Back in the 90’s, my organization brought in national and international thought leaders to meet with the members of my Business Round Table organization.  As I listened to the latest ideas on business concepts, I watched the 50 CEO’s in the audience.  They got it.  They understood how those fresh ideas could affect their decision making now and in the future.

One of those ideas that percolated now and then among those thought leaders was the 80/20 Rule, also known as Pareto’s Principle.

A little background on the now famous, 80/20 Rule may be necessary.  The 80/20 Rule goes back to 1906, when Italian economist, Wilfredo Pareto, accidentally stumbled on the fact that most of the wealth in Italy was in the hands of a small number of citizens.  He recognized the phenomena that 80% of the output or results come from 20% of activities.  

During the late 80’s and 90’s, the 80/20 Rule resurfaced when production was analyzed to determine what were the critical inputs that could affect the greatest output.   Again, and again, a few factors were found to have the greatest impact. 

For example, studies have shown that one top achiever can deliver as much productivity as up to four average employees. (https://www.insperity.com/blog/high-performing-employees/) Learning how to spot, recruit, manage and retain high performing employees is time well spent, rather than being distracted with the lower performing 80%.  Focusing on the highly motivated employees will potentially inspire the employees performing at a lower level. Limiting, ignoring, or leaning on top performers for the worst jobs may encourage them to leave thereby severely reducing productivity. Over time, track your results as you change your focus.

When the thinking behind the 80/20 Rule resurfaced, it began to be applied to every industry.  Twenty percent (20%) of a company’s products account for 80% of the sales.  Twenty percent (20%) of sales professionals account for 80% of all sales.  Twenty percent (20%) of team members complete 80% of the work.  Eighty percent (80%) of problems originate from 20% of projects. Twenty percent (20%) of one’s activities account for 80% of one’s success.  Companies began to identify those critical success factors and position their efforts in support of the vital factors.

The bottom line is the 80/20 Rule is not only relevant today but should be used to improve efficiency and the effectiveness of many parts of our businesses and our lives.  We can identify where our resources should go.  The limited resources of our time and money can only be applied to a limited number of projects.  Identify what portion of your efforts contribute to success and focus your efforts to achieve greater success in business and in life.

Interested in improving your company’s productivity? Contact Antonette at Blue Gill Consulting.