The 10-80-10 rule is an extension of the Pareto principle that says 80% of productivity/wealth is generated/owned by 20% of the population. This ratio is often observable in various statistics and studies.
The 10-80-10 rule takes this principle and applies it more specifically to human behavior. It is also malleable, enabling people to move between categories. If we apply it to a company (just as an example), in essence, the 10-80-10 rule looks like this:
- 10% Highly Productive Elite – This is the backbone of your company. These individuals will work for your firm for as long as God allows, leaving no stone unturned and providing the highest potential productivity/revenue for you.
- 80 percent Productive — These excellent people make up the majority of your company and will work from 9 to 5, getting their work done without raising a fuss. They aren’t inclined to be innovative, but they are dependable, trustworthy, and obedient.
- 10% Unproductive and Defiant — These are outliers who, thankfully, are in the minority, but they create work. They are tough to deal with, hesitant to put in long hours, and take more from your firm than they contribute.
This can also be applied in other areas of life. Another example is morality, with the vast majority (80%) of us being law-abiding citizens who may bend the rules occasionally, 10% being unscrupulously good, and 10% being out-and-out criminals.
Who Came Up With the 10-80-10 Rule?
The 10-80-10 rule is an offshoot of the Pareto Principle, which was first proposed by Italian civil engineer turned economist Wilfredo Pareto in the early twentieth century. He simply stated that 20 percent of the population controlled 80 percent of the property in Italy at the time.
According to Pareto, wealth distribution was split 20/80 across all social classes. It didn’t matter where you were from, how old you were, whether you were male or female, or what business you worked in. This principle was still in effect.
Later in the 1940s, Joseph M. Juran (an engineer and management consultant) adapted the Pareto Principle to human behavior with the goal of enhancing quality control, claiming that the efforts of 20% of the team working on a project would account for for for 80% of its success.
Since then, various researchers and theorists have expanded the Pareto principle into the 10-80-10 rule—observing that 10% are true leaders, 80% seek guidance from others, and 10% wilfully act in a counter-productive manner.
How to Apply the 10-80-10 Rule to Management to Be More Successful
Well, let’s stay with the team/workforce model for now: if you want to improve productivity in your company, where should your focus be? All too often, “the squeaky wheels get the grease.” That is to say, we tend to try and fix what’s most broken in our organization (namely the bottom 10%) before we move on to the less broken.
When you realize, though, that you’re pouring resources into just 10% of your labor force, it starts to look very inefficient. Moreover, that 10% is comprised of folks who are highly unlikely to change their tune (statistically, anyway).
You need to focus on 80%. That’s where you’ll have the most impact and where you’ll create the biggest uplift in productivity. The 80% aren’t (of course) completely equal. Some will sit closer to either of the 10% range, but this means that you should be able to increase the size of your top 10% to be more like 20 or 30%.
How much of a difference would that make?
Before you slam your laptop shut, drag yourself away, and start thinking about team-building exercises and corporate outings, it’s critical to first grasp the metric by which you assess productivity. Only part of the picture is painted by numbers on a spreadsheet or letters next to a person’s name.
You are the only one who knows what you value in a firm. You must be explicit with what you are asking of your team, your consumers, and the universe at large, as I regularly tell entrepreneurs and business owners that I teach. You’ll get a vague answer if you ask a vague query.
So, put in the effort to figure out what is and isn’t working for you. Simply stating that you wish to raise revenue isn’t enough. By how much do you mean?
What areas are you talking about? Who will we give value to in order to get them to spend more money with us? What should be done and who should do it?
Who Does This Desired Increase in Productivity Help You Become and Who Does It Serve?
Armed with this, you will have much more clarity to take to your team and with which to start formulating a plan of action. You can look at what would incentivize those in the 80% who just need a slight nudge. That’s where minimum effort will yield maximum results! So, start there.
