October 14, 2018
The 80/20 rule is also known as the Pareto Principle and the law of a vital few. The rule states that for many events, 80% of the effects come from 20% of the causes. The rule has been applied in many areas of life. It is also very applicable in project management, where it can help project managers become more effective and productive in 6 different areas: Stakeholder management, Project timelines, Resource management, Team meetings, Project data and Risk management.
Before diving into how the 80/20 rule can be applied in project management, let’s take a look at what the 80/20 rule actually is.
What is the 80/20 rule?
The 80/20 rule is also known as the Pareto Principle or the law of a vital few. It was named the Pareto Principle after the Italian economist Vilfredo Pareto.
Back in 1895 he noticed that people in society seemed to divide into what he called the “vital few” and the “trivial many” based on wealth. The vital few was the top 20% in terms of money and influence, and the “trivial many” was the bottom 80%.
Vilfredo Parento discovered that all economic activity was subject to the Pareto Principle, as 80% of the wealth in Italy was controlled by 20% of the population.
This rule was not only a case of the population in Italy. In 1989 the United Nations found that the richest 20% of the world’s population controlled 82,7% of the world’s income.
Today we can apply the 80/20 rule to almost every situation in life. Just think about it. Do you find an equal distribution of anything in value?
Understanding this rule is vital to learning how to prioritize your tasks and become more productive.
What is the 80/20 rule in project management?
In project management the 80/20 rule asserts that by focusing on the 20% of work that matters most to your clients, will produce 80% of the project results. Therefore, many of the most important results in your projects will come based on a minority of work that you and your team complete.
With any project different individuals, partners, sponsors or clients can have an influence over the project. Stakeholder buy-in and support is the glue that binds a project’s elements together. This can make or break a project.
Usually the more complicated a project becomes by having various stakeholders, the more it is likely to fail. Less influencers and bureaucracy on the other hand typically increases the likelihood of success.
Limit the stakeholders to only include those that are absolutely necessary to the project. Taking into account the Pareto Principle, only 20% of the involved stakeholders will be necessary for project completion. Likewise, should 80% of your efforts be focused on these stakeholders.
So which stakeholders should be included?
To select the necessary stakeholders, break down the roles of the people who are involved in the project, assess the impact of each stakeholder, and involve the few that are vital to the project – that is whose support will help you complete the project and lack of support could make the project fail.
As a project manager, you are probably always looking for the most efficient way to complete the projects that are important for your business.
Several options are available to fulfill the need to keep an overview of projects, their timelines and due dates. Gantt charts, flowcharts, dashboards and other planning tools can help you create and manage project timelines.
Use the project timeline tools to determine what tasks are critical to your project success. Focus all your efforts on these critical tasks as finishing them will be sufficient for project completion.
Using the 80/20 rule you should focus on core tasks that are essential to reach project success. Working on the essential 20% of tasks that produce 80% of the results will keep you on the right path to project completion within time and avoid wasting time on less important tasks.
Keep the amount of resources to the “vital few” as Vilfredo Parento expressed it.
Instead of having a big team working on a project it often makes sense to limit the team to the most important people. Having a few people working on your project who do great work and have great ideas rather than adding barriers will be far more valuable to you as a project manager.
Too many cooks can definitely spoil the soup, so focus on limiting your project team to the 20% who produce 80% of the results. Use a software that can track what each individual of the team is producing to find the right team members for your projects.
However, remember not to overload your “vital few” with work. As the rest of us, they don’t have an endless number of hours in the day and don’t have endless energy.
You have probably experienced ineffective meetings, right?
In regards to meetings quality is key, not quantity. Evaluate all the meetings you have had to date and decide to cut out all the unimportant fluff from now on.
Use a meeting software, make a meeting agenda and stick to it! A 20-minute uninterrupted quality conversion with team members based on a clear agenda is far more productive than a 80-minute long conversation with no agenda and constant interruptions.
Maintaining focus and avoid getting side-tracked is key to making the best use of the 20% that will yield to the best results.
In todays digitalized society who hasn’t heard about data and how more data is always better?
This may not always be true as effective project management only requires 20% of the available data. Just think about it in the form of project management tools. How many functions of Excel do you actually use?
Excluding 80% of the available data does not mean that important data is missing and having 20% of all possible functions does not mean that important functions are missing. It simply means that there is no excess waste in your project management data and tools.
You can create a leaner project process with less room for confusion by evaluating what data and tools are actually necessary for completing your projects, and focusing on the few important things.
RISK MANAGEMENT – ERRORS AND ISSUES
Risks, issues and errors are a part of every project, whether we like it or not.
When doing risk management and problem solving, chances are that 80% of your problems will be coming from 20% key issues. This could be a bad line of code, a problematic client or inferior quality materials in a product.
Of course, we should solve these key problems and streamline our projects.
Start with identifying your problems, their sources and prioritizing them by importance. Then spend your time working on the causes that have the biggest effect on your projects.
The causes you are going to solve could be a quick fix – at least we can hope for that. But keep in mind they might require a much more time and effort to solve. It can seem tedious to spend a lot of time resolving one cause, but remember it could be causing the bulk of your problems. Therefore, they do need your attention.
By now we know how the Pareto Principle can be applied to different aspects of project management. But here are a few more examples for you to keep in mind when managing your projects:
- 80% of all projects are accounted by 20% of the clients (client management)
- 80% of the time spent on a project is caused by 20% of the features (time management)
- 80% of the work is done by 20% of the project team (team management)
- 80% of the budget is spent on 20% of the functionality (budgeting)
- 80% of the conflicts are caused by 20% of the team members (conflict management)
You can probably find other examples that applies specifically to your case, but keeping the before-mentioned examples in mind can help you get started on applying the 80/20 rule and becoming more productive.
Now you can use the 80/20 rule of successful project management
It is imperative for project managers to account for the 80/20 rule in project management and the connected risk management plan.
Failure to properly recognize this may result in a project that is over budget or behind schedule.
By accounting for the 80/20 rule in all areas of project management, projects can be organized, planned, streamlined and completed most efficiently within time and budget.
Make use of the rule so you focus on the 20% that actually matter. This means only involving the influential stakeholders in each project, keeping work to the important tasks and having the best team members work on the tasks.