How to Use the 80/20 Rule in Project Management

In 1906, the Italian economist Vilfredo Pareto famously observed that 20% of Italy’s population owned 80% of the country’s property. 35 years later, Joseph M. Juran, an American engineer and management consultant, began to apply what became known as the Pareto Principle to quality issues in business. The 80/20 rule, as it is more commonly known, states that 20% of inputs give rise to 80% of outputs.

Fast forward nearly 80 years, and what started as an observation regarding the connection between population and wealth is now a commonly used rule across different business sectors. Computer science, engineering, health and safety, sales, and IT all have their own applications for the Pareto Principle.

Project management is no exception. Project managers, both certified PMP and uncertified, use the 80/20 rule to optimize how they spend their time and focus on the project areas that generate the most value. This post will discuss how the 80/20 rule is used in projects, the pros and cons of doing so, and look at some examples of various industries and their use of the 80/20 rule.

On this page:

• 80/20 Rule in Project Management
• How to Use the 80/20 Rule in Projects
• Pros and Cons of Using the 80/20 Rule
• Business Examples of the 80/20 Rule
• Summary

80/20 Rule in Project Management

There are many moving parts in any project management effort and keeping your project on track while hitting milestones can make it hard to identify the most impactful tasks. When applied to project management, the 80/20 rule asserts that completing the 20% of tasks that are most urgent will drive 80% of the results. In other words, out of ten tasks your team must complete, two are more important than the others. The Pareto Principle can help you understand which tasks matter most to the project, allowing you to prioritize those tasks to make the most of your team’s time.

How to Use the 80/20 Rule in Projects

Every project is unique and requires careful planning to ensure teams can deliver fast and efficient results. Project managers have a range of tools and methods at their disposal to keep their teams on track, including project management software, Gantt charts, work breakdown structures, timesheets, and more. When it comes to the 80/20 rule, using it as a general framework can help you to prioritize your project’s tasks to get better results.

The Pareto principle is particularly useful for projects where you have many tasks to complete and need to prioritize them. You can employ the rule by completing the following steps:

1. Evaluate the goals of your project
2. Divide the tasks into two categories: high value, low effort and low value, high effort
3. Spend most of your resources on the high-value, low-effort tasks and the remaining resources on the low-value, high-effort tasks
4. Adjust or refocus as needed throughout the process based on changes in objectives or resource availability

It is vital to remember that just because 20% of tasks are the highest priority, it doesn’t mean that the other 80% are not important to a project’s success. Overlooking the low-value tasks can have negative implications for the high-value tasks and derail your project altogether.

You can also use the 80/20 rule to identify and solve difficulties that arise during the lifespan of a project. Project managers often turn to Pareto Diagrams to find issues that commonly cause problems, defects, and customer complaints. The data shown in a Pareto Diagram makes it easy to identify and prioritize the most pressing issues impacting the project.

In a Pareto Diagram, select the item that is causing the greatest issue and correct that first. This method allows you to use the least amount of effort to correct the most pressing problems and is a data-driven way to improve your decision-making and problem-solving skills.

Pros and Cons of Using the 80/20 Rule

The primary benefit of the 80/20 rule is that it helps streamline project management by making it easier to identify less critical tasks and prioritize the most urgent and impactful ones. Having a thorough understanding of the strengths and shortcomings of this principle is important to determine if it should be implemented in a project.

Let’s explore the pros and cons of using the 80/20 rule in project management.

Pros of the 80/20 Rule:

• Identifies areas that can be streamlined to reduce project costs and timeline
• Focuses on high-impact, high-value tasks
• Allows for more efficient use of resources and increases team productivity
• Identifies problems that your team is experiencing so you can address them

Cons of the 80/20 Rule:

• High risk of oversimplifying complex tasks and problems
• Not all projects are suitable for the application of the 80/20 rule
• Does not account for changes or factors outside of its scope
• Can cause the team to overlook other, less important but still essential tasks
• Misinterpreting the principal can lead to lazier, lower-quality project management

Certified Project Management Professionals (PMP) balance using the 80/20 rule while still making sure a project is completed on time and within scope.

Business Examples of the 80/20 Rule

Seeing real-world scenarios where businesses have used the 80/20 rule can help you understand how to use it in your work. Project Management Professionals (PMP) in various industries leverage the 80/20 rule to optimize operations and boost revenue. Here are a few examples of how different types of businesses use the 80/20 rule to improve operations and increase revenue.

Example #1: An airline focused its resources on the 20% of destinations that generated 80% of their customers.

Example #2: A retail business used predictive analytics to identify which 20% of its customers generate 80% of revenue and tailored marketing initiatives to appeal to those customers.

Example #3: A software development team identified which 20% of its tasks were the most important to complete first and allocated resources accordingly.

Example #4: A marketing team publishes 20% of social media posts that generate 80% of shares and targets their efforts on creating similar content.

Summary

Every project has tasks that are mission-critical, and understanding which ones to complete first will set your team up for success. The 80/20 rule can be valuable for assigning tasks and helping both uncertified project managers, as well as Project Management Professionals (PMP), to work more efficiently. The more impactful your work can be, the less time you waste, and the better your team will perform. If you can identify the 20% of quality work that will produce 80% of the results you need, you’re sure to keep the project’s stakeholders satisfied and demonstrate adept leadership as a project manager.