• The Pareto Principle vs. the Necessity of the Unnecessary

    edited by Alexander Becker on October 16, 2006 | Link

    Most of the results in a given situation are determined by a fairly small number of causes. Is it possible to increase this small number of high-performing causes while at the same time decreasing the relatively high number of underperformers?

    The Pareto principle (also known as the 80-20 rule, the law of the vital few and the principle of factor sparsity) states that for many phenomena, 80% of the consequences stem from 20% of the causes. The idea has rule-of-thumb application in many places, e.g., 20% of clients are responsible for 80% of sales volume. It must be implied that a particular solution requires only 20% of the resources needed to solve all cases.

    80% of the consequences stem from 20% of the causes. It is usually implied and recommended to focus on the 20% since this is where the return on investment originates. In our eternal quest for optimization, let's take a look at the dark side, the apparently unnecessary, the 80% of causes as determined by the Pareto principle. What about those non-vital many? What can we learn from the majority of effort and activity that doesn't return any significant results, compared with the top performing 20%? Are the 80% of causes providing only marginal returns, necessary after all? Wouldn't it be only logical to try and eliminate the underperforming causes and replace them with more efficient ones? Why can't we make the 20% our new 100%?

    On the other hand, it is written elsewhere that quantity increases quality: Without quantity there is no recognizable quality. The more quantity though, the higher the value of determined quality, which compares to each and every instance produced. What about increasing those very 80% in order to increase the overall whole and thereby maximizing the net gains from the useful share? Now, consider the necessity of the unnecessary, illustrated by --

    Zhuang-zi (Chuang-tzu): What comes from Without, Book 26/7

    Master Hui said to Master Chuang,
    You speak, Sir, of what is of no use.
    The reply was,
    When a man knows what is not useful, you can then begin to speak to him of what is useful. The earth for instance is certainly spacious and great; but what a man uses of it is only sufficient ground for his feet. If, however, a rent were made by the side of his feet, down to the yellow springs, could the man still make use of it?
    Master Hui said,
    He could not use it,
    and Master Chuang rejoined,
    Then the usefulness of what is of no use is clear.

    The share that is of no apparent use enables -- it even defines -- what is useful in the first place. The useful is part of the whole as much as that which is of no immediate and direct use. By eliminating a part of the whole, you do not increase any other part. In fact, you decrease the whole and the constituting, the remaining parts since the ratio stays the same. Zhuang-zi wins and saves the Pareto principle.

    Tags

    If you liked this post, please take the time to bookmark it or subscribe to get updates.

Subscribe to the new format to have the latest items conveniently delivered for free. You can also subscribe by E-mail.

Previous Posts

Free Download

Peer pressure, vanity and behavior, motivation tricks and hacks, success and pain, and how to excel, Celebrate Your Beauty -- whatever it takes. Download your free ebook.