The 80/20 Approach to Creating a Sustainable Business

8020Green provides sustainability consultant and advisory services using 80/20 analysis and 80/20 thinking to providers of sustainable energy products and services. 

The 80/20 rule, also known as the Pareto principle, says that reward and effort are out of balance. 20% of effort produces 80% of results, and vice versa – 80% of effort may only produce 20% of the results.

The 80/20 Approach to Creating a Sustainable Business

8020 identifies what’s important and what is trivial

8020 analysis

8020 analysis is an analytical approach that uses quantitative data to link cause to effect, and of identifying the “important few” from the “trivial many”. At a very basic level such analysis would identify which 20% of your sustainability efforts are generating 80% of the environmental benefit, and also identify those areas of focus that suck up resources but are providing little  environmental benefit. More advanced analysis will enable you to identify how to multiply the 80/20 rule, and go beyond incremental improvements to achieve step improvements in performance or outcomes.

8020 thinking

8020 thinking is a somewhat intuitive process of looking behind the data to establish the causes behind this, enabling step improvements. For example this could be identifying the motivators of the managers in your company whose decisions have the greatest environmental impact and how those motivations have arisen, to help you better align your sustainability program to provide huge reductions in your environmental impact.

Examples of results achieved when the 80/20 principle is applied to sustainability consulting

A local government had asked me to conduct energy audits of its smaller buildings, believing opportunities at the larger buildings had been exhausted. 8020 analysis showed that there was still better opportunity in the larger buildings. By retaining a focus on its larger buildings the council was able to achieve much more than it would have otherwise. A 42% carbon reduction was achieved in one of the largest buildings, saving more than whole carbon footprint of ten of the smaller buildings.

A water authority was concerned about rising energy costs and wanted to improve the performance of its pumps. Rather than focus on just the pumps, I used 8020 thinking to come up with an alternative way of supplying water at one of the larger pumping systems. When implemented pump energy consumption was reduced by around 80%.

A government was looking at new policy options to drive energy efficiency. I used 8020 analysis and thinking showed that a focus on better enforcement of existing regulation would provide substantial benefits as well, and without the need for a much larger budget.

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The 80 / 20 rule – or Pareto’s Principle – says that reward and effort are out of balance, with 20% of effort producing 80% of results, or 80% of effort producing just a 20% result. The challenge is in figuring out what’s really important – and identifying those things that are not.

That’s where access to expert knowledge and experience can make the difference between expending 80% effort or creating an 80% impact. If you have an opportunity to act on reducing emissions, I invite you to reach out for a conversation and we can explore together how to apply 8020 analysis and thinking to ensure you maximize results.

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