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When brute majority drowns out performance.

Summary: For business leaders, understand the 80/20 principle and use this to inspire underperformers to be more the high-performers

By Dr. Tommy Weir, Special to Gulf News

Whom you're listening to may be causing you real problems and you're probably not even aware of it. What would you do if you found out that your employee, customer and even market insights have a major flaw?

Well, they probably do.

To explain why, I'll use the 80/20 rule, which you may be vaguely familiar with. A 19th century economist named Vilfredo Pareto made a discovery that's easy to understand. But those who know of it often fail to use it as they should in decision-making. It states that roughly 80 per cent of effects come from 20 per cent of the causes.

He stumbled upon this discovery while gardening when he observed that 20 per cent of the peapods in his garden yielded 80 per cent of the peas that were harvested. Piquing his intellectual curiosity, he began researching to know if this distribution was limited to his garden or if it was a universal truth.

His simple curiosity while gardening led him to discover in the 19th century that approximately 80 per cent of the land in Italy was owned by 20 per cent of the population. From there he also discovered that income also follows a Pareto - 80/20 - distribution, thus popularising the use of the term "elite" in social analysis.

Even to this day, the distribution of global income is very uneven, with the richest 20 per cent of the world's population controlling 82.7 per cent of the world's income.

Pareto's Principle - the 80/20 rule - is a universal truth. For example: 20 per cent of your customers account for 80 per cent of the sales; 80 per cent of your sales come from 20 per cent of your sales force; and 20 per cent of your staff will cause 80 per cent of your problems.

While many people are aware that 20 per cent of a company's staff will produce 80 per cent of its output, they don't use the knowledge of the 80/20 rule when making a decision. As a result you create headaches for yourself not even knowing that you are.

Of course, you should make alignment and prioritisation decisions with this rule in mind. So that you maximise the output of the 20 per cent producers through improved utilisation.

You also need to be mindful of the fact that if 20 per cent produce 80 per cent, then what do the 80 per cent produce? The opposite of the formula is equally true since the Pareto Principle was "proven" using statistical analysis with a foundation in economics. Unfortunately, this means that 80 per cent of your employees only produce 20 per cent of the output.

This brings us to the point of why there is a flaw in whom you're listening to. Are you listening to the voice of the 80 per cent or the 20 per cent?

For example, when you conduct an employee engagement survey (or look at any broadly collected data set whether from customers, the market, etc), the statistical analysis ideal is to get a sample equally representing 100 per cent of the population group. For an employee engagement survey, successful participation is getting 100 per cent of your employees to complete the survey.

Therefore, you're receiving everyone's opinion, equally. But it's not really equal; you're actually listening to the voice of the 80 per cent who only produce 20 per cent of your results for the simple reason that their volume creates a majority in the insights.

The voice of the high-performing minority gets drowned out by the majority.

If you have 100 employees, Pareto's principle says that 20 of them gravely outperform the other employees. They actually produce four-times more than the others do. Yet, unless you segment them out, when you listen to your employees you'll only hear the underperformers for the simple reason they're eight out of ten voices.

So, there is a flaw in what you're hearing as you're listening to the wrong people. Instead of hearing from everyone equally, listen to each group separately so you can hear clearly what the high-performers are saying and then use those insights to shape the mentality of the majority to be more like the high-performers.

Since Pareto's contribution is introducing the data-intensive field of scientific research and mathematical equations to shine the light on where performance comes from, don't lose it by listening to the majority.

The writer is CEO Coach and author of 'Leadership Dubai Style'. Contact him at tsw@tommyweir.com

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Publication:Gulf News (United Arab Emirates)
Date:Sep 12, 2016
Words:796
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