible and adapt it to the circumstances and your objectives. You must especially not use it exclusively when you make a decision. But, in many cases, you will see that it is a good indicator to check trends or validate models.
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On a personal level or in your professional projects, you can use it as a management tool to identify your priorities and allocate the corresponding resources to them.
5 steps to use Pareto law
Here is a 5 -point method to apply Pareto law to a project:
- Determines the main objectives of the project and the associated tasks. This will allow you to determine what you need to target by performing your Pareto analysis.
- Collection of data on accomplished tasks and produced results. It includes the time spent on each task, the number of tasks accomplished or the level of difficulty of each of them.
- Analysis of data to determine the 20 % tasks that seem to you to bring 80 % of the results. The best is to use a graphic in columns to view the data.
- Look for solutions and puts in place measures to improve the efficiency of the 20 % of tasks that provide the most results. This can go through the automation, delegation or simplification of certain tasks.
- Make a daily follow -up, weekly or monthly (it depends on the project!) On the impact of these measures on the success of the project and adjust them accordingly.
The limits of the Pareto principle
Pareto’s law does not apply to all areas strictly, far from it! In some cases, the distribution of results may be different, for example 60/40. It can thus lead to an overestimation of the importance of certain tasks and to the negligence of certain key elements.
It does not take into account either the complexity or the importance of the different activities. For example, certain actions can be sterile in terms of results, but nevertheless be essential for the smooth running of the project as a whole.
Do you want an example? The project management which aims to plan, coordinate and follow the progress of a project does not produce tangible results, but remains crucial to ensure that the project is successful.
