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80 : 20 Rule (Apples / Oranges)


It is natural that people strive for perfection in life around them. We want breakfast to taste great, be healthy, help us to lose weight, require minimal prep time, and be inexpensive. We want our commute to work to be expeditious, safe, accident free, and no road rage. We want the workday to go quickly but allow for enough time to get everything done, experience no power or internet outages, no equipment malfunctions, experience no computer hacks, and phone batteries never wear down and require a charge. When we get home from work everyone is happy, dinner smells great and is ready to eat, tastes great and is less filling, a cold beverage is in a glass, and my favorite TV show – a football game – is on every night. And now, we want a vaccination plan to counter a pandemic that must be efficient, volume oriented, and equitable for all.

In business, we also would like everything to work perfectly. We want to have a single product that fits everyone perfectly, keeps customers warm and cool as needed, is everyone’s favorite color, expands / shrinks as each customer’s waistline changes – or any other body measurement -, never wears out, and reinvents itself to meet each customer’s changing needs. It would be the website that answers every customer’s questions and meets all needs even before it is invented. Reality check – NOT GOING TO HAPPEN! Every business day is an experience in prioritizing what qualities of a product are most important, who is the best customer profile, how to spend time within each day, and so forth. It is about separating the apples from the oranges.

Businesses must adopt the 80 : 20 Rule, although it may be an 85 : 15 version or some similar permutation. But what it means is to find the common ground and prioritize accordingly. It may be the 85% of customers’ needs that you elect to meet, it could be 85% of production time is allocated to the highest margin product line, or it could even be a time allocation tool where 85% of time is allocated to sales activities and 15% to financial management. The key takeaway here is forced prioritization. It may not be driven by what a person likes to do, but what she has to do. The realization part is that the result is often inverse to the input. When taking a hard look at prioritization, managers will find that the 85% most important activity only requires 15% of their time, and the unique activity that produces minimal results is eating up 85% of their time. Everyone has had to deal with that impossible customer scenario where spending excess time with a customer – he wants everything perfect immediately, infinite flexibility, and a great deal on price – that actually ends up costing you money. Your expended excess time is unfortunately creating an expert customer. You need to fire that customer and not negotiate with him because of his acquired expertise! In that example, you are spending too much time 85% with one customer that is resulting in a minimal margin on sales – 15%...or worse.

Remember, you can always go back and catch up on the 15% lower priority items, if you really have the time available. You may also find you are catering to the whims of the so called experts, who would be happy to eat your lunch to their personal betterment. Time is a scarce and very valuable business asset that you need to both protect and be prudent with. Or, looking closely at an earlier blog post – you may actually be creating your own WASTE. The same goes for battling a pandemic. The intended result through prioritization is to spend the bulk of your time in the right places, those of highest priority. It does take some time and thought to identify these priorities and stick with them, but businesses often find that to be the road to success.

When it comes to vaccinations – the priority is to develop immunity through a herd mentality and high percentage of vaccinated populace. Fastest way there that I can see is to vaccinate the largest and most accessible population percentage. Or, you could spend 85% of the time on that 15% of the population. Again, it is about prioritizing to first achieve the top priority item and then progress. But, people also don’t like the hard decision of which item is # 1, # 2, and which is # 3. They want all to be the top priority. And, amazing isn’t it, all the new experts that have emerged on vaccination strategy that have come out of the woodwork on the way to the finish line, while silent for so many months?

Prioritizing is a constant business decision that exists at a macro level in business plans and also on the ground daily as to how to spend the next 30 minutes.

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