In my quest for maximum efficiency and ultimate productivity,
I came across Pareto Law in a seminar I attended a year ago, and from a very interesting
book, that I still use as a reference, when refering to productivity, outsourcing and
management.
So what is Pareto’s law or Pareto’s principle?
The Pareto principle (also known as the 80-20 rule, or the law of the vital few,
and the principle of factor sparsity) states that, for many events, roughly 80%
of the effects come from 20% of the causes.
The mathematical formula he used to demonstrate a grossly uneven but predictable
distribution, of wealth in society — 80% of the wealth and income was produced and
possessed by 20% of the population – also applied outside of economics.
Indeed it could be found almost everywhere.
Other ways this law could be rephrased:
- 80% of the consequences flow from 20% of the causes
- 80% of the results come from 20% of the effort and time
- 80% of company profits come from 20% of the products and customers
- 80% of all stock market gains are relaized by 20% of the investors and 20% of an individual portfolio.
I started evaluating myself and the way I function, to find and to identify the hightest
leverages in my life and in business, and the best way to organize my highest priorities,
and to achieve the highest ROIs.
e Pareto principle (also known as the 80-20 rule,
or the law of the vital few, and the principle of factor sparsity) states that,
for many events, roughly 80% of the effects come from 20% of the causes.
The mathematical formula he used to demonstrate a grossly uneven but predictable distribution,
of wealth in society — 80% of the wealth and income was produced and possessed by 20% of the
population – also applied outside of economics. Indeed it could be found almost everywhere.
OTher ways this law could be phrased:
80% of the consequences flow from 20% of the causes
80% of the results come from 20% of the effort and time
80% of company profits come from 20% of the products and customers
80% of all stock market gains are relaized by 20% of the investors and 20%
of an individual portfolio.
I came across Pareto Law in a seminar I attended a year ago, and from a very interesting
book, that I use as a reference and I am quoting many phrases from it the four hour work
week.
And I started evaluating myself and the way I function, to find and to identify my hightest
leverage..
And in the book the four hour work week ther are 2 questions, that I think everyone,
should ask themselves:
1) Which 20% of sources are causing 80% of my problems and unhappiness?
2) Which 20% of sources are causing 80% of my desired outcomes are happiness?
I beleive those are good questions, and will help identify yourself better, and
I think will help you set the priorities straight, which I think will be more
rewarding in the long run.
In the book the four hour work week there are 2 questions, that I think everyone,
should ask themselves:
1) Which 20% of sources are causing 80% of my problems and unhappiness?
2) Which 20% of sources are causing 80% of my desired outcomes and happiness?
Answering those 2 questions helped me identify myself better, and
made me realize how to set my priorities straight, which I think will be more
rewarding in the long run.
And by the way there is nothing special about the number 80% mathematically,
and the ratio is often skewed even more severly:
It could be 90/10, 95/5 and 99/1 are very possible.
I beleive tracking and keeping record, of everything you do is a key piece.
While this principle can be applied in all aspects of business, life in general,
now I would like to talk about its application in software/web development.
Probably a small percentage of your source code, produces or handles the majority,
of the business benefits for your users. This core source code, has been well
written, defined, tested and optimized, and responsible for most of your core
business requirements.
Once in production, this code hardly ever changed, and when changed goes
through rigorous testing, and always well optimized. The rest of your source code,
is responsible for the rest of the fancy stuff, those cool popups, or that sleek
navigation system.
But this code, from a business perspective, does a little or nothing at all to your
business requirements, costs most of the money, and hard to maintain, and most
likely to produce the majority of your bugs.
Now I agree with you, we need to make our stuff look pretty, and also provide,
users with better software experience, and I am all for usability.
But from project management prespective and in applying Pareto’s law,
I think we should identify the 20% and expand it, and at the same time,
realize the other 80% and try to reduce it.
Here is another example, that I experienced myself, about 3 years ago, in one
of the projects that I was working on in my previous job. During the final phase,
we agreed on reporting module, and the client requested about 50 crystal reports,
to report on different data in of their system.
After reviewing their data model, and multiple meetings, discussing their business process,
we we’re able to drop the number of reports to 15…
Actually they agreed after many discussions, that those 15, were the most commonly,
used reports, and probably the rest, will be hardly used or reviewed.
The example above proves, that there are always areas, of improvement, and
many ways to increase efficiency.
Another example can be in search engine optimization. If you do your analysis, most of the
time, 20% of your keywords, is responsible of producing 80% of the traffic.
Again, the goal here, is to expand on those 20%.
20% of your website pages, are the most visited ones, and key for efficiency, is to put
the best content, or to list the most products possible on those pages.
And finally I would like to finish with the following paragraphs from the four hour work week,
they were very useful to me, and I am sure that they will sum up the whole idea for you.
Slow down and remember this: Most things make no difference. Being busy is a form
of laziness—lazy thinking and indiscriminate action.
Being overwhelmed is often as unproductive as doing nothing, and is far more unpleasant.
Being selective—doing less—is the path of the productive.
Focus on the important few and ignore the rest. Of course, before you can separate the
wheat from the chaff and eliminate activities in a new environment (whether a new job or an
entrepreneurial venture), you will need to try a lot to identify what pulls the most weight.
Throw it all up on the wall and see what sticks. That’s part of the process, but it should not
take more than a month or two.
It’s easy to get caught in a flood of minutiae, and the key to not feeling rushed is remembering
that lack of time is actually lack of priorities. Take time to stop and smell the roses,
or—in this case— to count the pea pods.
and more!
.