When I was studying economics, I read a book by E. F. Schumacher called Small is Beautiful, which is a study of economics “as if people mattered.”
One thing that has stood out to me all these years was a reference in this book to an essay written by Thomas Robert Malthus in 1798 concerning the principles of population as it affects the future improvement of society. Malthus stated (among many other things) that it is better for society to pay people to dig holes and fill them up again, rather than to have unemployment.
This is such a profound and simple statement about the value of work to both society as a whole and individuals, and is something that always reminds me of the worthwhile industry in which we are privileged to work.
Something else that the title of Schumacher’s book has always inspired in me is the very thought that small is indeed beautiful.
It may seem a somewhat bizarre connection, but it is reminding ourselves of the 20% (the small) of the 80/20 rule that can stand us in good stead when looking at prioritizing (and, most importantly, achieving) your overall objectives against the quality, efficiency, cost and risk framework within your contingent workforce programs.
This is sounding a little bit like a history lesson, but back in 1896, economist Vilfredo Pareto observed that 80% of the land in Italy was owned by around 20% of the population.
Since this time, numerous observations have been made in the business world such as (courtesy of Wikipedia):
- 80% of problems being attributed to 20% of causes
- 80% of a company’s profits coming from 20% of its customers
- 80% of a company’s revenue coming from 20% of its products
- 80% of a company’s sales made up of 20% of its sales staff
So it follows that, when trying to prioritize strategy to achieve your strategic goals for your workforce program, it is highly likely you will achieve 80% of your objectives by identifying just 20% of the most important goals.
One straightforward way to put this into action is to write down 20 or more goals you would like to reach toward achieving your overall program objectives and then rank them based on how much of an impact they would have on achieving your program’s overall objectives. Thus, you can identify your top 20% priorities that will achieve 80% of your overall objectives.
It is equally important to focus on what you are not going to do (and achieving 80% productivity) rather than worrying about everything that you need to do, and struggling to achieve 50% productivity or less.
I often speak to organizations about the 80/20 rule when I come across situations where a disproportionate amount of time is being spent on the long tail. Organizations should of course aim for compliance and risk mitigation across this long tail, however, be careful not to focus too much effort when it comes to driving improvements in quality, efficiency and cost given the much lower returns on your invested time, which might be better spent elsewhere.