The Pareto Principle

Ccommonly referred to as the 80/20 rule,  the Pareto Principle states that 80% of any result will be accomplished with 20% of the effort.

Popular culture has simplified this into what is commonly known as the “80:20 Law” which proposes that 80% of the time expended on a task produces 20% of the results, and 20% of the time expended produces 80% of the results. 20% of a study population accounts for 80 percent of the measure under consideration.

Most job seekers are following the wrong part of the Pareto Principle – 80% of their time is spent on  lower-impact activities — “web surfing” and responding to job board opportunities, posting their resume on line and connecting with executive search professionals; and only 20% of their time on high impact activities — networking and reaching out directly to leads and potential employers.

You will be more effective at getting results if you – the Job Seeker -  will use the 80/20 rule to your advantage:  to spend 80% (or more) of their time on the high-impact, “human interaction” oriented activities, including:

• Talking to and meeting with their network contacts
• Attending and participating in networking functions
• Aggressively utilizing social media applications for network communication purposes (LinkedIn, Facebook and Twitter, among others)
• Identifying target companies and aggressively contacting those companies directly or through a referral from their network
• Scheduling daily phone calls, daily meetings and getting out and “shaking hands”

Are you achieving the level of results you desire in your job search campaign?

If you are not seeing results then you are either: NOT spending sufficient time and/or are NOT focusing the time required for the highest impact. The job search process simply CANNOT be “Short-Cut” in the current market environment — neither short-cut in terms of time spent nor short-cut in terms of focus on the right things (and usually the “tougher” and more “involved” things).

Time Commitment. An effective job search campaign should be considered “a full time job.”  If you are currently unemployed, then the 40 hours or so you’d normally spend working should be devoted to your job search.  At a minimum, you should follow an “80/20″ approach to your time commitment — with 80% of your available time during the week devoted directly to your job search, and 20% focused on other important activities — personal time, community activities, training, education, professional development, etc.  Rest assured that your top competition in the job market is taking this approach — without question.

Source:  Andy Robinson; Exectuive Coach, Career Transition Coach
http://twitter.com/AndyInNaples

More on Pareto:

The Pareto Principle, commonly referred to as the 80/20 rule, states that 80% of any result will be accomplished with 20% of the effort.

Another perspective of the Principle – base an observation on the idea that 20% of a population under study, for example, will account for 80% of the population being measured. This universal rule is an effective management tool that produces valuable information in simple terms.

The Principle is named after the 19th century Italian economist Vilfredo Pareto (1848-1923) who found that the significant items in a given group normally constitute a relatively small portion of the total items in the group. Pareto observed an unequal distribution of wealth and power in a relatively small number of the total population.

Popular culture has simplified this into what is commonly known as the “80:20 Law” which proposes that 80% of the time expended on a task produces 20% of the results, and 20% of the time expended produces 80% of the results. 20% of a study population accounts for 80 percent of the measure under consideration.

Examples:

20% of customers provide 80% of cash flow, while the other 80% provide 20%. 20% of product lines yield 80% of sales, while 80% of product lines produce 20% of sales. 20% of your employees give you 80% of your results. 80% of complaints comes from 20% of product while the other 20% come from 80%.
Managers and logisticians alike recognize the Pareto Principle as a viable technique to identify problems, prioritize issues, and help optimize systems. The Pareto Principle is a tool that can effectively communicate the bottom line at any level, and it has application from the micro to the macro level.

The Pareto principle does, however, have its limits. Concentrating on the 20 percent that are the “vital few” today will allow decisions to be made today. As logisticians know, the automated environment of the logistics world requires intense daily management. A caveat to logisticians: The Pareto principle does not have a “magic” breakpoint at the 80-20 line but is simply a rule of thumb. Additionally, all 80 percent of the “trivial many” should not be disregarded. When taking action based on the Pareto principle, it should be remembered that some of today’s “trivial many” may be part of tomorrow’s “vital few.”

Add the Pareto principle to your box of management metric tools and become accustomed to thinking with the whole system in mind, across functional boundaries, and not just in the separate discipline or field. The Pareto analysis is a communication tool that can emphasize disparity, provoke a decision, and trigger action. Most importantly, the Pareto principle can help mold logistics processes into flexible and efficient systems ready to support the 21st century work force.

Steps to take to analyze a situation using the Pareto Principle:
Determine the objective that needs to be attacked (e.g., market share, profit, revenue, quality, and time). Determine measures of this objective. Determine items that influence this objective and their corresponding measures. Rank the items in descending order based on their contribution to the measure. Identify ways to influence the activities that account for roughly 80% of the measure.

Pareto Charts:
The Pareto chart combines a bar graph with a cumulative line graph. The bars are placed from left to right in descending order. The cumulative line graph shows the percent contribution of all preceding bars. The Pareto chart shows where effort can be focused for maximum benefit. It may take two or more Pareto charts to focus the problem to a level that can be successfully analyzed. A common error is to stop at too high a level. Process:

Identify the contributors to the problem: steps, machines, materials, costs. Sort the data in descending order (largest to smallest). Combine small quantities into other. Draw the bar graph. Draw a cumulative line graph on top of the bar graph showing the cumulative percent contribution. Evaluate the pareto pattern: Is the left-most bar significantly higher than the rest or is the pattern a “pareto?” If there is a pareto pattern, shade the bar to make it more clear.