Pareto's Principle Informative - 20/80 Principal
Merriam-Webster defines satisfaction in the following manner:
1 a : the payment through penance of the temporal punishment incurred by a transgretion b : reparation for transgretion that meets the demands of justice
2 a : fulfillment of a need or want b : the quality or state of being satisfied : CONTENTMENT c : a source or means of enjoyment :
3 a : compensation for a loss or injury : ATONEMENT, RESTITUTION b : the discharge of a legal obligation or claim c : VINDICATION
4 : convinced assurance or certainty
As a new member of the My3cents “family” and having read a large number of reviews and postings, I have come to wonder if any company can provide decent service, quality products or can stand behind a their product or service.
Therefore, we have no satisfaction, (2 a,b,c), because the provider of said product or service will not give us satisfaction, (1 a,b), so we seek from other resources and parties, satisfaction, (3 a,b), until we obtain satisfaction, (4).
But I must take pause, and consider Perento’s Principle, as applied by Joseph Juran or the rule of 80/20 and how it applies to us in our everyday dealings and are we victims of our lack of understanding of the principal.
Perento used the principle to describe the socio-economic conditions of Italy at the turn of the 20th century by propounding that 20% of Italy’s population was vital because it controlled 80% of all the wealth and moved the Italian markets. The remaining 80% of population controlled only 20% of the wealth and was less vital in that it had less impact on the economy.
Juran, on the other hand, utilized the principal for business theory and as such came down to us in the form we most commonly refer to today. 20% of salesmen do 80% of all sales. 20 % of defects cause 80% of all problems. In effect 20% of anything is responsible for 80% of all results and outcomes. (Go to the Juran Institute’s website where this principle is explained in a fashion better than I could or care to provide here.)
While there are many directions that could be taken from this juncture to make any number of arguments regarding the resultant effects of reality, I would chose to apply this to products that we use, and through such usage, give us such heartburn and angst; Consumerism.
Therefore, 20% of what we buy is vital and 80% is not. It naturally follows that 20% of out income is spent on what is vital and 80% to varying degrees frittered away on that which is not vital. Sobering when put in those terms and contemplated.
Using my own existence as example, I can surmise many things that are not vital and give me ire and as such raise my blood pressure. I offer but a few as example, in no particular order, some may strike a cord with some and not others, but it is up to you to analyze your own reality to find your 20%.
1. Cell phones. I was late to get one but somehow managed to survive 42 years without one. While not a major cause of problems, it has not been a trouble free relationship either. Before cell phones I carried a roll of quarters in my car if I needed to make a call. The roll lasted a long time and this worked well for many years. Net cost was less than $10 per year. My cell cost over $1000 per year and at least for me is under used. Place this in the 80% non-vital category. I could go back to carrying quarters or get a pay as you go phone with a 30 minute card for under $100 per year.
2. New cars. I always purchased new cars from an industry that over the last few years has raised prices like the vast majority of workers are still getting pay raises to match their price increases. Most of the blue and white collar workers are not getting raises and cars have gone from 33% of the per capita median income to about 70%. I have an old high school friend who over the years just bought beater cars that provided sufficient transportation for a couple of grand and got rid of them when they crapped out, on average 18 months, give or take. I have had my warrantee battles with Ford, Chrysler and Nissan, where I came unglued because of defects and dealing with these manufactures and their service facilities My buddy has not. My friend is retired and I still have to work 10 or 15 more years even though we have had similar careers and pay. I made car payments, he bought mutual funds. What car company has not gotten a negative review here? Say $2000 savings per year.
3. Cable/Satellite TV. 500 channels of commercial television controlled by five companies with nothing but reruns, sitcoms, insipid reality shows, infomercials and twisted news interrupted every 7 minutes with the same commercial over and over and over. 50 bucks a month without the premium channels, whose main fare I wish to point out is rotten movies like “Corvette Summer”, anything that starred Marjoe Gortner, and 70’s and 80’s “boob” movies. What a waste of money. Throw in a high dollar HDTV or Plasma set to get a better picture of this junk and your really tossing cash away. Get out and do something, exercise, do charity work, get involved politically, but why pay to ruminate, vegetate and clog your arteries. Go the Sport’s bar for sports. At least you might meet new people. Saving $600 per year, potentially better health and mental outlook, and no grief from the cable, satellite and electronics companies listed on this site.
Now, while I could go on to book length of my personal reality check of computers, Ipods, Blackberry’s, computer programs and even premium gasoline, to name but a few and the expenses and grief they all gave me, I think the idea is defined well enough. Discovering the 20% of what is really vital for me to obtain satisfaction was my journey. You must now go forth on your own trek to peace and sanity devoid of unnecessary crooks and unsavory con-artists that quickly take your money and slowly see to your satisfaction.
Right here is $3500 dollars better applied to vital things and not grief causing non-necessities. We are raising out collective blood pressure dealing with a load of blood leaches and their junk that are not vital to our existence or any type of personal satisfaction in the quality of our lives.
I’m satisfied with my 20/80. Are you?