THE EXPONENT: Volume 01, Number 5

"Nothing great was ever achieved without enthusiasm." - Emerson

What do you want from Triangle?

When you're in college, you attend classes to gain knowledge. Though schools have gotten better at giving opportunities to gain practical experience and to practice your group roles - how to lead, how to follow, and even simply how to interact with others - they don't do very well. As a Triangle member, you have a school-year-long 24/7 opportunity to get practical group experience. These are the kind of skills you'll need in the professional world. Even if you don't get them 100% perfect as a college Triangle member, you'll undoubtedly have them down better than your non-Triangle counterparts. This is the kind of thing that gives you a leg up in getting work and moving up once there.

You also get a chance to hone your skills for playing the extreme sport called life. You'll notice, I'm sure, that most extreme sports are played by yourself. People play such sports often for the sheer exhilaration of doing well in spite of the danger. Life's the same - the best way to get the real feeling of exhilaration from it, you need to know you're being successful because you've applied your skills and abilities to their fullest. Fortunately, Triangle also gives you more chance to make your life skills - enhanced classroom knowledge, knowledge of non-classroom things, improved ability to learn, better ability to deal with others, and more - better than they probably would be without Triangle. Once again, these are the kinds of things that help you make yourself more successful in your career and in life.

Every student has the opportunity to have fun and to make friends. He's thrown into a very large pool of people right off, though, and there's not much of a support system and the large scale of the group with which he interacts throughout his time in school makes forging long-term, especially life-long, friendships very difficult. Being a Triangle, on the other hand, gives you an opportunity to meet a diverse group of people who share a close common goal, whose number is more manageable, and whose membership stays relatively constant over the years you're in school.

As an alumnus, participation can give you the same chances, though perhaps in a different way. You also get a chance to feel good that you've helped others succeed.

Even with those opportunities, the outcomes don't just fall off the tree and hit you on the head. YOU HAVE TO PARTICIPATE TO GET THEIR BENEFITS.

If all you want from Triangle is a place to party, while Triangles know how to have a good time, there's very little you'll get from the Fraternity. If all you want is a place to hang your hat, why bother? If all your membership means is a cool magazine four times each year, what's the point? The kinds of members who consistently seek only these kinds of things really ought to consider moving on.

So, what do you want from Triangle?

Contents

• Pareto, Pareto Everywhere--And Only 80% Of The Time Can I Find a Drink
• Put Your Life Into the Hands of Someone Important
• Time To Get Ready For Summer

Pareto, Pareto Everywhere--And Only 80% Of The Time Can I Find a Drink

From "The 80/20 Principle: The Secret of Achieving More with Less" By Koch, Richard (Doubleday)
Submitted by Merle Newlon lou73

"For a very long time, the Pareto law [the 80/20 Principle] has lumbered the economic scene like an erratic block on the landscape; an empirical law which nobody can explain." -Josef Steindl

The 80/20 Principle can and should be used by every intelligent person in their daily life, by every organization, and by every social grouping and form of society. It can help individuals and groups achieve much more, with much less effort. The 80/20 Principle can raise personal effectiveness and happiness. It can multiply the profitability of corporations and the effectiveness of any organization. It even holds the key to raising the quality and quantity of public services while cutting their cost.

The 80/20 Principle asserts that a minority of causes, inputs, or effort usually lead to a majority of the results, outputs, or rewards. Taken literally, this means that, for example, 80 percent of what you achieve in your job comes from 20 percent of the time spent. Thus for all practical purposes, four-fifths of the effort--a dominant part of it--is largely irrelevant. This is contrary to what people normally expect.

So the 80/20 Principle states that there is an in-built imbalance between causes and results, inputs and outputs, and effort and reward. A good benchmark for this imbalance is provided by the 80/20 relationship. A typical pattern will show that 80 percent of outputs result from 20 percent of inputs; that 80 percent of consequences flow from 20 percent of causes; or that 80 percent of results come from 20 percent of effort.

In business, many examples of the 80/20 Principle have been validated. Twenty percent of products usually account for about 80 percent of dollar sales value; so do 20 percent of customers. Twenty percent of products or customers usually also account for about 80 percent of an organization's profits.

In society, 20 percent of criminals account for 80 percent of the value of all crime. Twenty percent of motorists cause 80 percent of accidents. Twenty percent of those who marry comprise 80 percent of the divorce statistics (those who consistently remarry and redivorce distort the statistics and give a lopsidedly pessimistic impression of the extent of marital fidelity). Twenty percent of children attain 80 percent of educational qualifications available.

In the home, 20 percent of your carpets are likely to get 80 percent of the wear. Twenty percent of your clothes will be worn 80 percent of the time. And if you have an intruder alarm, 80 percent of the false alarms will be set off by 20 percent of the possible causes.

