On Sunday I tried to purchase a portable cooking grill at a local hardware store. The floor sample was priced incorrectly. I was looking at the higher-end model, but the sample’s mismatched price tag was for its smaller, fewer-frills sibling. Hoping the adage that “the customer is never wrong” held true in this case, I decided to push back and ask to be awarded the lower price. The salesman dug in his heels. He advised me that I would have to take it up with the manager, which I did. After I explained my quandary to him, he fell silent; I knew not why. He pulled out a calculator, and after a few minutes, he came up for air. “I believe in compromises,” he said. How about if we take a percentage off the price of the higher-priced grill–say, twenty percent?” Ah, 20%! The magic number! “Sold, Bill!” sez I, seizing upon the opportunity to make a life-long friend out of the situation. I felt like latching onto him with a bear hug, like a contestant from The Price Is Right putting the death squeeze on Bob Barker. My final price was within $10 of the cost of the cheaper, far-fewer frills grill, and we both came out looking like winners.
Researchers tell us that 20% is a significant number in some management rules of thumb. For example, that’s the average percentage of participants who “buy in” to a particular enterprise or vision. And the efforts of those 20% provide 80% of the effective results of the enterprise.
A case in point. I used to work as a consultant for non-profit organizations. As I helped them strategize how they would meet their budgets, I knew my main task was to identify and target the top 20% of the constituents–those who were most highly involved in the organization. They were already often the top financial supporters. Ironically, we would craft ways for these very active givers to help provide even more financial support. The other 80% of supporters most probably would not significantly increase their efforts, no matter how much they were encouraged, coerced, or “stick-and-carroted.” It’s a waste of energy.
This phenomenon is appropriately known as the “vital few and trivial many” principle. Participants in many enterprises are passive (that’s the 80%); while they may count in the census of those who attend or consider themselves a part of an organization, they mostly go along for the ride, contributing little “value added.”
Some folks have turned fretting into an art form. Fretting about how one person can’t change much about life’s injustices. Fretting about famous folks that get all the attention. Fretting about having so little ability to influence. Fretting about lots of people involved in a cause or an organization, so why am I needed?
In a crowd of 100 folks, I might see myself as insignificant. Against such numbers, what do I have to offer? But wait! That doesn’t factor in the 80/20 percent principle. Only about 20 of those 100 people might have any sort of significant measurable impact. If I become one of those 20, now my efforts have been quintupled! Suddenly, of the original 100 participants, I find myself among only 20 significant “players.” And that gives me the opportunity to become an important 80% contributing member. Maybe I’m the person who can offer just the right “missing piece” of effort. By choosing to be significantly involved, I have just multiplied my formerly-measly efforts by five-fold.
Let’s take it to a personal level. I’m guessing that the average individual has far fewer than 100 significant relationships. Maybe 20? Maybe 10? But if we truly care about those persons that we know casually, and we invest quality time into each other’s lives, could we eventually enter into the top influencers in one another’s lives?
And I thought that all I accomplished today was getting a good deal on a gas grill.
To read more about Pareto’s Principle, visit:
http://management.about.com/cs/generalmanagement/a/Pareto081202.htm
