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Poll: Is Pareto's 80/20 rule also applicable to your business? Thread poster: ProZ.com Staff
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This forum topic is for the discussion of the poll question "Is Pareto's 80/20 rule also applicable to your business?".
This poll was originally submitted by Maciej Andrzejczak
View the poll here
A forum topic will appear each time a new poll is run. For more... See more This forum topic is for the discussion of the poll question "Is Pareto's 80/20 rule also applicable to your business?".
This poll was originally submitted by Maciej Andrzejczak
View the poll here
A forum topic will appear each time a new poll is run. For more information, see: http://proz.com/topic/33629 ▲ Collapse
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| Pareto's rule | Jun 3, 2006 |
Pareto's rule basically says that the top 20% of the inputs produce 80% of the outcomes.
For example the top 20% of your customers may account for 80% of your income. Also you may find that the top 20% of your problems account for 80% of your losses.
It is used in management to assign priorities. Usually the problems are grouped in categories and the categories ordered by decreasing frequency. The top 20% of the categories usually enclose 80% of the issues.
... See more Pareto's rule basically says that the top 20% of the inputs produce 80% of the outcomes.
For example the top 20% of your customers may account for 80% of your income. Also you may find that the top 20% of your problems account for 80% of your losses.
It is used in management to assign priorities. Usually the problems are grouped in categories and the categories ordered by decreasing frequency. The top 20% of the categories usually enclose 80% of the issues.
The exact number may differ from 80 and 20 but in general when large numbers are involved many activities show a strong correlation with Pareto's rule.
Regards,
Enrique ▲ Collapse
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| I agree with Enrique... | Jun 3, 2006 |
And here's in my own words:
I interpret Pareto's Principle in such a way as to produce what is called Superstar Management. My own understanding claims that, since 20 percent of your Clients produce 80 percent of your income, you should focus your limited time on managing only that 20 percent, the Superstars.
Pareto's Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of your work that is real... See more And here's in my own words:
I interpret Pareto's Principle in such a way as to produce what is called Superstar Management. My own understanding claims that, since 20 percent of your Clients produce 80 percent of your income, you should focus your limited time on managing only that 20 percent, the Superstars.
Pareto's Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of your work that is really important. Don't just "work smart", work smart on the right things.
That's a good Principle! And a smart Poll. Congratulations to Maciej Andrzejczak.
Hugs,
Tadzio.
[Edited at 2006-06-03 03:55] ▲ Collapse
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Jack Doughty 
United Kingdom
Local time: 14:46
Russian to English
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In memoriam | Badly worded poll | Jun 3, 2006 |
It seems to apply to who understands it. About 80% don't, therefore you will not obtain any meaningful result from it. The question should have explained what it meant.
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Özden Arıkan
Germany
Local time: 15:46
Member
English to Turkish
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| Wish I checked the forum first | Jun 3, 2006 |
Then my answer would have been "Yes"
I chose "What is it?"
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Csaba Ban
Hungary
Local time: 15:46
Member (2002)
English to Hungarian
+ ...
| A bit more even distribution | Jun 3, 2006 |
I think a ratio of 70/30 or 60/40 would be more applicable, at least in my case.
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| Was not familiar ... | Jun 3, 2006 |
Being that I was not familiar with this rule (and I had taken several economics and business classes several yrs. ago), this question was not easy to answer from my perspective.
Perhaps you could have explained it in layman's terms to get better poll results.
Best of luck...
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| Good job analyzing and explaining. Now I can understand it better! | Jun 3, 2006 |
Tadzio wrote:
And here's in my own words:
I interpret Pareto's Principle in such a way as to produce what is called Superstar Management. My own understanding claims that, since 20 percent of your Clients produce 80 percent of your income, you should focus your limited time on managing only that 20 percent, the Superstars.
Pareto's Principle, the 80/20 Rule, should serve as a daily reminder to focus 80 percent of your time and energy on the 20 percent of your work that is really important. Don't just "work smart", work smart on the right things.
That's a good Principle! And a smart Poll. Congratulations to Maciej Andrzejczak.
Hugs,
Tadzio.
[Edited at 2006-06-03 03:55]
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| Agree with Jack | Jun 3, 2006 |
Agree with Jack Doughty. And I answered "What is it?"
It seems it has something to do with Murphy's law. But how many of us would be able to answer for instance the question "Do you agree with the third Murphy's law?" without it being explained? Not many, I think, although most of us have heard it: Anything that can go wrong will go wrong.
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Lia Fail (X)
Spain
Local time: 15:46
Spanish to English
+ ...
Jack Doughty wrote:
It seems to apply to who understands it. About 80% don't, therefore you will not obtain any meaningful result from it. The question should have explained what it meant.
It's an 80/20 rule that can be interpreted in too many ways.
[Edited at 2006-06-03 10:47]
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avantix
Netherlands
Local time: 15:46
German to Dutch
+ ...
In memoriam
Hey guys, we're translators! Aren't we supposed to look up things that do not spontaneously come to our minds? The answer to 'what is it?' is only one mouseclick away.
I checked Google in several languages and found every time at least one link to an explanation of this principle within the first 10 entries!
Obviously approx. 80% did not do so. Does this mean that the Paretto principle also applies to the quality of translators? I hope it doesn't!
Have a nice day.
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Jalapeno
Local time: 15:46
English to German
avantix wrote:
Hey guys, we're translators! Aren't we supposed to look up things that do not spontaneously come to our minds? The answer to 'what is it?' is only one mouseclick away.
I checked Google in several languages and found every time at least one link to an explanation of this principle within the first 10 entries!
Obviously approx. 80% did not do so. Does this mean that the Paretto principle also applies to the quality of translators? I hope it doesn't!
Have a nice day.
Of course I could have looked it up. But I assumed that the answer "What is it?" was there for a reason, i.e. that maybe the asker wanted not only to see whether the rule applies to the translation business, but also how many people had actually heard of the rule.
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texjax DDS PhD
Local time: 09:46
Member (2006)
English to Italian
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Very interesting question...
Congratulations to Enrique for the very clear explanation ( I needed one myself). I also agree with avantix, but I suppose that the final results will be biased by the poll "design" (and for this reason not very useful in order to obtain a clear picture of the situation).
Regards,
Tex
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Yolande Haneder (X)
Local time: 15:46
German to French
+ ...
| Bad business strategy... | Jun 3, 2006 |
if 20% of your clients give you 80% of your earnings.
That's one of the things that banks are particularly looking at, especially under the new basel II ruling.
If you have such business model, you get some bad points for the company's evaluation (especially when looking for money from a bank).
Having 80% of your income from a few client makes you very dependant of your client. They can tell you do as I want or a take another outsourcer and you start to sw... See more if 20% of your clients give you 80% of your earnings.
That's one of the things that banks are particularly looking at, especially under the new basel II ruling.
If you have such business model, you get some bad points for the company's evaluation (especially when looking for money from a bank).
Having 80% of your income from a few client makes you very dependant of your client. They can tell you do as I want or a take another outsourcer and you start to sweat. ▲ Collapse
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| yes, too 'sophisticated' question | Jun 3, 2006 |
Jack Doughty wrote:
It seems to apply to who understands it. About 80% don't, therefore you will not obtain any meaningful result from it. The question should have explained what it meant.
I also belong the the 80% who didn't understand the question. So I chose "What is it?" Otherwise I'd have said yes.
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