The 80/20 Rule: Why everyone in Consulting uses it (Pareto principle)
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- Опубликовано: 27 июл 2024
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This video goes in depth on the 80/20 rule. The 80/20 rule, also called the Pareto principle, is a key principle followed by virtually everyone in consulting. I will tell you why everyone in consulting uses the 80 20 rule. Pareto principle explained! The Pareto principle was first invented by Vilfredo Pareto. In management consulting firms like McKinsey, BCG or Bain, the 80-20 rule is widely used by consultants. In this video, I show you how to use the 80/20 rule. 80/20 rule explained - let me teach you this essential consulting skill. I will provide many examples for the Pareto principle and the 80/20 rule. For every strategy consulting business and other high-paced careers, the 80/20 rule and Pareto principle are fundamental concepts to master.
Chapters
00:00 Introduction
02:15 Primer and Examples for Pareto Curves
04:30 Pareto Analysis for Consulting
07:30 Skillshare
08:53 80/20 Rule for Team Management
12:26 Wrap-up
This video was sponsored by Skillshare.
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You wear 20% of your clothes 80% of the time 😀
Isn't this true for most people ;)
Lol
20% of the places you hang out (News feed of Facebook, Twitter, Instagram, TikTok, Linkedin, RUclips) make you loose 80% of your time.... (which you can´t buy. You can´t go to the supermarket and buy time....)
Love your outdoor shots. Such aesthetics!
I personally try to apply 80-20 to my time management. We have a general tendency to spend a large amount of effort on tasks and activities that don't contribute as much to our overall development in the long-term. Always a good idea to take a step back and see what we are heading towards, on a personal level as well.
Hi Rishav, thanks for your comment. Yes, this is indeed an important aspect. Agree that most people (probably me included) spend lots of time on activities that are not really moving the needle. Indeed great to reflect and focus on the right tasks. Best! Heinrich
As a Restaurant consultant, I consistently see how 20% of the menus represent 80% of the income. This helps on our marketing approach and to control costs and increase sales.
I am Marketing Consultant, do you also do data analysis?
@@gilberttorres8 yes, that’s my area of expertise at Gravitas Group.
@@rauljacobs5198 That’s good, I want to specialize in marketing analytics. Was it hard to get into that area of expertise?
@@gilberttorres8 It's not hard if you enjoy it. It just takes time to learn and above all the time you need to get on the practical side of it. Nowawadays is easier than before due to the wonderful tools that do most of the work for you.
@@rauljacobs5198 that’s good 👍🏽, I am in the process of learning SQL to query databases. What tools do you like using to do your analysis
Basic principle to start analysis. Thanks for sharing it. More like this!
Hi Muhammad, thanks for your comment. Indeed a great basic technique to get yourself started. Best! Heinrich
Great video!
Thanks for watching!
I understood the Pareto principle as the 80% trivial and 20% vital. Being a principle, percentages can vary even more drastically in particular instances (e.g. 95%-5%). Nice video. Thank you Heindrich.
Sorry for mispelling your name, I meant Heinrich.
Yes in principle fully agree. Thank you for watching! Best, H
Quality content and consistency👌
Thank you Monzer, super happy to hear that! :) Best, Heinrich
I was waiting for this video for long time.Thks friend
Thank you for watching Vandit!! Great to hear you were looking for such a video :) Best, Heinrich
@@FirmLearning Sir how to analyse un the beginning whether particular thing belongs to 20 % which will belong to 80 % output so we can strategies accordingly?
@@vanditdesai5 Start by studying Tim Ferriss‘ way of applying it.
My team mate who was a consultant as well also always talks about being 80/20 :D
Thank you for watching. Indeed typical consultant behavior ;)
80/20 is the secret of great sales people. You calculate the potential of your customers as a list. Then you will notice 80% of the future turnover come from the 5% listed. Then, you just focus in visiting then and voila! Turnover shall start from them.
Hi, thanks for your comment. Yes fully agree, indeed focusing your time and effort on the right clients can have tremendous effects! :) Best, Heinrich
Avid subscriber - thanks for another video :)
Hi Arina, thank YOU for watching and your comment!! :) Best, Heinrich
I want to be able to speak more like you Heinrich - the enthusiasm in your voice is infectious. Did you craft this manner of speaking to improve your influencing skills at work or is this natural to you? I would appreciate a video on how to speak with more charisma as right now I'm a bit flat or montone 😅
You are really good thanks!
Super kind of you, thanks!
