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Prioritize with Pareto

Prioritize with Pareto

Add value by using your limited resources the best possible way. 

All too often we are faced with a lot of data, many customer interactions, long lists of things we tracked, lists of issues and concerns, budgets, numbers, expenses – and we need must quickly figure out where to spend our limited time.

And, if you are like most human resource professionals today, you want the time spent on a particular task or project to be connected to results that improve service, perceptions, acceptance, budgets or any of a dozen other measures.

Here are some thoughts to assist in prioritizing for results.

Consider the Pareto Principle; you may have also heard it called the 80/20 Rule or the 80/20 Principle.  It is not for a bunch of data gobbling geeks to consider the 80/20 Rule; all of us, as human resource practitioners, should know that this simple rule can help us immeasurably.

Richard Koch, in “The 80/20 Principle” says, “The 80/20 Principle asserts that a minority of causes, inputs or effort usually lead to a majority of the results, outputs, or rewards.”

Koch provides some examples. In a store, for example, 20 percent of the products usually account for 80 percent of the dollar sales value. In our communities, 20 percent of the criminals account for the 80 percent of the value of all crime. In our schools, 20 percent of children attain 80 percent of the available educational qualifications. In our homes, 20 percent of our carpet get 80 percent of the wear and tear.

In our human resource world, 20 percent of the employees are involved with 80 percent of the employee relations issues. If you don’t track this kind of stuff already, start tracking it. You will find it is true. I have tracked this type of data for more than 25 years – I have found it to be true.

So, what does this mean for us? It means you need to track some things. Nothing complex. A really good way to track things is to put a pen and a pad at the front desk, by the phone, or where ever the majority of customer / employee / leadership interactions take place, and start making some tick marks. What are the issues and how often do they come up?

At one company where I worked there was a general dislike of the entire employee medical plan. Or, it was voiced as such by employees to HR and to their leaders. After tracking some details for 30 days, and applying a simple 80/20 analysis, we determined that a small group of employees was concerned with how immunizations were reimbursed, and they had a legitimate concern. Because this concern had been ignored for several years, it turned into a general dislike of the entire medical plan. This perception was shared by the majority of employees, most of whom were not affected by the issue.

Additionally, the human resource team tried to offset the employee concern by making deals and exceptions for individual employees, generally based on how loud or frequently they complained or who their manager or senior leader was. This further compromised the perception of the entire medical plan by the majority of employees.

After applying the 80/20 Rule, we understood where action could be taken, made a change, communicated the change, and consistently followed up with regular messages. The issue was resolved in less than 60 days. Result: The general perception of the medical plan improved, going from unfavorable to favorable.

The idea here is we all have so many opportunities to look at some simple data, perform a simple quantitative analysis and then take action in one small place or part of a plan or program. There is no reason not to. There is no doubt, the effort to gather, assess and take action on the immunization issue was much less disruptive, took much less energy and cost much less than the previous approach.

We owe much to the Italian economist, Vilfredo Pareto (1848-1923) and to George Zipf who revitalized Pareto’s dormant theory in the mid 1900’s, and also to Joseph Juran who in the 1950’s applied the concept to “quality,” giving birth in the 1950’s and 1960’s to the global quality revolution. Today, we all live with some form of quality, performance or process improvement approach as part of what we do. If not, you should.

Earlier, we said that 20 percent of your carpet gets 80 percent of the wear and tear. This is an easy one to visualize. In a standard room, the carpet covers the floor wall to wall. However, we don’t walk wall to wall; our foot traffic follows certain paths or patterns. It is this idea of a full data set (wall to wall carpet) within which there are patterns that account for the majority of the outcome (the path we walk on the carpet get worn). Apply this same thinking to your interactions with employees, leaders and with your human resource team.

Look at that list of issues you are tracking. Apply an 80/20 analysis. This will help you decide where to focus your efforts when prioritizing which issues to go after first and how to go after them.

What 80/20 opportunities do you have, right now, today in human resources?

What is keeping you from finding more 80/20 opportunities?

What data or information do you have easy access to, right now, which you can use?

What simple data do you wish you had and what can you do, right now, to start gathering it?

Focus on the 20 percent that will bring you an 80 percent return.

 

 

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Philip Espinosa partners with people to deliver value: People | Partnerships | Value serves as his tag line. As a strategic human resources leader, he believes that service starts with the customer. His book "Deliver Excellent Customer Service with a SNAP” helps others drive customer engagement using simple and consistent communication strategies. A second book titled "Focus On Your Success - 24 Simple Insights To Drive Daily Achievement" (ebook) helps working professionals view their daily choices through a different perspective. In addition to his writing, Philip works with strategic human capital initiatives and has delivered successful results over a career spanning more than 25 years.

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