Accelerating Sustainability Using the 80/20 Rule

Gareth Kane

• Publisher: Routledge
• Year: 2017
• eBook ISBN: 9781351274302
• Topic: Business
• Subtopic: Etica aziendale
• Index: Business

Are your sustainability efforts making as much impact as they could be?With our collective way of life rubbing up against the natural limits of the planet, it does not take a genius to see that it is time to scrape the mud off our boots and find a shorter, smarter path towards sustainability – a way to maximize our effectiveness and inspire leaps forward in sustainability, rather than incremental steps.

The 80/20 rule says that, in many situations, a small number of inputs determine the vast majority of our desired results. If we identify these "vital few" inputs in our sustainability efforts, and focus on them, we can maximize our effectiveness and accelerate progress rapidly.

This book will help you to think about sustainability from an 80/20 perspective with practical applications for: product and service development; supply chains; materiality, indicators and quantitative analysis; waste, energy efficiency, water conservation and transport; employee engagement and sustainability strategy.

If you want to focus on what works, deliver better results, waste less time on "switch it off" stickers and ineffective "standard practice" and start making a real difference, then this book is for you!

Chapter 1
Introduction

THERE IS A BRILLIANT Dilbert cartoon strip where Dilbert tells his boss: ‘We replaced our styrofoam coffee cups with paper cups. But it’s not so clear it helps the planet.’ ‘We didn’t do it to help the planet,’ retorts pointy-haired boss. ‘We did it to look like the sort of company that cares about that sort of thing.’ Leaving the cynicism aside, the cartoon neatly parodies the tendency of sustainability professionals to focus their energies on making changes with negligible practical impact.

Sustainability is undoubtedly the single biggest challenge for the human race. Climate change, resource depletion, biodiversity loss and the buildup of persistent toxic chemicals show that we are rubbing up against the natural limits of the planet. Arguing over the right kind of coffee cup in the light of these existential threats makes fiddling while Rome burns look like a proactive game-changer by comparison.

A different threat to tackling climate change and other global challenges is green self-indulgence. Doug Tompkins, founder of North Face and Esprit recently told Guardian Sustainable Business:

We should not rush into trying to solve problems before we have truly understood the deep dynamics of the system we are seeking to transform . . . what we need is idea work, which helps build the intellectual infrastructure necessary to make deep structural changes in the economic technologies that we use to operate our societies. For ultimately, there can be no hope of ending the eco-social crisis until people abandon the arrogance of humanism and adopt an eco-centric worldview.¹

This kind of eco-waffle drives me up the wall. The climate does not care whether a kilo of carbon dioxide has been emitted while listening to whale music or watching The X Factor. It is a kilo of carbon molecules which causes a certain amount of global warming. We need to cut carbon, not achieve enlightenment. If we get more spiritually enlightened by doing so, then great, but let’s put the horse in front of the cart where it belongs.

Second, the science tells us we should act swiftly. Given the residence time of carbon in the atmosphere, and the presence of worrying tipping points in the climate system, cutting a kilo of carbon now is much more beneficial than cutting a kilo of carbon next year. Sitting in a yurt chanting or stroking our beards in the wilderness may be self-fulfilling, but it must not be confused for practical progress. We must learn by doing, be prepared to make mistakes, but it is paramount we get going.

One positive feature of the last 10 years has been the rise of what I call The Pragmatic Environmentalist. This can-do breed is free from the ideological baggage of the traditional tree-hugger. They will embrace any technology, market mechanism or technique if it will contribute to sustainability. With their championing of nuclear energy and genetic technology in particular, they can seem heretical to the hippie brigade, but if a genetically modified algae can create biodiesel out of atmospheric carbon dioxide, why would we write it off?

One of the features of these new environmentalists is their background. While some have emerged from mainstream environmentalism but have grown tired of ‘paralysis by perfectionism’, others come from engineering and even military backgrounds. These people love to be given a problem to solve and will set about that problem with gusto – without worrying about an eco-centric worldview. They just get on with it.

