What Is the 80/20 Rule? Fun with Grandchildren
Distribution – 80/20 rule
Vilfredo Pareto was an Italian economist who noticed in 1906 that 80% of the land in Italy belonged to 20 percent of the people and that 80% of his pea pods came from 20% of his peas. An American engineer, Joseph Juran, popularized these observations, named them the Pareto principle, also called the 80/20 rule, and applied them to quality improvement techniques in business in the 1940s. The 80/20 rule means that in many cases, 80% of the effect comes from 20% of the causes.
Juran, for example, found several applications for the Pareto principle in business, observing that:
- 80% of business problems are created by 20% of the possible causes
- 80% of a company’s profit comes from 20% of its customers
- 80% of a company’s time is spent responding to complaints that come from 20% of its customers.
Let’s see if our grandchildren can illustrate the 80/20 rule.
- Yard or park where birds can be observed
- Pencil or pen
- Optional: graph paper
- For a specified time, an hour, a day or a week, watch the number of birds that come into your front yard
- Record the types of birds seen and how many of each
- The easiest way to record a large number of categories, when you are counting them one at a time, is to write a short tic mark beside the name of each type of bird.
- When you have four marks side-by-side, draw a diagonal line for the next one from the top of the first tic mark to the bottom of the fourth.
- You can then easily count by fives to get a total for each type of bird when you are through counting birds.
- Optional: create a Pareto chart by making a bar chart showing the number of each type of bird on graph paper
What Should Happen?
There should be a lot more of one type of bird than any other. In our yard, for instance it is sparrows. Though we have a lot of different birds, hummingbirds, cardinals, golden finches and phoebes, sparrows predominate by far.
Why Is This Useful?
If you know what category predominates, you may be able to change the numbers. For instance, if we wanted more hummingbirds, we could plant more hummingbird-friendly flowers. Or we could find out the kind of birdseed finches or cardinals like and put that into a bird feeder.
I used to live in Fairfax County, Virginia. Before they started their recycling program, they gathered trash bags and counted the types of trash people were throwing away. They found that newspapers, cardboard, aluminum cans and glass bottles, represented more than two-thirds of the volume of trash they were collecting. They gave everyone in the county a small bin and asked them to separate those items from their trash and put it in the bin. We reduced the number of trashcans we put out every week from three to one, plus a small bin of recyclables.
The Pareto distribution, a few large samples and lots of small samples, applies to a number of areas:
- The size of files transmitted over the Internet. One company, Akamai, built their business around providing caching for a few large web sites.
- The value of reserves in oil fields
- The sizes of sand particles and meteorites.
Carol Covin, Granny-Guru