Book: 80/20 Principle: The Secret of achieving more with less
Subject Area: Productivity & Effectiveness
Post number: 7
English version:

The top 10 business application of the Pareto Law.

Decision Making and analysis

Business requires decisions. Fast and frequent. Analysis in the current corporate world. Large organisations currently have too much analysis, but still lack strategic data access. Only a few vital data requires analysis. Gather 80% of the data (Which can be usually done in 20% of the time) and perform 80% of relevant analysis, and make a decision 100% and act on it confidently 100% of the time!

Inventory Management

Cut down radically on the 80% of not too profitable stock build up!

Project Management

Management structures usually destroy more value than they add! Simplify the task. A project usually involves a large number of small tasks/projects. Impose an impossible time scale. This will make sure the team focuses on the high value tasks! Plan before you act! A large proportion of time should be allocated to detailed planning and thinking. Design before you implement!

Negotiation

Few points in negotiation really matter! Dont peak too early!

The rest include Strategy, Quality, Cost reduction and service improvement, Marketing, Selling and Information Technology.

The Vital few provide the MOST success.

A few things are always much more important than the rest!
Progress means moving resources from low value to high value cases! Spend your time on the high value area. Time, after all is the most valuable resource for a person!

A few people add most of the value. Margins vary wildly! Resources are always misallocated to the low value stuff! Success is underrated and under recognized. Usually it is classified as luck. It is just feedback loops we have not identified yet! Equilibrium is illusionary! Nothing lasts forever! The Biggest wins start small!

STOP THINKING 50/50. Things do not have equal input and output!

In the next post, we will look at how we can apply this principle in our personal life.