This book is a clarion call for all sustainability professionals to focus on what matters. It takes as its basis the 80/20 Rule, or Pareto Principle, which says that in many cases 20 percent of effort delivers 80 percent of results and, conversely, 80 percent of effort only manages to deliver 20 percent. By identifying and focusing on the ‘good’ 20 percent and stripping out the ineffective 80 percent, we can rapidly accelerate progress towards our ultimate goal of sustainability. The brutality of the 80/20 Rule can unsettle the more timid of the green-minded, but it is a key weapon of the pragmatic environmentalist.

Chapter 2
What is the Pareto Principle?

The 80/20 Rule – From peas to the Power Law

VILFREDO PARETO (1848–1923) was an Italian economist who noticed the tendency for many completely different things to be distributed very unevenly, but unevenly in a predictable way. He was studying wealth distribution in thirteenth-century England when he found that roughly 20 percent of the population owned 80 percent of the wealth. This correlated with his observation that 80 percent of the peas from his garden were found in 20 percent of pods and he noticed that this rule of thumb applied many other unrelated natural phenomena. Unfortunately, Pareto’s work and social beliefs have been conflated with fascism, rightly or wrongly, and he fell out of favour in the first half of the twentieth century.²

Pareto never mentioned the 80/20 Rule or named it after himself. It was management consultant Joseph Juran who dusted off the theory in the 1950s, named it ‘The Pareto Principle’ and started applying it to business.³ He initially described it as ‘the vital few and the trivial many’, but later changed this to ‘the vital few and the useful many’ to acknowledge the remaining 80 percent of the causes should not be totally ignored (an issue we will consider later in the chapter).

One of the earliest applications of the 80/20 Rule was in computing. IBM realised that 80 percent of processing time was spent on 20 percent of processes. They focused their efforts on making those processes more efficient which led to huge leaps forward in processor speed. Later Microsoft found that by targeting the 20 percent most reported problems, they could solve 80 percent of system crashes.⁴

The 80/20 Rule can be seen in many different arenas. In my consultancy business, Terra Infirma Ltd, 20 percent of our clients represent 79.1 percent of our income. On the Terra Infirma YouTube channel, 81 percent of views arise from 19 percent of the uploaded videos.

The mathematical basis for the 80/20 Rule is the Power Law distribution (see Figure 1). This is clearly different to the better-known ‘normal distribution’ where data are distributed around the average in a neat bell curve – which you would get if you measured, say, the heights of adults.

Figure 1. Power law and normal distributions.

One of the foremost promoters of the 80/20 Rule in business and life is Richard Koch, author of the book The 80/20 Principle.⁵ Koch proposes using the principle in two subtly different ways:

• 80/20 analysis where you use empirical evidence to identify the 20 percent of issues which deliver 80 percent of results;
• 80/20 thinking where you take a much more intuitive approach to identifying the 20 percent.

More recently, ‘life hacking’ guru Tim Ferriss has popularised the use of the 80/20 idea to set out a philosophy of getting maximum results from the least possible effort through best-selling books such as The Four Hour Work Week.⁶

Implications of the 80/20 Rule

The basic idea of the 80/20 Rule is that you will be much more effective if you put your energy into the 20 percent of activities that deliver 80 percent of the results and put less emphasis the 80 percent which deliver only 20 percent. Conversely you may want to consider why the 80 percent of your efforts deliver so little and remove the constraints.

It is important not to get too hung up on the numbers 80 and 20. Whether the distribution is 90/10 or 70/30, the same principle applies: much of life is predictably unequal. In this book I am not intending t...

Table of contents

• Cover
• Title
• Copyright
• Abstract
• About the Author
• Acknowledgments
• Contents
• 1 introduction
• 2 What is the Pareto Principle?
• 3 Using the 80/20 Rule to Deliver More Quick Wins More Quickly
• 4 Using the 80/20 Rule to Make Employee Engagement Effective
• 5 Using the 80/20 Rule in Indicators and Quantitative Analysis
• 6 Using the 80/20 Rule - Supply Chain
• 7 Using the 80/20 Rule to Make Products and Services Sustainable
• 8 80/20 and Strategy
• 9 Conclusions
• Notes and References