The Pebble Effect That Causes Big-Time Business Problems

by | Jan 25, 2012

 

Imagine you have a pebble in your shoe.

Now imagine you’re a glutton for punishment. What would happen if you continued to walk on it?

  1. You’d start favoring that foot
  2. That throws off your gait
  3. It puts your body out of alignment
  4. Your knee hurts – your hip is sore – your back screams
  5. You end up with surgery

Extreme? Sure.

You wouldn’t keep walking with a pebble in your shoe.

Then why do we ignore business issues that cause so many problems?

Find the Pebble

There’s a management theory known as the Pareto Principle. You may know it as the 80/20 rule.

Originally it was an observation by Italian economist, Vilfredo Pareto, that 80 percent of Italy’s wealth was owned by only 20 percent of the population.

Later, quality management innovator, Dr. Joseph Juran, put a different spin on the 80/20 rule.

  • It recognized “the vital few and trivial plenty”
  • 20 percent is responsible for 80 percent of the result

If you hate math, think of it this way.

To avoid major surgery – find the pebble in the shoe

Focus on the Pebble

I participate in the 3-Day, 60 Mile Walk for the Cure.

The littlest thing can cause the biggest problem.

  • The pebble in the shoe
  • One tiny blister
  • A too-full fanny pack

The irritant quickly becomes your focus.

Concentrate your efforts on the few issues causing the biggest problems.

Here are a few business examples.

Business Communication

Spend most of your time on the upfront work for writing.

  • Create an outline that acts as your blueprint
  • List the type of information you need for research
  • Scan resources for highlights, then zero in on the relevant information

Time well-spent on preparation produces fewer problems in the end. 

Case Study

Here is an example taken from my past life as a consultant in the health insurance industry.

One of my roles was managing claim audit projects on behalf of our employer clients.

  • Our auditing system selected a random sample of claims for review
  • A team of field auditors worked onsite at the insurance carrier’s claims office
  • We produced a statistical analysis and observation report for the employer client

Programming errors caused a significant percentage of payment and claim processing errors.

One coding error for a covered procedure would create a processing error – over and over again.

One error – big-time problems.

Working Smarter

One of my goals each year is working smarter.

To accomplish that, think Pareto Principle.

  • Focus on what matters
  • Focus on the right things

Focus on that pebble.

What pebbles have you found?

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4 Comments

  1. Roy A. Ackerman, Ph.D., E.A.

    Ah, the pebble in the shoe! And, I think Pareto dated himself- there is no way it takes that that many folks to own 80% of the wealth in Italy! (Try 5% at best.)- which may mean we need to reconsider the Pareto principle for our businesses, too- two echelons- the top 5 and the top 20!
    Seriously, though, take Cathy’s advice…

    Reply
  2. Cathy

    Hi Roy: I often share one of my favorite Mark Twain’s quotes – There are three kinds of lies – Lies, Damn Lies and Statistics. 🙂

    I’ll leave math to the smart people, like you, Roy. 😉 Thanks, as always, for stopping by, Roy.

    Reply
  3. Lori

    Terrific analogy, Cathy.

    I’ve used Pareto a lot – it never fails to be true in my experience.

    Reply
  4. Cathy

    Thanks, Lori. Do you use a calculator? 😉

    Reply

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