Continuous Improvement and the 80:20 Rule
How does the 80:20 Rule apply to Continuous
Improvement
The 80:20 rule, also known as Pareto’s Principle, states that
80% of an observable effect is caused by 20% of the variables at
play. The first recognition of this rule was by Vilfredo Pareto
who, in 1906, recognised that 80% of Italy’s wealth was owned by
20% of Italy’s population.
The same 80:20 split can be seen in many places; management,
economics, software/interface design, quality control systems and
many more places. Whilst the rule is called the 80:20 Rule – the
actual percentages are not all that important: 90:10, 70:30, 80:20
are all valid variations. Indeed – it is perfectly valid to say
70:10 as there is no requirement that the two sides add up to 100 –
the important thing is the principle that a large number of outputs
are determined by a relatively small number of inputs.
So I find myself constantly addressing the age old problem that,
given the knowledge of the Tools & Techniques for Continuous
Improvement of our Organisation, why is change not taking place as
we would expect. I have to answer that the 80:20 Rule is in
operation. Tools & Techniques account for 20% of our required
improvement; indeed without them there would be no improvement. The
most significant part of our observable effect is caused by the
Culture of our Organisation; if we do not have the right mindset
then we can learn all there is to know about the Tools &
Techniques of Continuous Improvement but nothing, in effect,
will change.
Jargon Buster:
Poka-Yoke A mistake-proofing device or procedure to prevent a
defect during operation. May sometimes be called a baka-yok.
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