Pareto: Focus Your Efforts

For some of my work with the Metrics Champion Consortium, I was looking at MHRA inspection finding categories. MHRA publish reports on their findings – the most recent is for the year 2017-2018. For major findings, 86% are within just 21% of the categories. If this is representative of the industry, then focusing our improvement efforts on the processes associated with those 21% of categories could have a disproportionate impact on findings in the future. This fits the pattern of the Pareto Principle.

The Pareto Principle was proposed by Joseph Juran, a 20^th century pioneer of quality improvement. He based it on the observation of the economist Vilfredo Pareto of Italy who noted that 80% of Italy’s land was owned by 20% of the people. The principle is that in any given situation, roughly 80% of the effect is due to 20% of the causes. It seems to work well in many fields, for example:

- 20% of the most reported software bugs cause 80% of software crashes
- It is often claimed in business that 80% of the sales comes from 20% of the clients
- 20% of people account for 80% of all healthcare spending
- Even in COVID-19, 80% of deaths have occurred among 20% of the population (65 and older)

The principle is sometimes called the 80:20 rule or the law of the vital few because it implies that if you can focus on the 20% and put effort into improving that, you can impact 80% of the results – having a disproportionate effect on the whole. It is regularly discussed in business and I once worked with a company which had the 80:20 rule as one of its guiding principles.

Davis Balestracci’s Data Sanity has a really interesting observation on the power of the Pareto Principle in process improvement. One mode of process improvement is taking the exceptional and trying to understand why it happened and to learn from it. So, if site contracts in one country take much longer than in others to finalise, you can focus on that country to understand why and to improve. Or, of course, you could take the country with the shortest cycle time and try to understand why so you can spread “best practice”. This is the world of root cause analysis (RCA) & CAPA and can be effective in improvement. But what if the approach is over-used – for example maybe there are regularly issues detected in site audits for clinical trials that relate to problems with the process of Informed Consent. If there are many issues, then perhaps it would be better to look at them all rather than take each one individually as its own self-contained issue. In other words, maybe there is a systemic cause that is not related to the individual sites or studies. If you took all the issues (findings) together, you could use the Pareto Principle. It’s likely that 80% of the effects seen are due to a small number of causes. Why not work to find out what they are and implement changes to the whole system that affect those? Then continue to measure over time to see if it’s worked. Isn’t that likely to get better results than lots of independent RCA & CAPA efforts that each only has a small part of the picture?

That does bring up the challenge of how you determine when one issue is similar (or the same) as another. If you categorized all the issues in a consistent way, you’d see that around 80% of the observed issues come from 20% of the categories – the Pareto Principle in action. Just as we see from the MHRA. It’d be a good idea to focus process improvement on those 20% of categories.

Next time you look to improve a process, make sure you use the Pareto Principle to help focus your efforts so you can have maximum effect.

Tip: Pronounce Pareto as “pah-ree-toh”

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