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The (Really) Hard Working 20%

You have probably heard of the Pareto Principle or the 80/20 rule. In 1897, Vilfredo Pareto observed that nearly 80% of the land in Italy was owned by just 20% of the population (that is, that income follows a Pareto Distribution, which is a power law probability distribution. Learn more on this here and here). Joseph Juran, an American management consultant suggested the principle, named it after Vilfredo Pareto, and popularised it with respect to quality management issues stating that 80% of a problem is caused by 20% of the causes. The principle has since been generalised and extended to be something more like “80% of the effects are caused by 20% of the causes”.

This law of the vital few has some powerful implications. Applied to organizations, it means that 80% of the value is created by 20% of the business processes. Or that 80% of the revenue comes from 20% of the customers. Or that 80% of the work is done by 20% of the team.

Most organizations (80%?) have experienced negative effects from the COVID-19 pandemic. Temporary lockdowns, curfews, social distancing, and other health and safety measures have changed how organizations work. Understandably, many organizations are thinking about how they can transform themselves to better adapt to the situation.

As organizations observe, reflect, and react to the effects of the COVID-19 pandemic, it will be important to keep the 20% in mind, ensuring that every strategic or tactical pivot is aligned to, enables, supports, or at least does not negatively impact the really hard working 20% in and out of the organization.

By Brian

I’m Brian Gachichio. I write and advise on strategy design and execution and performance measurement and management in organizations.

My goal is to provide the innovative thinking that leads to high-impact solutions to business problems and help produce above-average results.