The 80 20 / Pareto Rule (Law of the Vital Few) has always played a role in my life, ever since my days of cramming for college exams. Ironically enough I actually learnt about this Pareto Rule studying for my final year engineering exams. It was part of one of my syllabuses and it fascinated me from the outset.
The Pareto Rule was devised by an Italian economist called, funny enough, Pareto. In his garden, he grew pea pods. He was always perplexed every year that on average, 20% of his plants yielded 80% of his crop. This fascinated him and he then went on a journey to see did this logic hold as true in other areas / sectors. What he discovered was that on average 20% of the world population controlled
- 80% of the global wealth
- 80% of the global resources
- and so on…
With that he coined the term the Pareto Rule or the Law of the Vital Few.
So where am I going with this?
Well this holds very true for business too on a general level…
So for example
- 20% of your customer will provide 80% of your value
- 20% of your processes will deliver 80% of this value for your clients (this may sound low, it can go much lower!)
And on the flip side
- 20% of your issues will lead to 80% of your problems!
Imagine being able to know which 20% this is and then being able to eradicate or mitigate these issues as much as possible…What value do you think this will offer your business?
Enter Pareto Problem Solving