Really love this video, Heinrich! Just curious what is your take on how to navigate 'Detailed/Boil the Ocean' sort of Management Style? In my experience, it seems like there is a push for 'Perfection', to get more details, to analyse more things etc in the Corporate landscape
Hi Mei Yen, thanks for your comment and watching! Yes agree that this is an issue, this is also why the remark of being 80/20 is sometimes also used in a bit ironic way because of course many things that are done in consulting or industry are not 80/20 at all! :) What can sometimes help is to align on priorities with your team lead. Talk with him / her and discuss the things that you have on your to-do list, then agree what the priorities are and focus on those :) Best! Heinrich
Hey, thank you so much for your insightful videos:) As your objective, they really help us succeed in navigating our way in consulting. As you know this is the time for reviews, would be really helpful to have your suggestions for those with first reviews(for filling as well as meeting), few projects-some great some okayish.
Hi Chhaya, thanks for your comment, happy to hear that. Indeed a great video suggestion - might pick it up for future videos!! Best, Heinrich
@@FirmLearning Thanks Heinrich, looking forward:)
Knowledge on the go
Thank you for watching Felix! :) Best, Heinrich
Clear and concise. You just earned a sub.. Can you make a video of "how to write emails to customers or leadership as a consultant?"
Hi Brian, thank you, great to hear that! Yes, this sounds like a good video idea. Might pick it up for a future video!! Best, Heinrich
Insightful as usual... thanks a lot Hienrich!
What tips would you give to someone who has a tendency to "boil the ocean" ?
Hmm difficult to give generic advice on this as it will very much depend on the type of situations where you are boiling the ocean ;) But trust that being aware of this is the first step to improving it! Best, Heinrich
Awesome. Could you please help me knowing what to expect in the technical interview for 'knowledge analyst-procurement' at these consulting firms.
You are doing a fantastic job. Thanks a million. God bless you.
Hi, thank you for watching! Interesting topic, as this is a bit more specific and hard to answer in a comment, might take this up in a future video, talking about interview requirements for specific roles. Best and lots of success to you!! Heinrich
Impressed with the camera person walking backwards and not tripping during these new intros!
Indeed took some practice ;) Thanks for watching!! Best, Heinrich
Great video 👌🏻 how would you structure a more in details business plan/sales strategy? That would be an awesome video ✔️
Hi Frank, thank you for watching and your video idea. Indeed cool topic, might pick it up in a future video!! :) Best, Heinrich
Thank you for creating this great video
I use 80/20 in my work when I have data and this strategy helps me a lot.
I would like to use the same strategy for my personal goals in order to focus more on the 20% that will bring 80% of the result, the problem is that I find it difficult to identify the top 20% of activities because I do not have data to analyze, so do you have any advice to overcome this problem?
Thank you so much
Thanks for your comment Alfredo, great to have you as a viewer of the channel. Hmm find it a bit difficult to give generic advice on this. Would depend quite a lot on what type of things you are working on and how you currently spend your time. Trust that realizing that the time could be spent more effectively is the first step in making these changes happen though :) Best, Heinrich
iCYMI, when it comes to the relation between customer loyalty and revenue the pareto principle typically doesn't hold. It rather follows the NBD Dirichelet. At least according to the people at the Ehrenberg-Bass institute.
Interesting perspective Sebastian, will look these terms up! :) Best, Heinrich
Do you find that 80% of the comments come from the most loyal 20% of your viewers? :-)
Yes this is for sure true. Thank you for being part of this loyal group Alistair!! :) Best, Heinrich
Hi Heinrich. Magst du auch mal über deine aktuelle Rolle bei dem Retailer sprechen? Wäre bestimmt interessant.
Hi Daniel, ja das könnte in der Tat bald mal ein Video wert sein! :) LG, Heinrich
Hi there, do you offer advising/training for people who are considering about getting into consulting? :)
Hi Coco, yes, planning to launch a training program exactly on that topic later this year. Stay tuned :) Best, Heinrich
I got out of consulting and went back into the industry. In Consulting 20% of my projects were amazing, but the remaining 80% were just the driest drivel.
Thanks for sharing! Must say the quota was better for me, but appreciate you sharing your perspective :) Best, Heinrich
can someone elaborate on the difference between output and outcome? thank you
As I understand it,input is the resources you have , tools , know how , money , time ; output is the work you do with such tools ; outcomes are the fruits of that work , Impact would be how these fruits and the whole process changes you and your environment . Google "Logic Model"
Output is not put to the scrutiny of results and metrics - as a sales I can say 'I had 10 conversations with new clients last week', which is an output, but what about the outcome - how many of these conversations resulted in new business opportunities being created? What is the revenue potential of these new opportunities, etc.?