The internal combustion engine is a great tribute to the 80/20 Principle. Eighty percent of the energy is wasted in combustion and only 20 percent gets to the wheels; this 20 percent of the input generates 100 percent of the output!

The pattern underlying the 80/20 Principle was discovered in 1897, about 100 years ago, by Italian economist Vilfredo Pareto (1848-1923). His discovery has since been called many names, including the Pareto Principle, the Pareto Law, the 80/20 Rule, the Principle of Least Effort, and the Principle of Imbalance; throughout this book we will call it the 80/20 Principle. By a subterranean process of influence on many important achievers, especially business people, computer enthusiasts and quality engineers, the 80/20 Principle has helped to shape the modern world. Yet it has remained one of the great secrets of our time--and even the select band of cognoscenti who know and use the 80/20 Principle only exploit a tiny proportion of its power.

So what did Vilfredo Pareto discover? He happened to be looking at patterns of wealth and income in nineteenth-century England. He found that most income and wealth went to a minority of the people in his samples. Perhaps there was nothing very surprising in this. But he also discovered two other facts that he thought highly significant. One was that there was a consistent mathematical relationship between the proportion of people (as a percentage of the total relevant population) and the amount of income or wealth that this group enjoyed. To simplify, if 20 percent of the population enjoyed 80 percent of the wealth, then you could reliably predict that 10 percent would have, say, 65 percent of the wealth, and 5 percent would have 50 percent. The key point is not the percentages, but the fact that the distribution of wealth across the population was predictably unbalanced.

Pareto's other finding, one that really excited him, was that this pattern of imbalance was repeated consistently whenever he looked at data referring to different time periods or different countries. Whether he looked at England in earlier times, or whatever data were available from other countries in his own time or earlier, he found the same pattern repeating itself, over and over again, with mathematical precision.

Was this a freak coincidence, or something that had great importance for economics and society? Would it work if applied to sets of data relating to things other than wealth or income? Pareto was a terrific innovator, because before him no one had looked at two related sets of data--in this case, the distribution of incomes or wealth, compared to the number of income earners or property owners--and compared percentages between the two sets of data. (Nowadays this method is commonplace and has led to major breakthroughs in business and economics.) While a few economists, especially in the US, realized its importance, it was not until after the Second World War that two parallel yet completely different pioneers began to make waves with the 80/20 Principle.

One of these pioneers was the Harvard professor of philology, George K. Zipf. In 1949 Zipf discovered the "Principle of Least Effort," which was actually a rediscovery and elaboration of Pareto's principle. Zipf's principle said that resources (people, goods, time, skills, or anything else that is productive) tended to arrange themselves so as to minimize work, so that approximately 20-30 per cent of any resource accounted for 70-80 per cent of the activity related to that resource.

The other pioneer of the 80/20 Principle was the great quality guru, Romanian-born U.S. engineer Joseph Moses Juran (born 1904), the man behind the Quality Revolution of 1950-90 (AND an Industrial Engineer who graduated from the University of Minnesota in 1924, I might humbly add - Ed.). He made what he alternately called the "Pareto Principle" and the "Rule of the Vital Few" virtually synonymous with the search for high product quality.

His great idea was to use the 80/20 Principle, together with other statistical methods, to root out quality faults and improve the reliability and value of industrial and consumer goods. Juran's path-breaking Quality Control Handbook was first published in 1951 and extolled the 80/20 Principle in very broad terms: The economist Pareto found that wealth was nonuniformly distributed in the same way [as Juran's observations about quality losses]. Many other instances can be found--the distribution of crime amongst criminals, the distribution of accidents among hazardous processes, etc. Pareto's principle of unequal distribution applied to distribution of wealth and to distribution of quality losses.

No major U.S. industrialist was interested in Juran's theories. In 1953 he was invited to Japan to lecture, and met a receptive audience. He stayed on to work with several Japanese corporations, transforming the value and quality of their consumer goods. It was only once the Japanese threat to U.S. industry had become apparent, after 1970, that Juran was taken seriously in the West. He moved back to do for U.S. industry what he had done for the Japanese. The 80/20 Principle was at the heart of this global quality revolution.

IBM was one of the earliest and most successful corporations to spot and use the 80/20 Principle, which helps to explain why most computer systems specialists trained in the 1960s and 1970s are familiar with the idea.

In 1963, IBM discovered that about 80 percent of a computer's time is spent executing about 20 percent of the operating code. The company immediately rewrote its operating software to make the most-used 20 percent very accessible and user friendly, thus making IBM computers more efficient and faster than competitors' machines for the majority of applications.

