October 11, 2018

Here’s a trivia question: Name the management consultant, credited with launching the Pareto Principle, who lived to be more than 100 years of age? Answer: Joseph M. Juran.

Second question: What’s the Pareto Principle? Third question: What makes the Pareto Principle important to employers, managers, and supervisors?

Decades ago, Juran traveled to Japan where he began helping Japanese industry implement “total quality.” He authored 12 books, including the best-selling “Quality Control Handbook,” and along with Edwards Deming, is recognized as a significant force behind the total quality movement.

## The Pareto Principle

An Italian economist, Vilfredo Pareto, early in the 1900s created a mathematical formula to describe the unequal distribution of wealth in Italy. Basically, 20% of the people owned 80% of the wealth. Already in the 1930s, Juran was discussing a principle he called the “vital few and trivial many.” In the late 1940s, Juran extended the 80/20 rule (80% trivial and 20% vital) to the business world and called it the Pareto Law or Pareto Principle.

This rule or law — that 20% of something is always responsible for 80% of the results — could more accurately be called the Juran Rule.

## The Rule in the Workplace

So, how does this 80/20 rule apply in the workplace, and how might workplace leaders use it to improve effectiveness and results?

For a start, the 80/20 rule says that about 80% of what you and your employees and associates do is less important than the nearly 20% of what you do that is most important.

So what’s actually happening in most workplaces? Executives, managers, supervisors and employees spend roughly 80% of their time on the 80% trivial or least important activities, and roughly 20% of their time on the vital, most important activities. But a believer in the Juran Rule says: Spend 80% or more of your time on the 20% of activities that are vital and important, and spend 20% or less time on the trivial and least important.

What to do: To take advantage of the 80/20 rule and apply it in your workplace, discuss the following examples of the Juran Rule with your associates and employees and seek ways to apply solutions in everyone’s work:

1. 20% of your stock and supplies take up 80% of your warehouse and storage space.
• Is it the right, most profitable inventory
2. 20% of your employees will cause 80% of your employee-related headaches.
• How can we reduce this to 5% or less?
3. 80% of your support staff’s time is spent on tasks that produce 20% of your firm’s profits.
• How can we cut this percentage in half?
4. 80% of a person’s time at work is spent on trivial, low value, and no value tasks.
• How can we cut this percentage in half?
5. Try this one: 80% of employees spend 20% of their time at work surfing the Internet for personal reasons.
• If this is true in our workplace, how can we reduce that wasted time to something like 20% of employees waste 5% of their time at work clicking around on the Internet for personal reasons?
6. 20% of employees will submit 80% of the ideas in an actively promoted suggestion program.
• How can we increase that to 40% of employees submitting 90% of the ideas?
7. 80% of your interruptions at work come from the same 20% of the people in your workplace. And 80% of these interruptions are trivial and a waste of your time.
• How can we cut the number of trivial interruptions by 80%?
8. 20% of your employees and associates are stars and potential stars while 80% of your people are never going to be stars.
• What are we doing right that attracts the 20% who are stars and potential stars? And how can we do more of that, and increase the star and potential star employees to 40% of our workforce?

© 2018