Applying the 80:20 Rule in Management

Applying the 80:20 Rule in Management

Search the internet on what a manager should and shouldn’t do, you’ll find a lot of info about it. And that’s what makes it hard to know where to begin. Even if you know where to look, it’s nearly impossible to learn everything. The main objective must be to find out ideas that will create the majority of the results, and this is where we apply the “80:20 Rule”.

The 80:20 Rule is something I picked up early in my management career which you will often see between these related factors below as some examples:

1. 80% of the problems are caused by 20% of the people around it.

2. 80% of the results are derived from 20% of the activities geared towards it.

3. 80% of a company’s sales revenue gets it from 20% of their customers.

4. 80% of what is applied by employees are from 20% of what they learn from training (L&D).

Using the examples above, you now understand how important it is that attention is given to 20% of what needs to be attended to almost all of the time. When there is a sense of prioritizing the 20%, managers in turn prioritize how their time is spent. Since new managers usually lack experience, they then find out that their schedule fills out pretty quickly because they try to do everything all at the same time. Prioritizing enables managers to have that impact needed without the need to work overtime in the office, or worse, bring home work.

Applying this 80:20 rule enabled me to nitpick the problems and then put the needed focus on the areas that needs attention or improvement in any business I’m working on. It also helped me identify the strengths of my team members as well as creating benchmarks for the high achievers.

Question of the day: What’s your example of the 80:20 Rule that you use?

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What people talk 1 Comment

December 14, 2020 Khel Lawrence

I remember when I was still a server in a restaurant where our manager explained to us that as servers, our salary would be 80:20. Meaning 20% would be our salary, 80% would come from the tips of the customers. So, for us to have a good salary, we must work hard for our tips.

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