Deeper Dive - The Pareto Principle in Action - August 30, 2022
80% of our problems come from 20% of the sources
I was recently asked of all the things I have learned that helped me in running a nonprofit organization, which was the one I rely on the most? Which idea has been the most insightful. Without a doubt, the best concept I have learned was the Pareto Principle.
Vilfredo Pareto was an Italian jack-of-all trades that lived from 1848 to 1932. He was an engineer, an economist, a philosopher and even dabbled in political science. For all of that, he’s probably most well known for his “Pareto Principle”. Roughly, the principle states that 80% of any output, comes from 20% of the participants.
The cool thing about the rule is that you can apply it to almost anything. Think about the 25 players on a baseball team. Roughly half the hits the entire team has is going to come from 5 players. Think about the stars in the sky. On a clear night, you are only going to see the brightest the ones, which dwarf the number of the stars that aren’t as bright.
The same is true for many of the things we encounter in our jobs in the nonprofit sector.
In the nonprofit world, we often think deeply about our those folks that give to our efforts. Think about the 100 largest donors to your organization or your effort. It’s not a stretch to think that about half of the donations come from the top 10 donors; those $100 and $200 donors can quickly add up more than those that are $10 and $20 donors.
If you seem to have having challenges in the workplace by either broken processes or some work product not being completed, it might be helpful to chart those items out and see how many times that problem shows up. If you and your team are showing nine processes that always seem to be misfiring, take note now many times of those nine broken processes show up. It’s not an exaggeration to think that half of the time, it’s only three of those nine processes that are repeatedly showing problems.
The best advice is to think about those three processes and work to improve them. Map them out sequentially and see where those things aren’t working. Instead of trying to re-create an entire process, have a hard discussion of looking at the steps of the process and what needs to be changed. Spending a few minutes on addressing these three broken processes could easily save you hours moving forward.
I’ve had my say, what is yours? Feel free to leave a comment and don’t forget to “hit that heart”. Thanks!