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80/20 Rule July 25, 2007

Posted by Tariq Ahmed in Project Management.

As the rebels found out, a Death Star doesn’t need to be 100% complete, to have basic functionality.  Large projects can become bogged down due to their sheer size, or scope creep can rear its ugly head and cripple a project’s time-line.  In order to combat these issues, the 80/20 rule can be very useful.

History:  The Pareto principle, AKA the 80-20 rule states that 80% of the effects come form 20% of the causes.  It was originally conceived when an Italian economist noted that 80% of income went to 20% of the population.

This can be applied to almost anything.  80% of your sales come from 20% of your clients.  80% of your results come from 20% of your employees.  It can also work the other way, where 20% of your effort, produces 80% of your results.  For example, if you spend 10 hours writing a college paper, 2 critical hours of time produce 80% of the results.  The remaining 8 hours is spent on the last 20% of your paper.

In project management this rule can be applied in various ways.  Spend 20% of your time to build software that has 80% of the features you want.  Attempting to squeeze in the last 20% will take an additional 80% of your time.

When planning any project, consider what are the core results that you want, the most important 80% and leave the nice-to-haves or remaining 20% out.  This will enable faster project completion times and also make sure resources are being spent as efficiently as possible.

This also begs other questions:  If 20% of your people are producing 80% of your results, what are the other 80% of your employees doing?  If 20% of your day produces 80% of your results, how can you maximize your efforts so you don’t waste 80% of your time going after the 20%?




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