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Achieving More With Less IS Possible

Has anyone heard of an Italian called 'Vilfredo Pareto'? Or even the Pareto Principle? You may not know the name, but you might know the principle.

Pareto was the first economist to discover (in the late 19th century) that many countries in the world operate on an economic 80/20 scale where 80% of the wealth is owned by 20% of the population. This perceived imbalance seemed to exist across borders and cultures.

In about 1950 it was discovered that Pareto's Principle was not only applicable to wealth, but also applicable to resources: time, knowledge, physical assets or anything else that can be made more productive. Including staff.

This makes sense, backing up the oft-used business strategy of giving the busiest person more work because they can handle it.

However, we also know in many cases, it's not a question of competent and incompetent, it's more about how staff are managed, motivated and trained. More importantly, you need to drill into the detail, comparing individual performance of people and processes.

Used in this way, and already expecting an imbalance, you can then apply the Pareto Principle to your existing working environment.

Use it to highlight areas for improvement. Here are some illustrations:

  • If staff have paperwork issues for the job that they do because this occupies a disproportionate amount of time, then structure the paperwork to be dealt with at a certain time during the day, rather than breaking up the rest of their workflow
  • If your sales team has one individual outperforming others by a substantial margin, then use that persons' performance as a benchmark for the others and learn how excellence is achieved. If it is by hard work, then the rest of the team need to know this
  • If you have several products and one in particular is generating all the profit for the business then ditch the loss-making ones and focus on the 'star performer'. Understand why it is successful and learn from it
  • In the online shopping behemoth Amazon, they focus on the top customer complaint every month and aim to eliminate it. Once they achieve this, their customer service improves, satisfaction goes up and staff time is freed up

You need to pick apart your people and processes and work out where the successess and failures are. Focus on the things that work, eliminate non-productive efforts, reject mediocrity and unbundle the detail to expose failings.

As Drucker put it: "What makes one company stand out and lead in any one industry is that it operates at about twice the average productivity of its industry..."

Could you safely say that your business is outperforming the competition? If not, then the answers are to be discovered. You need to find them!

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