Do less and achieve more - using the Pareto principle

By Spencer Humphrys. Founder of Nexus Consulting

Most people don't have an effort problem.

They have a focus problem.

Too many initiatives. Too many “priorities”. Too many things on the to-do list. Too many metrics that don't actually mean anything.

I don't think I've ever visited any organisation and said, "You really need to do more work. Oh, and your action plans should be twice as long". What is consistent is that I always tell people to do less, just do what actually matters. In Hampshire, for example, we cut their Urgent Care programme by 84%.

The Pareto principle — the idea that a small number of causes drive a large share of outcomes — isn't new. In fact, it's been around for over 100 years. But in complex systems such as health, social care, or start-up businesses, it is often misunderstood or ignored.

The goal isn't to work 20% as hard. The goal is to identify the 20% of activity that will drive 80% of the outcomes you want.

Quick note - don't get obsessed with the 20% figure. It's the concept that the vital few are more important than the trivial many, not getting a perfect 80/20 split.

Remember: If your action list has 50 items on it, each is only worth 2%. We know opportunities aren't evenly spread, so don't evenly spread resource either.

The uncomfortable truth

Most organisations are improving the wrong things.

Philosophically speaking, if you improve something that doesn't help achieve the goal, have you improved at all?

Maybe that's for another day. Examples of wasted 'improvement' effort are everywhere, and in the worst cases, they actually make things worse.

'Vacancy control panels' in the NHS are a great example. In my experience, they just frustrate staff, add unnecessary work, slow patient flow through the hospital, and, ironically, increase costs as length of stay goes up. The box is ticked, but nothing is better. That's because ensuring only the right roles are recruited to is almost always way down the list of actions that will actually save money in a sustainable way.

Local optimisation feels productive. Ignoring the really difficult problems feels sensible. Why bother with difficult things when there are so many easier issues to tackle? This is where using the Pareto principle is key. Use it to quantify the real issues to solve. But when you've found the big delays, which one really matters?

This is where the Pareto principle needs a partner: the Theory of Constraints (TOC).

Pareto finds concentration. TOC finds the limitation.

The Pareto principle tells you where impact is clustered. But the Theory of Constraints asks a different question:

What is the single constraint that most limits throughput right now?

There are many studies that have shown the impact of applying the Theory of Constraints in everything from plastic manufacturing to reducing radiology wait times. We almost always use it to understand A&E waits when we're doing an A&E performance improvement project. But we don't need to go into the studies. Simply put, if you solve the problem that has the biggest impact on patient flow, then patient flow will improve. It's really not rocket science. But if you improve anything that isn't the actual problem, you won't really improve anything.

The simple approach

Like everything, you can go down the rabbit holes with the Pareto principle and the Theory of Constraints, all the way up to MSc level (and higher).

But simple rules work when you just need some guidance to get started.

1. Define the outcome you want. Not the process performance, but the outcome (e.g. you don't want a really busy Same Day Emergency Care (SDEC) unit. You want an SDEC unit that avoids lots of admissions. They're not the same.).

2. Use real data to identify what causes the current poor/low/unideal outcome. If you don't have it to hand, go and watch. Spend time where the problem is.

3. Identify which step, delay, or problem is the actual constraint that slows flow.

4. Protect that process. Make sure it's as efficient as possible. Add additional resources if necessary. And keep it working for as long as possible each day.

5. Stop launching unrelated improvement initiatives until flow improves.

6. Start again.

   
   

The biggest mistake I see senior leaders make

They confuse activity with impact.

'Improvement' is pushed across all departments equally. Everyone is held accountable for “doing more”. But we know that improvement is only needed in a few high-impact areas. And the risk of trying to make everyone better is that you end up with more point optimisation, which causes even more delay and friction in system flow.

This approach to improvement is based on science. It needs rigour and analytics. But most of all, it needs restraint and courageous leadership. It needs someone to say, "I know we could be running 15 projects right now, but we're just going to do two. And we're going to do them really well".

A final challenge

Be honest with yourself. And ask:

What single bottleneck in your division, organisation, or company is everyone politely avoiding?

If that's not the main thing on your to-do list, you need a different to-do list.