Hi Mykola, thanks for your comment! As I am not an English native, probably others are better equipped to answer this. For me, output is more used in production contexts, referring to units produced or similar tangible results. Outcome for me is a broader term, potentially encompassing output but also other types of more non-tangible results. E.g., a decision could be an outcome, but would usually not be considered an output. Best! Heinrich
@@FirmLearning Thank you for the great work that you do - your videos for you are outputs, but general knowledge that we gain from your experience is a great outcome for all of us I hope. Keep it up!!!
@@mykola_kanyuk awesome ;) thank you Mykola!! Best, Heinrich
KONZALTING ❤️
Hi Alexander, thanks for watching!! ;) Best, Heinrich
Warum ist jedes Video so spannend? Hab jetzt 8 Tabs offen... wird wohl ne Nachtschicht
Hi, freut mich sehr dass die Videos gefallen. Hoffe es ist gestern nicht zu spät geworden ;) LG! Heinrich
@@FirmLearning Du bist einfach wahnsinnig sympathisch und echt. Ich selber denke schon eine Weile über Consulting nach dem Studium nach und grade diese Einblicke sind Gold wert. Du beantwortest alle Fragen die ich mir gestellt habe oder noch Stellen werde :D Danke dafür!
@@mrsogoras Super lieb von dir, vielen Dank!! LG
@@FirmLearning 80% geschafft 20% zwischendurch eingenickt vermute ich 😉
What is your thoughts on OKR's?
He already has a video on that. 😊
Hi Frank, indeed check out the video on Goal Setting for 2021 for some insights on this topic :) Best! Heinrich
When you said let's be pragmatic and not perfect always. My mind clicked because I guilty of wanting the 100% and give it 100% effort instead of using my best time to get 80% of the results!
Appreciate it is helpful - all the best to you! H
I would love to apply the rule of 80/20 while eating 🍕 😜
A good meal never hurt nobody ;)
1st comment!
First indeed :) Thanks for being a regular viewer of the channel!! Best, Heinrich
@@FirmLearningyour enthusiasm in your way of speaking is unparalleled!
@@mightyowl1668 Too kind of you, thank you!
KONZALTING 😊😊
❤️
Where I work, 20% of the employees do 80% of the work. I always wonder how the other 80% of employees still have jobs.🤔
And you are using Pareto on Pareto, we Talk about a 64/4 Rule
Hi, thank you for watching and your comment! Hmm frankly not super clear what exactly you mean with "Pareto on Pareto" or the "64/4 rule". Happy to learn more about this :) Best, Heinrich
@@FirmLearning I think he was trying to make a Pareto joke haha: 64/4 is (80% of 80)/(20% of 20)
Question is… do you already read ebooks at 2x speed? ;-)
2x speed is a bit too fast for me, rather go with 1,5x ;) Best, Heinrich
Pareto 80/20 for land ownership is now 99/1
Indeed, trust it got even more concentrated! Best, Heinrich
@@FirmLearning Much respect for replying to nearly all the comments you receive! That is a herculean effort!
This sounds so extremely unscientific and therefore like a ridiculous phrase. Sorry but why do people in consulting try to have such non sense phrases? It is by far not the reality and of course it fits your examples because the derivation of the 80/20 can be high so you adopt easily. But what is the sense in such phrases? I don't get it! It just sounds like someone who has little knowledge to sound fancy. But unfortunately in a bad way.
Hi, fully agree that this is not a scientific principle but rather a rule of thumb. Also do not think that anybody uses it to sound "fancy" - as said in the video it is often used in a rather ironic way as it is so frequently referred to, not only in consulting. Overall I agree though that there is lots of "consulting jargon" which often does not really add any value to a discussion. Best! Heinrich
Hey Kid, please apply that wisdom to your own videos. 80% of what you convey could be done in 20% of the time. 13:30 is mega long for such a simple concept. Give it a second try under 3 minutes. (inspiration: look at the nielson norman videos).
Hi, sorry to hear the video did no appeal to you. Still thanks for watching and the feedback. Best, H
Was soll der komische Akzent???? kannst du nicht normal sprechen????
Tut mir Leid, dass dir das Video nicht zusagt. Dennoch danke fürs Zuschauen!