How the Pareto Principle Can Help You Manage Projects More Effectively

How the Pareto Principle Can Help You Manage Projects More Effectively

By Michelle Symonds

Work less but do more is what the Pareto Principle is all about. Also known as the ‘law of the vital few’ it says that in most situations roughly 80 percent of effects come from only 20 percent of the causes. It’s been applied to almost every human endeavour, from software development to financial investments. We can also use the Pareto Principle to better manage projects and focus on the things on our task list that really make a difference.

Looking at our own productivity on a project through the lens of the 80/20 rule we can cut out four-fifths of our tasks that are unimportant or don’t contribute enough to the project end goals. You can use the 80/20 rule to cut out or delegate categories of tasks or focus on individual ‘to do’s.’

Write down your priorities

Using the Pareto Principle try writing down your top six priority tasks, then cross out the bottom five and start work on the top one. Every time you’re distracted and want to start another task write down what you are about to do. This stops you in your tracks!

If you have trouble prioritising project management tasks, here’s another strategy you could use. When you make your ‘to do’ list, place each item by the amount of effort required, listing them 1 to 10 – with 1 requiring the least amount of effort – and then the potential positive results, again 1 to 10, with 10 having the highest impact. Now divide the potential results by the amount of effort to get a priority ranking. First do the items with the lowest resulting priority number.

Some examples

Here’s a simple example:

  • Task 1: Write report on planning meeting. Effort=10, Result=2, Priority=5
  • Task 2: Prepare presentation for marketing. Effort=4, Result=4, Priority=1
  • Task 3: Call current customer about referral. Effort=1, Result=10, Priority=0.1

Can you see your new priority-based order? You first do Task 3, Task 2 second, and Task 1 last – if at all! This way, you ensure you do those important low-effort tasks that make up 80 per cent of your success.

Business-management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who in 1906 noted that 80 percent of the land in Italy was owned by 20 percent of the population. Pareto developed the principle by realising that a fifth of the pea pods in his garden contained fourth-fifths of the peas!

Pareto – the rule of thumb in business

Today, Pareto is a common rule of thumb in business. Eighty percent of sales come from 20 percent of regular customers. Mathematically, where something is shared among a sufficiently large set of participants, there must be a number k between 50 and 100 such that k percent is taken by (100 – k) percent of the participants. The number k may vary of course from 50 (in the case of equal distribution, that is, 100 percent of the population have equal shares) to nearly 100 (when a tiny number of participants account for almost all of the resource).

When managing projects, remember to focus 80% of your time and energy on the 20% of activities which are the most important for the successful outcome of the project. And if you are not sure which are the top priority tasks then use the simple analysis technique described above to determine the priority of each outstanding task. Such analysis is a very effective project management training tool.

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