Making Concrete the Pareto Principle 80/20 Into Our Web Agency

 

10 SEPTEMBER 2014LOUIS-PHILIPPE DEA3 COMMENTS FROM THE CONSULTANT, AGENCY LIFE
Guerrilla Web has gone through the last year, from just one employee to six full-time people. A challenge, I tell you! In this great adventure, there are very good shots, but of course, there are also sides a little less pink …

It is in relation to these aspects that the 80/20 principle (also called the Pareto Law) is extremely interesting to apply within the agency. For those who do not know this principle, I urge you to read “The 80/20 Principle: Doing More With Less – by Richard Koch”.

Here’s how we applied it to our business reality:

1 – Post Mortem
The first step we have taken with the whole team is to take out all the projects we have worked on over the past year. The whole team, because I wanted everyone involved to improve our work processes. Also, I’m not aware of all that happens in the technical side production, hence the importance of involving everyone.

On a paper sheet (yes I’m old school like that!), We wrote the name of all the clients in the first column. In the second, the source of these, the third, if the web project with this client was profitable, and finally, in the fourth column, the reasons for this success or failure.

Here is what our sheet looks like:

 

Given that the whole team is involved, we can more easily identify the errors made by each of us, in terms of project workload, design, integration, programming, and business development, to the management of the agency.

2 – Analysis of the results
Thanks to the previous step, it is not difficult to recognize patterns with regard to 80/20 (sometimes 70/30, sometimes 90/10):

Example 1

In the agency, when we’re working on certain types of projects, we’re spending most of the time on the original bid.

If we apply the Pareto law for this problem, we note that a large number of overflows are caused by few causes in the production process. Here are some simple solutions we can apply today:

Solution 1: Focus our energies in the development of business on the types of projects of which we know more about all aspects and of which we know in advance their profitability since we have developed expertise at this level.
Solution 2: Take more time to clarify with the customer and with the production team some technical points on different functionalities of a website.
Solution 3: Support a junior more in a specific type of project.
Solution 4: Increase the price of bids for specific projects that are generally undervalued on my side.
Regarding the 80/20 principle, we have also identified that approximately 25-30% of our mandates are obtained from collaborators. These projects are mostly more profitable for the agency than the other 70 to 75% of mandates.

Concretely, we are building on this fact to guide these days, our business development in order to create new business relationships with new collaborators (project managers, editors, designers, etc.).

Notice to interested parties, contact us! 🙂

3 – Defining an action plan
It’s fine to do stocktaking and analysis, but it will not change if there is not a concrete plan to follow.

Since each of us is well aware of the problems encountered in some past projects, we define together the points on which all members of the team must remain vigilant. Ex:

Gabriel, Vincent, Jean-François and David have to pay particular attention to different aspects during the testing phase of a project (QA).
Louis-Philippe must include Jean-François on various programming points in our submissions.
All of our team members who will be involved in a project must be included in the start brief to be 100% aware of the client’s expectations.
Etc., etc.
In conclusion
The 80/20 principle can be applied everywhere. Both in terms of productivity and working environment. Try it, without moderation! For us at least, this is just the beginning …

On your side, how do you apply the Pareto law in your daily life?