{"id":52,"date":"2017-12-28T08:31:56","date_gmt":"2017-12-27T22:31:56","guid":{"rendered":"http:\/\/use8020.com\/?p=52"},"modified":"2017-12-28T08:36:11","modified_gmt":"2017-12-27T22:36:11","slug":"roi-of-the-80-20-rule","status":"publish","type":"post","link":"https:\/\/use8020.com\/index.php\/2017\/12\/28\/roi-of-the-80-20-rule\/","title":{"rendered":"ROI of the 80\/20 rule"},"content":{"rendered":"<p><strong>Question<\/strong>:\u00a0How does the ROI of the \u201cimportant 20%\u201d compare to the ROI of the \u201cremaining 80%\u201d of the input\/investment\/\u2019cause\u2019?<\/p>\n<p>If doing (investing, \u2019cause\u2019) the \u201cimportant 20%\u201d of a piece of work, yields 80% of the output (return, \u2018effect\u2019), the ROI would be 80% \/ 20% = 4.\u00a0\u00a0 Let\u2019s label this ROI-20.<\/p>\n<p>Completing the rest of that piece of work will require 4 times more work (investing, \u2019cause\u2019)\u00a0and yield only a quarter, 20%, of the output (return, \u2018effect\u2019).\u00a0 The ROI would be 20% \/ 80% = 0.25.\u00a0\u00a0 Let\u2019s label this ROI-80.<\/p>\n<p>What\u2019s interesting is the <strong>ratio between the two ROIs<\/strong>:\u00a0\u00a0 ROI-20 \/ ROI-80 = 4 \/ 0.25 = <strong>16 times bigger ROI!<\/strong><\/p>\n<p>&nbsp;<\/p>\n<p>Few ideas for application:<\/p>\n<p>\u2013 Individuals: if you are a\u00a0smart cookie and do the \u201cimportant 20%\u201d, your boss will think that you\u2019re doing work of 16 people!<\/p>\n<p>\u2013 Development Teams: if you are in IT, ask the very, very hard question to\u00a0Business \u2013 Why should you do the remaining 80% of the work as the ROI will be 16 times lower?<br \/>\n<strong>Note:<\/strong> If you do get a reasonable answer, perhaps the Business did not correctly identify the \u201cimportant 20%\u201d?<\/p>\n<p><strong>One caveat:<\/strong> be sure to remember that <a href=\"https:\/\/en.wikipedia.org\/wiki\/Joseph_M._Juran\">Joseph M. Juran<\/a>, who named the rule \u201cPareto principle\u201d, \u00a0later on preferred to call the rule \u201cthe vital few and the useful many\u201d to clearly indicate that the remaining 80% of the causes should not be totally ignored.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Question:\u00a0How does the ROI of the \u201cimportant 20%\u201d compare to the ROI of the \u201cremaining 80%\u201d of the input\/investment\/\u2019cause\u2019? If doing (investing, \u2019cause\u2019) the \u201cimportant 20%\u201d of a piece of work, yields 80% of the output (return, \u2018effect\u2019), the ROI would be 80% \/ 20% = 4.\u00a0\u00a0 Let\u2019s label this ROI-20. Completing the rest of [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3],"tags":[],"class_list":["post-52","post","type-post","status-publish","format-standard","hentry","category-general"],"_links":{"self":[{"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/posts\/52","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/comments?post=52"}],"version-history":[{"count":1,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/posts\/52\/revisions"}],"predecessor-version":[{"id":53,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/posts\/52\/revisions\/53"}],"wp:attachment":[{"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/media?parent=52"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/categories?post=52"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/use8020.com\/index.php\/wp-json\/wp\/v2\/tags?post=52"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}