All Decisions Are Not Created Equal: Use of Pareto Thinking

Written by: David McClaskey, President, Pal's Business Excellence Institute

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It is been said that a person’s quality of life today is a result of decisions s/he has made and actions  taken as a result of those decisions. We make many decisions every day. But the impact of those decisions on our life is not equal. There are some decisions, usually a very few set of decisions, that had a very high impact result on our lives. I know this is true for me personally. Early in my career what I decided to major in college (Industrial Engineering) and where I would take my first job (Eastman Chemical Company) had a profound influence on the extraordinary quality of which I find my life today.

The result of those two decisions led me into the field of quality management or performance excellence in which I have enjoyed working in my entire career. This path is a great example of a fundamental quality concept, the Pareto principle. Dr. Joseph Juran stated the Pareto principle as the “vital few” and the “useful many.” This is often referred to as the “80/20 principle”: where 80% of the impact comes from 20% of the items.

Juran never intended for the 20% and 80% to be precise numbers. They were more of a reflection that in most systems the vital few set of items caused most of the impact. The exact percentage can vary. As I consider the application of the Pareto principle to the decisions one makes in their lives, the concept of the “vital few” and “useful many” is certainly correct. But I don’t think it’s 20% of the decisions that have 80% of the impact. I believe it’s more like 1%- 3% of the decisions have 90% of the impact. We could certainly argue about exactly what the right percentage is. There are no data that I know of that would actually answer this, so let’s develop some. Reflect on your own personal life and answer these two questions:

  • What were the key decisions that had extremely significant impact on my life?
  • What percent of the total decisions you have made in your life are those extremely significant impact decisions?

ACTION: Respond by liking this blog and commenting with the % of your total decisions that had an extremely significant impact on your life. That way we will have some data and practice using the Pareto principle. Share this with your friends so we can get their insight as well.

Want to get even more out of this exercise? You could also use this time of reflection to determine how good you did at the decisions that turned out to be so very impactful and why the decision process worked so well. As you are reflecting, you might also consider whether at the time you made the decision, were you aware that this might be a very significant decision. It appears to me that in some cases we knew we were making a decision that would very likely have a significant impact on our lives. In other cases, we only realize that in retrospect. There may be a third case where decisions were very significant but we still have never realized their very significant impact.  Want any “redo’s”?

Related McClaskey Blog: The World’s Greatest Planning Tool:  The Pareto Principle

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