Pareto Charts allow you to focus your energy in the right spot. I’m sure you’ve heard of the 80/20 rule. Whereby 80% of the issues are created by 20% of the causes. The Pareto rule allows us to focus on the important things first.

There’s a very simple data analytical tool called a Pareto Chart, which is easily created through MS EXCEL.

When I introduce and coach Daily Visual Management boards & routines, I love to direct users to this Pareto tool.

The DVM board below shows the top row of metrics being lagging indicators (already occurred), then the 2nd row below are contributors to this lagging metric, shown in order of influence. The 3rd row in this case is the Pareto of the 1st bar in the 1st chart (sometimes called “son of Pareto”).

By focusing on the key contributor (the largest bar in the Pareto Chart) and resolving this, then the overall metric should improve. Then move on to focusing on the 2nd largest bar and so on. See a link in the comments to an easy way to create a Pareto Chart in MS EXCEL. This is such a simple but powerful tool, that I recommend should be part of any data analysis.

LinkedIn post by Paul Deane

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