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Pareto Project Management Print

Are you wasting 80% of your time on project management ?

Steve Izzard argues that applying the Pareto Principle to project management will maximise results.

With many organisations in the public and private sector experiencing change fatigue, it's important to get change management right first time. However, many businesses make the fundamental mistake of over complicating the process by pouring money and resources into effecting change, without identifying exactly where these resources are best targeted. This lack of focus can be fatal to the management of any project, and is a mistake that I have seen repeated many times in the 28 years that I have been working within this area of management. In many cases, 80% of the time and effort spent on project management is wasted due to a lack of focus on the crucial 20% that really makes a difference.

What the Pareto Principle means for your business

The 80/20 rule was first introduced by Vilfredo Pareto (1848-1923) an Italian Economist who observed that 80% of the wealth in early 20th century Italy belonged to 20% of its people. This 80/20 theory was extended by management analyst Joseph M Juran who believed that it could be applied to numerous aspects of management. He concluded that 20% of time and effort in business yields 80% of the results - this became known as the Pareto Principle. By applying this rule to your business, you will be managing the elements that really make the difference.

Taking the lean approach to change

As the Pareto Project management process focuses on the critical 20%, it is the definitive 'lean' approach to change management, but is effective enough to be able to:

- Set up a project or change event to maximise its success
- Performance manage the project, and those involved in it
- Motivate and organise others involved in the process
- Develop effective team working
- Effectively communicate to all involved
- Manage risks and issues before they impact on the change event
- Develop the essential skills to lead and manage others through the change process

However, to maximise the efficiency of this 'lean' approach, a range of areas need to be considered before the project is instigated.

Is the climate right for change?

A simple diagnostic can establish if the organisation's climate is right for the project or change event to take place.  A benchmark to best practice is a useful method of assessing the risk of failure owing to cultural issues or a lack of preparation. The right environment for change is essential for success.

The key stages of the Pareto Project management process are outlined as follows.

Deploy supportive structures

Organise the personnel and roles and responsibilities to ensure that your project/change event is allocated the resources needed. This could take the form of administration support or working parties for example. A supportive personnel structure is a priority fundamental priority.

Establish the objective

Be clear about what needs to be done and place the project in a quantifiable business context then seek funding by producing a business case. The next step is to define and plan the whole project - the 'how?' that will deliver the 'what?' At this stage, the project is formally launched, having established the critical cost/benefit equation.

Execute the project/change event

The change event or project is then executed to the plan using a simple process of risk and issue management, reporting and communication.  A change management evaluation process ensures that the original scope of work can develop and evolve if the business needs dictate.

Implement the project/change event

As the work content of the project is dealt with, attention eventually turns to the implementation and benefit realisation stages.  It is here where the transition from the old method to the new method actually takes place, with competent people in post to run the new method.

Complete the project/change event

At the end of the project, a sign off procedure records the fact that the stages of work are complete and that the anticipated benefits have been realised.  Finally a review is carried out as a formal part of continuous improvement.

Ultimately, if the preparation is carried out to the necessary standard, then the change event will be implemented successfully and reliably. Whilst this is a defined process, it is also a highly focused and simplified. Inevitably, the process must be underpinned by the requisite levels of interpersonal and management competency, but the same Pareto Principle applies to the 20 percent of 'the vital' to the 'soft skills' defined as follows:

- Getting yourself organised first
- Creative problem solving
- Effective delegation
- Essential communications and reporting
- Setting up, developing, co-ordinating and running teams
- Performance management and continual improvement

The measure of success

Having implemented the process in a range of organisations from both the private and public sector, I can vouch for the efficacy of the Pareto Project management process as one which has been deployed successfully on many occasions to successfully deliver complex business change.

An example from the public sector can be found in a South West HM Prison where the process was used to submit a performance test bid response to countermeasure a failure against performance targets. Similarly, a recent project from the manufacturing sector involved the establishment of a lean, flexible manufacturing plant to enable highly bespoke project solutions to be made at lowest cost producer levels saving that particular business over £975,000 per annum.

Few people would argue with the notion that change should be managed effectively and economically, yet in reality this is rarely the case. Ultimately organisations want reliable results, quickly, that can be measured and managed along the way. By applying the Pareto Principle to the art of project and programme management, businesses will be able to identify what really makes the difference and act accordingly. The message to managers and business leaders is simple: reject the trend of complexity; to achieve optimum results, focus on the 20 percent that really matters.

2006 © S. G. IZZARD

About the Author

Steve Izzard is Managing Consultant of BML, ( )
 a change management consultancy based in Leicestershire. His portfolio of clients includes Dudley and Wythenshawe NHS Trusts, Norwich Union, Scottish Provident International, CGU Life and HM Prison Service. Steve specialises in managing complex change programmes and projects from conception to their commercially successful conclusion. 


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