Those who developed the personal computer and its software in the next generation, such as Apple, Lotus, and Microsoft, applied the 80/20 Principle with even more gusto to make their machines cheaper and easier to use for a new generation of customers, including the now celebrated "dummies" who would previously have given computers a very wide berth.

The reason that the 80/20 Principle is so valuable is that it is counter-intuitive. We tend to expect that all causes will have roughly the same significance. That all customers are equally valuable. That every bit of business, every product, and every dollar of sales revenue is as good as any other. That all employees in a particular category have roughly equivalent value. That each day or week or year we spend has the same significance. That all our friends have roughly equal value to us. That all inquiries or phone calls should be treated in the same way. That one university is as good as another. That all problems have a large number of causes, so that it is not worth isolating a few key causes. That all opportunities are of roughly equal value, so that we treat them all equally.

We tend to assume that 50 percent of causes or inputs will account for 50 percent of results or outputs. There seems to be a natural, almost democratic, expectation that causes and results are generally equally balanced. And, of course, sometimes they are. But this "50/50 fallacy" is one of the most inaccurate and harmful, as well as the most deeply rooted, of our mental maps. The 80/20 Principle asserts that when two sets of data, relating to causes and results, can be examined and analyzed, the most likely result is that there will be a pattern of imbalance. The imbalance may be 65/35, 70/30, 75/25, 80/20, 95/5, or 99.9/0.1, or any set of numbers in between. However, the two numbers in the comparison don't have to add up to 100.

The 80/20 Principle also asserts that when we know the true relationship, we are likely to be surprised at how unbalanced it is. Whatever the actual level of imbalance, it is likely to exceed our prior estimate. Executives may suspect that some customers and some products are more profitable than others, but when the extent of the difference is proved, they are likely to be surprised and sometimes dumbfounded. Teachers may know that the majority of their disciplinary troubles or most truancy arises from a minority of pupils, but if records are analyzed the extent of the imbalance will probably be larger than expected. We may feel that some of our time is more valuable than the rest, but if we measure inputs and outputs the disparity can still stun us.

Why should you care about the 80/20 Principle? Whether you realize it or not, the principle applies to your life, to your social world, and to the place where you work. Understanding the 80/20 Principle gives you great insight into what is really happening in the world around you.

Our daily lives can be greatly improved by using the 80/20 Principle. Each individual can be more effective and happier. Each profit-seeking corporation can become very much more profitable. Each nonprofit organization can also deliver much more useful outputs. Every government can ensure that its citizens benefit much more from its existence. For everyone and every institution, it is possible to obtain much more that is of value and avoid what has negative value, with much less input of effort, expense, or investment.

At the heart of this progress is a process of substitution. Resources that have weak effects in any particular use are not used, or are used sparingly. Resources that have powerful effects are used as much as possible. Every resource is ideally used where it has the greatest value. Wherever possible, weak resources are developed so that they can mimic the behavior of the stronger resources.

Probability theory tells us that it is virtually impossible for all the applications of the 80/20 Principle to occur randomly, as a freak of chance. We can only explain the principle by positing some deeper meaning or cause that lurks behind it.

Pareto himself grappled with this issue, trying to apply a consistent methodology to the study of society. He searched for "theories that picture facts of experience and observation," for regular patterns, social laws, or "uniformities" that explain the behavior of individuals and society. Pareto's sociology failed to find a persuasive key. He died long before the emergence of chaos theory, which has great parallels with the 80/20 Principle and helps to explain it.

The last third of the twentieth century has seen a revolution in the way that scientists think about the universe, overturning the prevailing wisdom of the past 350 years. That prevailing wisdom was a machine-based and rational view, which itself was a great advance on the mystical and random view of the world held in the Middle Ages. The machine-based view converted God from being an irrational and unpredictable force into a more user-friendly clockmaker-engineer.

The view of the world held from the seventeenth century and still prevalent today, except in advanced scientific circles, was immensely comforting and useful. All phenomena were reduced to regular, predictable, linear relationships. For example, a causes b, b causes c, and a+c cause d. This worldview enabled any individual part of the universe--the operation of the human heart, for example, or of any individual market--to be analyzed separately, because the whole was the sum of the parts and vice versa.

But in the second half of the twentieth century it seems much more accurate to view the world as an evolving organism where the whole system is more than the sum of its parts, and where relationships between the parts are nonlinear. Causes are difficult to pin down, there are complex interdependencies between causes, and causes and effects are blurred. The snag with linear thinking is that it doesn't always work, it is an oversimplification of reality. Equilibrium is illusory or fleeting. The universe is wonky.

Yet chaos theory, despite its name, does not say that everything is a hopeless and incomprehensible mess. Rather, there is a self-organizing logic lurking behind the disorder, a predictable nonlinearity--something which economist Paul Krugman has called "spooky," "eerie," and "terrifyingly exact." The logic is more difficult to describe than to detect and is not totally dissimilar to the recurrence of a theme in a piece of music. Certain characteristic patterns recur, but with infinite and unpredictable variety.

