Image for  "Become more focused and efficient with the help of Vilfredo Pareto"

Become more focused and efficient with the help of Vilfredo Pareto

Focus increases your efficiency

To increase efficiency, you need to increase your focus. You can’t be effective if you are one here, and one there, in both thought and action. It is neither chopped nor ground. You become completely disjointed and it can feel like you haven’t accomplished anything useful in a day. I think you recognize yourself, don’t you?

But what to focus on then? There is so much that needs to be done and that you need to be involved in. This is usually the case whether or not you are a manager in the business. And sometimes it feels like no matter how you prioritise, things go wrong.

Pareto gives us guidance

Vilfredo Pareto, an Italian scientist and philosopher, concluded in the early 20th century that there is a relationship between the distribution of wealth. It turned out that 80% of the wealth was owned by 20% of the population.

After that, Vilfredo Pareto went on to show that this relationship applies to so much more than just the possession of wealth. It became a general rule of how things are distributed in the world, which many see as a form of natural law. This rule is called the Pareto rule or the 80/20 principle.

The general 80/20 principle may vary slightly. The split can be either 70/30 or 90/10, or something in between. But the important thing we can learn from the Pareto rule is that the bulk of work, money, frustration, and so on, goes into managing a smaller proportion of the total amount we work with in an operation. And that applies to all businesses and also to ourselves as individuals.

  • 20% of all cases handled by customer services take up 80% of the time they spend.
  • 20% of all artists are played 80% of the time, which also means that these 20% also earn 80% of all the money.
  • 20% of the users account for 80% of the intervention needs.
  • 20% of pupils account for 80% of extra support needs.
  • 20% of the IT support we have accounts for 80% of all the work required.
  • 20% of suppliers account for 80% of all invoices and also 80% of the cost.
  • 20% of all “problems” we have in the business take up 80% of our discussions at the management group meeting or APT.
  • And so on…

What 80/20 ratio applies to your personal life? What accounts for the bulk of your headache?

And what 80/20 ratio do you see in your business? Where could you focus to increase both service levels and efficiency.

80/20 principle within the 80/20 distribution

The tricky thing about the principle is that it can be applied further to a subset, i.e. to the 20% that we have already identified. If 20% of all cases take up 80% of the time we spend, then 20% of the first 20% of cases account for 80% of the time within the first 80%. Are you with me? Let me clarify.

Let’s say we have 100 cases in a week that we work on for 100 hours, which is one hour per case on average. Of these 100 cases, 20 cases require us to work 80 hours on them. The vast majority of cases, 80, take only 20 hours.

Of the 20 most demanding cases, a further 20%, i.e. four cases, account for 80% of the 80 hours it takes to work on the more demanding cases. That’s 64 hours.

So we work 64 hours on four of the 100 cases. Imagine if you were able to identify the first 20% in advance and then the next 20%. It’s like zooming in one level. Then you can know immediately when such a case comes in.

This instead of discovering after many hours of work that this particular case is of the more demanding type.

What would it do for your efficiency and ability to plan?

Focus on what is most important

If you can identify which problems or tasks account for the bulk of your work and thinking, you can choose to focus on these in a structured way. Then you can increase both efficiency and quality “just” by focusing on solving these problems or tasks.

If you can address these issues, you will have made a huge contribution to the business. This is in contrast to taking up a lot of time focusing on things that have little effect.

It applies to you, as well as your processes

Keeping yourself focused as a person is important to be effective and to feel that you have done a good job at the end of the day. However, it is equally important in your processes. When working to improve them, focus on improving the things that make the biggest impact.

And according to the Pareto rule, 20% of all cases account for 80% of the process time. If you can identify them and then focus on them and find improvements, you can reduce workload and increase service levels.

And since these account for the bulk of your time, that’s where you’ll find the big potential.

Quality improvement comes with the deal

Now it may sound like it’s only time that we can improve and thus become more efficient. But the fact is that if you can identify, for example, the 20% of customers who account for 80% of demand or business, you will be able to add value to them.

These are the most important customers you have. If they are satisfied, it will bring a lot to the business.

Your most important customers (whatever you want to call them) get a better service, which gives you better results, which gives your staff positive feedback, which is good for the whole business.

So the summary for the week is that you need to choose what you focus on to get the most out of your work effort. You do this by using the Pareto rule and analysing your own and your business’ situation. It will make you choose to focus your time on what gives the greatest impact!

I hope you have a nice summer, and I’ll talk to you in a week.