Coaching Tip: Making the 80/20 Principle Work for Your Clients

Originally Submitted on 12/5/2001.

The Coaching Tip

"For a very long time, the Pareto law (the 80/20 Principle) has lumbered on the economic scene like an erratic block on the landscape; an empirical law which nobody can explain." --Josef Steindl

As a coach, you're going to be coaching clients who have limited resources. Their time, energy, and effort can only go so far. Prioritizing is essential. Therefore, it's important to pay attention to the 80/20 Principle. And what is the 80/20 Principle? It’s that principle of imbalance that occurs that nobody can explain, but it sure needs to be kept in mind.

I worked for many years in the non-profit sector. I worked with an ever-shifting population of volunteers--committees, project teams, Boards and donors--so that in one month I might deal with as many as 10 of such entities, and it was the 80/20 Principle time after time. With 20 years experience, this is how I worked it (or it worked me): By ratio, I got 2 people on these entities I knew would do all the work, and then added 8 breathing bodies, only I never knew who the 2 would be! In actual groups of 5, 1 person did all the work. Without fail, 20% of my donors gave 80% of the donations. It's like the people knew the rule ...

In a recent book entitled "The 80/20 Principle," author Richard Koch gives a fascinating accounting for the principle.

Whether your client is an entrepreneur, or manages others, or owns and runs a company, or allocates resources of any sort, he or she needs to know where the results are coming from. Koch gives the scientific backup for the principle that 20% of products usually account for about 80% of dollar sales value; so do 20% of customers. That 80% of outputs results from 20% of inputs, and 80% of consequences flow from 20% of causes, and 80% of results come from 20% of effort. There is data confirming that 20% of criminals account for 80% of the value of all crime, and 20% of motorists cause 80% of the accidents. Wouldn't you agree that 20% of your clothes will be worn 80% of the time, and 20% of your carpet will get 80% of the wear?

One example Koch gives is that in 1963, IBM discovered that about 80% of a computer's time was spent executing about 20% of the operating code … and they adjusted accordingly.

The classic example for you physicists out there is the internal combustion engine, where 80% of the energy is wasted in combustion and only 20% gets to the wheels.

Keeping this principle in mind as your clients do business will help maximize their time, their employees, their talent, and their energy. Ask your client to pay close attention for a month to what is producing what and search for that 20% that's bringing the results. Then they can put their time, effort and energy there. Is it possible that 20% of the employees may be doing 80% of the work? It's more than possible, it's probable; ask any employee.

Take a look at the book if you have any doubts. "The universe is wonky," says Koch, and indeed it is! And BTW, how are you spending your time?

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