You probably heard about the Pareto's principle or the "80/20" rule before. The rule that states that 80% of your results, come from 20% of your efforts.
If you're like me at all, you realize.. you don't want 80% results... you want 100!
At face value, this rule might sound confusing. Who wants 80% of something? Would you want your team giving you 20% effort, and calling it "good enough"? That's not what this is!
The big idea is that you can get outsized returns on certain things... 20% of the input, producing 80% of the output!
Here's why looking reframing the 80/20 rule can actually be a useful tool!
Vilfredo Pareto was an Italian economist and sociologist, from the mid 1800-early 1900s. He was basically a really smart dude who was onto something, well before any of us had a clue... or was even born.
If you want to read more up him, here's a cool biography.
Basically the "Pareto Principle" started off explaining income distribution on a larger scale. It stated that 80% of the wealth was held by 20% of the population.
Well, on a macro scale... 80% of the output (wealth), is obtained through 20% of the input (population). This applies on a smaller scale as much as it might on a larger scale.
Examples are:
80% of your stress might be coming from 20% of your coworkers, or customers.
80% of your profits might come from 20% of your customer base.
80% of your sales might come from 20% of your sales reps.
80% of your productivity may come from 20% of your employees.
It's important to understand that the 80/20 rule is not a hard and fast ratio... it basically means that the majority of the output comes from 20% of the input and it is usually not 1:1.
Just because it is not exactly 80% output, or 20% input does not mean it is not necessarily useful in your thinking.
Our production team handles the day to day production of our roofing projects. This is probably the highest stress team in the company. They deal with the last minute call ins, the rain out days, and scheduling dozens of projects per week.
This can come with a lot of unforeseen circumstances, and chaos. Especially when the ability to perform your roof, relies on sunny weather... on a tropical island like Oahu.
Recently, they've been dealing with what seemed like an abnormal amount of stress. The production manager, who happens to be my brother has two new team members. They are very eager, and good members of the team... but do not yet have the experience needed to abate every problem that comes their way.
I've been spending each morning answering their questions and discussing principles with them. The Pareto Principle was one that we had recently discussed.
I asked them how many customers they schedule per week. They answered "on average 15".
I then asked them how many customers would you say pose you a bit of a challenge. They answered "2 or 3".
This shocked me, because in this case it was actually just about 20%. That is when I explained to them the concept of Pareto's Principle!
80% of their perceived stress was literally coming from approximately 20% of their "harder to please" customers.
This helped reframe their thoughts in that not that every customer is a challenge, most of what they are doing was working well! They were on the right track, but it's that final 20% of the efforts and attention to detail, that will get rid of the stress!
Basically, 80% is a failing grade because the other 20% is what will cause you the bulk of the stress!
I asked them... what's the lowest hanging fruit? Do those first.
What are the inputs that will give you the most disproportionately larger outputs?
Finding the lowest hanging fruit to tackle, the things that will make the biggest differences up front was a good first step for the team.
Them knowing that 80% of the noticeable result will come from identifying and taking care of those 20% of customers, was a starting point to helping relieve them of the stress they were dealing with.
This then opened up them up to a freer more productive day! Later on that day... they had talked about how the principle had helped them in figuring out what things to prioritize and focus on.
If 2 or 3 of the customers needed extra attention, and 80% of their stress came from those two or three... then all of a sudden there was a clearer path to improving what they were doing!
Later on that day, I got some input from Braedan, my brother, who manages them and he... actually had good things to say about the situation!
If anyone knows him, they'd know that's a big win.
It made me happy knowing that one small principle could help make such a big improvement to our company's service, and employee's stress levels.
The 80/20 rule has so many applications. The big idea of this principle... is that not all inputs are created equally. There will be inputs that produce disproportionate outputs.
If we have a finite amount of resources, whether if be time, money, human energy, etc... we should find the inputs that will produce the largest outputs and treat them accordingly. Regardless of whether this output is good or bad, we know where to focus our resources to either secure or abate it.
I utilize this principle when I find myself overwhelmed or drowning in things to do. Finding the things that will produce the greatest gain or loss at any given point, and doing those first... allow me to prioritize better.
Granted, I know that the remaining 80% of tasks eventually need to be done... identifying the ones that will make the largest different up front, helps me to "create the space" to deal with the rest.
It is one framework that I like to use, introduced to our team, and wanted to share!