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Apply the 80/20 rule

While in the Navy, I was honored to work with some of the finest analysts in the world, who were anticipating the demise of the Soviet Union. They came from the Rand Corporation, CIA, military intelligence, Department of Commerce and other government organizations. We had the funds, people and time to study scenarios in detail.

Juggling priorities

Most businesses, non-profits and local governments don't have that much money or time. What I'm suggesting is learn to do "down and dirty" analyses. Don't collect masses of data, rather learn to quickly review, analyze, spot patterns and share your conclusions.

First, you cannot predict the future precisely , so don't waste your money trying to be absolutely right. As you formulate strategy, filter your information through the 80/20 rule. Identify the information that will have the most impact?

Second, most leaders I met have relied on only four or five key discriminators to make a decision. After all the study and debate, they expected these four or five "drivers" to have most effect.

Strategic thinkers must approach the research wearing their leadership hat.

The odds

Odds of succeeding

If you have 5 areas in your strategy where you have to be at least 90% right to succeed, then you probability of sustaining the success is 59%.

Math for the 80/20 rule

For Growth (0.9 probability of success), Gross Margin (0.9), Sustainability (0.9), Capital Needs (0.9), and Timing (0.9), the combined probability is:

0.9 x 0.9 x 0.9 x 0.9 x 0.9 = .59049 or about a 59% chance of success.

If you have to succeed in 8 areas, your probability drops to 43%. 12 to 28%. Therefore, the smartest thing to do is to identify your 20 of the 80/20 rule and focus your energy on getting those four or five key tasks right.


Your employees should approach their jobs the same way, to get their five key tasks right. It should cascade down. That is how you excel at the 80 of the 80/20 rule.




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