I believe many of us heard about the Pareto law or also well known as 80-20 principle. The law was resulted of Parato’s observation on how 80% of the land in
Following how the law has been understood. (Excerpt from http://home.alltel.net/mikeric/Misc/Pareto.htm)
Applied to Meetings: 80% of decisions come from 20% of meeting time.
Applied to Managerial Headaches: Roughly 80% of your managerial problems and headaches are caused by just 20%of your problems.
Applied to product defects: Roughly 20% of the input errors typically cause the lion's share of defects.
Applied to Business Units: Roughly 20% of a company's business units will produce 80% of the annual revenue.
The list can go on and on….
I neither fancy nor against this law. To me, it not so important about the law, but the more important is when we see many people understood it destructively. As a result, they are lack of drive for action being reason they are only working 20% and able to produce 80% of results. There is no work hard in their vocabulary.
For example, many people have so many great ideas. In the other word, ideas do not really a matter to them. Every time you speak to these types of person, you would believe they are great people. But if you go deeper, seeing their achievement, you would realize they are nothing more than “talk only”. Their result is much lesser compared to what they should attain from their “great ideas”
Why?
From my observations, these kinds of people can’t go through their first hurdle. They lack of ACTION! For example, if they have 100 ideas they only execute the most 20 of them. They don’t realize out of 20 ideas they implement, only 20% or less have a chance to succeed. Their basic principle is - do less and get more!
What would you believe?
1 comment:
Pareto Law also referred to as Pareto Principle, I believe holds true in many situation.
In my opinion, the principle is actually a principle segregating between the below average and average with the exceptional and excellent.
In any situation where people are involve, we can always segregate the exceptional and excellent from the average and below average.
In a group of employees, there's always those members whose performance are lacking and those who performs much more than just what is expected of his job function. Also those whose performance are just average.
Most of them will fall under the third category, average. That's why they are termed as average, because they forms the biggest group. Add this average group with the below average, they will form 80% of the total numbers in the group.
As far as house ownership is concern, the average own one house each, the below average do not own any house and the exceptional owns more than one house each.
I an organisation where productivity can be accurately measured, Pareto Principle can be proven. A good example is a sales organisation. What the organisation sells is not particularly of interest. How much and who sells is what matters.
The exceptional, individually sells much more than the average. Cumulatively, 80% of total sales would be from sales made by 20% of the salesperson, which forms the exceptional.
An entrepreneur, managing a sales team should acknowledge this phenomenon and act accordingly. More resources, time, effort, money should be allocated to take care of the exceptional. Allocating same amount of resources for everyone would be a mistake as the exceptional will be deprived of attention while the average and the below average would received too much attention.
From the managers point of view, attention given to the average and below average would be futile and bear minimum result. Trying to give the best to everybody would spread resources too thin which would reduce the value of each unit of resources.
Post a Comment