Questioning the Pareto Principle.

Recently we (ministers of the UCA IN SA) have been sent material re strategy, planning, mission focus - usual "stuff". In amongst it was the mention of, and the advocating of the 20/80 way of looking at things, etc. Well I'm no longer convinced by the "Pareto Principle", so I've gathered, and written, some reflections on it.

The Pareto Principle states that 80% of the results from any series of actions are caused by 20% of the actions themselves. In other words, most of the results we get are because of a small minority of our actions. The rest are either wasted or produce little of value. This sounds like a useful observation. However, before you decide the Pareto Principle is true and can be used to guide our actions can 2 important questions be raised?

• Can anyone identify exactly which actions make up the useful 20%? And can anyone do so in advance?
• Does this useful 20% always contain more or less the same actions?

To consider the first question.
It’s easy to feel intuitively that most results arise from a small group of actions. The Pareto Principle feels immediately valid.

It also feels like a practical tool. Identify the “magic 20%” of actions and you can more or less dispense with the other 80% without much impact on your results. What a marvelous saving of time and effort.

Of course, this only works if you can reliably distinguish the 20% of actions (or people, or events) that produce that disproportionate amount of benefits. It also assumes every result comes from a single, identifiable action — or at least a small, obviously linked group of them.

But is this true? Don’t some results rely on the interaction of large numbers of events, choices, actions and decisions? Can we know which count and which don’t? What if we dropped some, only to find later they were essential in some way? Maybe they only produce good results in combination? Cutting out seemingly unnecessary actions because they don’t appear to fit into the “magic 20%” might turn out to be a poor idea.

The second concern is this: is it always the same 20%?

This week in the life of the congregation, 20% of our work produce 80% of our results. (Yes, I know I'd be better using some kind of business sales program, but bear with me!) Pareto rules! Next week we only need to do as much. Will we do the same 20% of "things" and receive the same 80% of results?

Surely that’s unlikely. You can't repeat the same worship songs, or visit the same people, or .. So we'll just need to find another 20%. But how? Everyone else was in the “unproductive” 80% last week? But if Pareto works, at the end of the next week you’ll once again find 80% of responses came from a new 20% of visits, work, etc..

Give it long enough and every one, program, thing, etc. will, sometime, be part of the 20% that alone are worth concentrating on.

What’s going on? My guess is the Pareto Principle distinguishes groups you can only find after the event, once you can see what worked and what didn’t. The membership of the “magic 20%” of people or actions shifts each time. Wait long enough and every one will sometime be part of that 20% group.

If that’s so, the Principle is almost worthless as a guide to future action, which is how it’s most often used.

I’m not saying Pareto is wrong. I don’t know. I’m not sure anyone has ever done the lengthy and extensive research needed to find out. I’m merely suggesting it’s neither the universally applicable principle, nor the simple measure, nor the practical guide to decisions we’ve been asked to believe it is for so long.

I think the Pareto Principle has great intuitive attractiveness — but that says nothing about whether or not it works, nor how it works (if it does). I’m especially concerned that identifying the 20% of situations that matter may only be possible in hindsight.

That leaves these questions unresolved:

• How do you know which 20% is producing the results? Can you even find out at a time when the knowledge might be useful? If, as I suspect, you cannot find a definitive — if there is one — until after the events are passed, that leads me to a second question.
• Is it always the same 20%? If it’s not (and I suspect it isn’t), over time maybe the whole 100% will be in that magic 20% group sometime. And if that’s true, the Principle applies only to a specific occasion (if it applies at all).

Therefore, it seems to me that the whole idea becomes of little worth as a guide to future action or allocating resources (which is how people try to use it).

It worries me when I hear the Pareto Principle being invoked as a simple and obvious answer to complex questions of forecasting and resource allocation at the level of the local congregation and the Presbytery/Synod.