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Applying the Pareto Principle to Product Development

(This post is based on the video, “Pareto Principle” in the Design Defined: Design Principles Explained series.)

It can be difficult to narrow in on your team’s focus at the beginning of a product development project, especially when the pressure of deadlines and budget is already bearing down.

In these instances, the Pareto Principle can be a useful framework for prioritization.

If you’ve ever heard of the 80-20 rule, you’re already familiar with the Pareto Principle, which states that for many situations, roughly 80 percent of results will come from 20 percent of causes.

If you’ve ever heard of the 80-20 rule, you’re already familiar with the Pareto Principle.

In product design, this translates to a few of a product’s features driving most of its impact.

Spotting Pareto Principle in the Wild

The Pareto Principle is named for Vilfredo Pareto, an economist who noted in 1895 that roughly 80% of the land in Italy was owned by 20% of the population. Dr. Joseph Juran, a pioneer in quality management, later applied Pareto’s principle to quality issues. Juran coined a related term, “the vital few,” in the mid-1900s.

The law of the vital few states that a “vital few” causes or inputs drive most outputs. Put another way: A relatively small number of factors will have a relatively significant impact.

Once you know about the Pareto Principle, you’ll see it in all facets of life:

  • In sports, you might find that 20 percent of the team members are the ones scoring 80 percent of the points.
  • In fundraising, 80 percent of the funds might come from only 20 percent of the donors.
  • In business, 80 percent of profits might come from 20 percent of your efforts.
  • In digital marketing, 20 percent of a website’s content might drive 80 percent of its traffic.

In truth, this only works out to 80-20 in certain distributions, but it’s a helpful way to think about problems.

The Pareto Principle and Product Development

You can think of the Pareto Principle and the “vital few” like a giant iceberg. Only 20 percent of the iceberg shows above the surface of the water, but it makes 80 percent of the visual impact.

We can see this at play in product development, where a “vital few” of a product’s features often drive most of its impact. For instance, 20 percent of the features might get 80 percent of customers’ attention.

Using the 80-20 Rule to Guide Product Development

The Pareto Principle is a great tool for project teams when they’re trying to decide where to focus their energy and efforts. Teams can use the Pareto Principle to determine where to start, and the principle can help allocate resources like time and funding.

Teams can use the Pareto Principle to determine where to start, and the principle can help allocate resources like time and funding.

The hardest part is deciding which 20 percent of your product’s features are the vital few. It’s important to make every effort to answer that question early, and to use your answer to guide you throughout product development.

Determine Your Product’s Vital Few

The vital few will look different for every product, but in my experience the same few things end up being very important.

These four considerations will help determine your product’s vital few:

1. User Needs

This sounds obvious, but if you somehow miss — or misunderstand — a user need, you might solve for the wrong problem and end up wasting effort on a feature (or product) that misses the mark. Ask yourselves, “What does this product absolutely have to do?” There are usually just a few key functions a product needs to perform.

Ask yourselves, “What does this product absolutely have to do?” There are usually just a few key functions a product needs to perform.

Another way to think about these “vital few” features is in terms of a Minimum Viable Product (MVP). What must this product be able to do at a bare minimum? This doesn’t mean other users or features don’t matter, but determining which features will drive the essential functions will help focus your team along the development path.

One example I’ve given before, when discussing how to write good product requirements, is a connected toothbrush. What are its primary requirements? It needs to be able to brush teeth and, because it’s connected, it needs to communicate. These features might be broken into smaller ones: have bristles, weigh less than xx grams, transmit one or two pieces of data. These are your vital few.

2. Product Lifecycle

It’s important to consider your product’s entire lifecycle. How will it be manufactured, shipped, and serviced? If you’re designing medical lab equipment or a large-scale industrial product that needs to be serviced regularly, features that increase service efficiency will be among your vital few.

It helps to think of your product as a character in a movie. What other characters will it encounter? Who will need to interact with it, and how?

As for your product’s use, it helps to think of it as a character in a movie. What other characters will it encounter? Who will need to interact with it, and how? A healthcare product meant to be used in a living room by a grandparent who struggles with arthritis, vision, or hearing will have a different “vital few” than if it’s going to be used in a hospital by trained staff, or intermittently by a school nurse.

You’ll also want to think about design for misuse. If you’re working on a medical device, your user research colleagues may have conducted a Root Cause Analysis to identify problems that increase the likelihood of user error.

3. Stakeholders

On first consideration stakeholders might seem minor compared to all future users, but they can have a major impact on your success.

Your service team might find it prohibitive to require field technicians to carry a special tool to service the product. You’ll save everyone a lot of frustration (or worse) if you design your product to be serviceable with the tools they already carry.

Missing one of these “vital voices” could result in costly, schedule-extending changes late in the design.

Your manufacturing team might have a space allocated for assembly and be planning to re-use automated assembly tools to handle parts. If those tools depend on gripping a certain size or shape of feature, your project will be better off if you can design it that way from the beginning.

Your regulatory team might plan to sterilize the product. If you have components that can’t withstand that sterilization process, you’ll need to plan accordingly. Perhaps you’ll design subassemblies that can be sterilized separately before final assembly.

If you miss any one of these “vital voices,” you could be forced to make costly, schedule-extending changes late in the design.

4. Risk

Sometimes the vital few are risk-related. These might be risks like safety hazards from misuse as noted above, or it might be project risks like developing a technology.

Be brave and ask, “What’s the worst that can happen?” It’s better to identify and mitigate the biggest risks early.

If you’re working on a new technology that is unproven, ask your team: Can we execute the product at the desired size, price, and durability? Your team should devote the bulk of your early efforts to knocking down those vital risks.

Be brave and ask, “What’s the worst that can happen?” It’s better to identify and mitigate the biggest risks early. Otherwise they could end up stopping your project in its tracks, or worse, causing someone harm.

Apply the Pareto Principle

What features are going to guarantee the function and usefulness of your product? Those are your vital few and should get most of your team’s attention.

Remember to figure this out early in the product development process. It’s much more costly to fix things in the middle of prototyping than it is in the initial design phase, or in production rather than prototyping.

Imagine that 20% of the way through your project, you’ll have made critical decisions about 80% of the design.

The decisions you and you project team make early on will have a large impact on the rest of the project. Imagine that 20% of the way through your project, you’ll have made critical decisions about 80% of the design. Thinking that way helps me focus on getting the really important decisions made correctly so they don’t come back to bite the team later.

Keep the Pareto Principle in mind to keep your team out of the weeds and focused on the stuff that matters most.

Download our Design Defined ebooks to learn about more product design principles!