A 2014 Gallup poll found that a third of the US workforce felt unmotivated in their jobs, with the highest levels of motivation found among managers. This tells us two things:
- Firstly, the unmotivated third is comprised partly of those in the 80% camp, but the entirety of the unmotivated 10% is in there, too. If you take them out (because they are those people), the remainder isn’t as many people and they are in a group that still wants to work and get on.
- Secondly, those in a position of management (i.e. those who feel as though they can effect change in the company) tend to be the most motivated.
Now, let’s not confuse motivation with productivity. You can be as motivated as you like, but without proper strategy or direction, you’ll just be a hammer in search of a nail. Nevertheless, those in management who feel the most motivated to be productive are worth interrogating.
Why Did They Feel More Motivated?
I believe the answer is straightforward: they felt heard and had the ability to influence change. The sense that our ideas, thoughts, and feelings are heard by others is a crucial element of human psychology. We feel unvalued when we are disregarded. We are (naturally) unmotivated when we feel unvalued.
This isn’t to argue that you should make everyone in your firm a manager. It’s possible that your company is a start-up or that it’s simply a few people working out of a converted garage. The idea is to make sure everyone feels heard.
I guarantee that if you merely listen to them, you will see the greatest increase in productivity—especially among the upper 80%. Make them feel as if they, too, have a stake in the success of your company.
If they can see the role that they play is important and understood by you, they will push themselves to go further, work harder, and achieve more. You have to put yourself in their shoes, which brings us on to the next point. . .
How to Use the 10-80-10 Rule to Improve Success
Okay, so far we’ve just looked at the 10-80-10 rule as it pertains to the success of groups. But how does it apply to us as individuals? What can we learn from it and use in our day-to-day lives?
You may be a sole trader or a consultant—someone who doesn’t have a team to rally around them and instead sells their services to others. How does this work for you in such a case? Divide yourselves into ten groups of ten, ten, ten, ten, ten, ten, Do it by task: what are you most efficient/gifted at, what do you excel at, and what do you procrastinate on?
Here’s an illustration. Let’s pretend you’re a successful writer (where did I get this one?). You’ve been requested to write articles for a number of prestigious publications, such as LifeHack, or you’re working on a book and your screenplay has just been picked up by Warner Brothers. Your ten percent elite is writing. It’s where you can add the most value.
It’s probably not so much the writing itself as it is the creativity, ideas, and talent you can offer to the table.
The actual writing—sitting down at your computer, typing it out, proofreading, and spotting spelling and grammar errors—makes up the other 80%. Sure, you’re a natural at it. You are capable of completing the task. However, this is not where you are at your most strong, and you frequently run out of steam during the day.
Then, there’s your bottom 10%. That’s probably your operational tasks, such as your timekeeping, bookkeeping, invoicing, correspondence, tax return, etc.
Where Do I Get These Examples From?
So, where are you most likely to be most effective in taking action that will help you accelerate your growth? Start with the 80 percent once more. Look for ways to make your writing experience better. Consider observing yourself on a regular day and noting when you are at your most productive.
It’s possible that you’ll stay at your desk for longer and write with the most clarity right after your second cup of coffee. As a result, start planning your day around that.
How much has it cost you? Nothing! It was simply a matter of reordering your day and, voila, you’re getting more of your best work done in less time than before. You’ll soon discover that you have extra time and resources after you’ve tightened up your day to be as productive as possible.
Once you are better resourced, having landed bigger and bigger jobs, you’ll be able to take care of that pesky bottom 10%. It could be that you eliminate it by outsourcing the work to someone else. Now that you earn more for less of your time, why not? Just take it out of the equation altogether.
The 10-80-10 rule isn’t about adding ridged structures or strictly following guidelines. It’s just a way of looking at human behavior, including your own. It is (or maybe) the key to your success since it lets you pinpoint the minor improvements that will have the largest impact and drive your growth the most quickly.
You’ll be able to more readily determine where you can have the most influence with the least amount of effort if you categorize your own and your employees’ labor in this way. If you keep working out after that, your progress will snowball, and you’ll have the support you need to keep it up.