I believe that the 80/20 Principle is enormously hopeful. Certainly, the principle brings home what may be evident anyway: that there is a tragic amount of waste everywhere, in the way that nature operates, in business, in society, and in our own lives. If the typical pattern is for 80 percent of results to come from 20 percent of inputs, it is necessarily typical too that 80 percent, the great majority, of inputs are having only a marginal--20 percent--impact.

The paradox is that such waste can be wonderful news, if we can use the 80/20 Principle creatively, not just to identify and castigate low productivity but to do something positive about it. There is enormous scope for improvement, by rearranging and redirecting both nature and our own lives. Improving on nature, refusing to accept the status quo, is the route of all progress: evolutionary, scientific, social, and personal. George Bernard Shaw put it well: "The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man."

The implication of the 80/20 Principle is that output can be not just increased but multiplied, if we can make the low-productivity inputs nearly as productive as the high-productivity inputs. Successful experiments with the 80/20 Principle in the business arena suggest that, with creativity and determination, this leap in value can usually be made.

There are two routes to achieving this. One is to reallocate the resources from unproductive to productive uses, the secret of all entrepreneurs down the ages. Find a round hole for a round peg, a square hole for a square peg, and a perfect fit for any shape in between. Experience suggests that every resource has its ideal arena, where the resource can be tens or hundreds of times more effective than in most other arenas.

The other route to progress--the method of scientists, doctors, preachers, computer systems designers, educationalists, and trainers--is to find ways to make the unproductive resources more effective, even in their existing applications; to make the weak resources behave as though they were their more productive cousins; to mimic, if necessary by intricate rote-learning procedures, the highly productive resources.

The few things that work fantastically well should be identified, cultivated, nurtured, and multiplied. At the same time, the waste-the majority of things that will always prove to be of low value to man and beast--should be abandoned or severely cut back.

As I have been writing this book and observed thousands of examples of the 80/20 Principle, I have had my faith reinforced: faith in progress, in great leaps forward, and in mankind's ability, individually and collectively, to improve the hand that nature has dealt. Joseph Ford comments: "God plays dice with the universe. But they're loaded dice. And the main objective is to find out by what rules they were loaded and how we can use them for our own ends."

The 80/20 Principle can help us achieve precisely that.

Put Your Life Into the Hands of Someone Important

Tim Eiler minn87

Just a few days ago, I was fortunate enough to attend graduation at my alma mater. I was honored to have been invited by one of the new alumni of my chapter to celebrate with him his move into the wider part of his life. I had no idea that I had made enough of an impact on him to share that time with him. Thanks, Nick. My feeling of honor is probably more than you anticipated.

The theme throughout the commencement was clear, though I'm certain its appearance was spontaneous rather than orchestrated. That theme was that those who achieve things in life are those who take clear, deliberate, reasonable, and true accountability for themselves and responsibility for their own actions, life, and success.

This theme was as true 1,000 years ago as it is today. Yet strangely I was recently asked by a university professor if I had encountered in my experience, nationally in the Fraternity and with new grads whom I'd encountered in the workforce, the same problem he and others like him have seen - young folks who seem to look to have answers handed to them, young men who don't appear to take charge of their own paths. Of course he and I both recognize that our worldview here is impacted quite a bit by the kind of views that can be summed up in "the world's going to hell in a handbasket" comments. Even given our "maturity-colored" glasses, though, both of us agree that we wish that more young men would somehow pull themselves up by their bootstraps and out of what looks like it must be a fog of some type. The "race" called life goes to the swift and strong. Each man is responsible for reaching for his own brass ring for it is exceedingly rare that one will be handed to him or will fall in his lap.

My message then is for each member of Triangle to earn the right to look at himself and see someone in whom he can be proud.

That doesn't come easily when he looks through the lens which all Triangles know so well. It takes a desire to be better than you are, the guts to stretch to try new methods, and the fortitude to sometimes deal with being outside the regular herd.

The question is whether you're that kind of man. Are you ready to put your life into your own hands? To choose any other path may mean that mere chance, or worse still, others, will be your superior. Will you make the decision to take accountability for improving yourself and your circumstances?

Time To Get Ready For Summer

Tim Eiler minn87

Don't forget to prepare your chapter's physical plant properly for the upcoming summer season. See this article for more details.

Hope you enjoyed this issue!!! If you have questions, feel free to email the editor ( This e-mail address is being protected from spam bots, you need JavaScript enabled to view it ).

Tim Eiler
Exponent Editor

Pursue Excellence Relentlessly

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Sets and Demonstrates High Standards

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