Monday, August 17, 2009

80/20 rules

I don't know why the 80/20 rule is specified for so many things. I'm not sure if it's just convenient or if it has some instinctive feel that rings true for us.

I used to have an 80/20 rule when I was working and used it extensively when working with the people who reported to me and was especially fervent in communicating the rule to the managers who worked for me. It was based on something that came up during a leadership/team-building exercise when someone asked a very simple question.

It was during a discussion on how to identify and promote the next set of leaders within the organization. Someone asked me, "Where do you spend 80% of your people time?"

At first I didn't comprehend the question. So the person asked me more directly, "Do you spend 80% of your time with your bottom-20% performers or your top-20% performers?"

I hadn't really thought about it before but it generated quite the discussion. He asked me, "If you doubled the performance of your bottom-20% what would you have vs. doubling the performance of the top-20%?"

It was a no-brainer. I knew what the right answer was. I needed to concentrate my efforts on the top-performers in order to increase the productivity and effectiveness of the entire organization. Most importantly, I couldn't disrupt the entire organization in order to help the bottom-20%. Doing so would simply turn things topsy-turvy in the organization and make things worse for the rest of the group.

I think about that lesson often and it's very difficult for me not to think about it amidst this current carnival-like debate on health-care. Approximately 85% of the people in the United States have health-insurance, either through private providers or the government. After dissecting the numbers of those un-insured, it's only about 5% of the people in the states who are chronically un-insured. That is, they don't have insurance, can't afford insurance and don't currently qualify for government insurance.

Do we really need to completely re-invent the entire system to help the 5%? Do we want to change things for everyone or just find a way to insure the chronically un-insurable? It seems to me that the latter would be much easier to do than the former.

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