Part 1: 80/20 rule during a pandemic

80/20 rule or the Pareto principle 

Business analyst Joseph M. Juran had proposed the theory 80/20 rule. This was called after the Italian economist Vilfredo Pareto, who reported that 20 per cent of the Italian people earned 80 per cent of income in Italy. Today, Pareto principle can be found in articles such as time management, marketing, software engineering, operations management, project management, military and even relationships/dating.

Even though it is called 80/20, the idea behind the Pareto principle is that a small number of factors are responsible for the bigger number of results.

Some examples:

1. 20 % of your clothes will be worn 80% of the time
2. 20% of a book will contain 80% of the most important information
3. 20% of customers bring in 80% of revenue

This principle at the fundamental level talks about effective productivity or producing more with less. This, if used well, enables management efficiency, strategy effectiveness and quick turnaround time.

Pandemic situation – COVID-19

The COVID-19 pandemic has caused a major pause to the entire world economy. Countries have locked down, closed borders and companies shut. People have become uncertain of the future ahead as no one has the answer on when this will end and when everyone will go back to their normal lives.

The problem is that will never happen. The faster we understand the situation and accept that change is inevitable, we will be quick to adapt and move along.

Adapting to changes 

Humans have lived on earth for the longest time because of one big reason – adaptability. Many species did not make it past a certain century as they are unable to keep up with the changes.

There are many big brands we have come across that have shut down due to the lack of adaptability towards the ever-changing world. Only the adaptive companies are the ones that survived. As people are adapting to the changes, their wants and needs are constantly evolving as well.

Both adapting to change and staying relevant are critical in evolving organisations. Change and relevancy have become the big words spoken by many as it differentiates successful businesses from those that did not practice it.

The challenge 

It is not difficult for an organisation’s management to call out for a change. However, it is difficult for individuals to be adaptable and accepting towards it.

During this period, many people might be at risk of losing their jobs. This situation can be helped if organisations are able to adapt and implement changes. However, this means that employees may have a job redesign to do other things. While most follow suit with the changes, many are still unable to accept this change wholeheartedly

Bringing this back to the 80/20 Principle 

As you would have noticed 20% of those infected are in critical condition where else the other 80% is in stable condition. 20% of those in critical conditions have succumbed to their deaths which have led to 80% of the effects on government movement all around the country. 20% of the industries in Singapore have created 80% of the Singapore economic downturn during this time.

It is vital for the organisation to adopt the 80/20 rule and to apply it to strategies moving forward.

There are five important pillars that every organisation will be looking into during this period to keep businesses afloat.

1. Strategic planning
2. Communications
3. Job redesign
4. Product redesign
5. Training and Development

Strategic Planning 

Although we are in a demanding situation that requires us to focus most of our energies into the operational functions of the organisation, we need to make tactical and strategic decisions to move forward and come out of this stronger. No business will come out stronger by just sitting and waiting for the pandemic to be over.

The question should be what will be one big idea that can create a quantum leap for the organisation? We might need to change our mental models to the very fundamentals of our business processes and the way we run the business

Knowing the business environment will help the business to have clearer plans towards their strategy in moving forward. Additionally, a little assumption is needed to ensure that the business does not wait for anyone. Now that the government have introduced a circuit breaker for a month, leaders should think about what is next. What will happen in the following month? Will things get back to normal or will there be cooling measures in place? Or will there be any possibility of a lockdown the following month? How will all these various decisions affect the business and what strategies do you have in place to overcome most of the scenarios that you have thought about?

Communications 

There are many different things we need to share with the people working in an organisation. What will be the most critical information that will highlight 80% of the concept of the message? Keeping it short and simple allows everyone to understand the message and situation easily. Also, what will be the one way that can easily communicate at least 80% of the message clearly to everyone now that everyone is working from home? Would email still be helpful? What are other forms of communication methods that the organisation has been using? What are other platforms that the organisation have not tried yet but might have the potential to share at least 80% of the entire message concept?

Job Redesign 

During this period, there could be some jobs that become obsolete while other types of jobs become more prominent. For instance, security officers working in the central business district might have a problem as they are no longer required to scan and issue passes. This had resulted in a reduction of the number of people required for the job.  On the other hand, IT officers might see a higher demand in their job scope as many more organisation are adapting and trying to go digital with their businesses.

Understanding a job design is crucial in ensuring the business’ foundation stays strong. To redesign it, the leader would need to understand what will be the one big change that can create 80% of the positive effect on the business. This will ensure a quick, smooth transition for the staff and in most cases cost-effective too.

Product redesign

With job redesign, there will be product redesign as well. This will be the period to analyse and see which will be 20% of the product that brings in 80% of the company’s revenue during this period. It will be wise for the organisation to then put 80% of their effort in this 20% of products to bring in 80% of revenue. It is also critical to redesign other products to create similar successes or to make the decision to put the other products into the shelves during this type of situation.

Training and Development 

With the redesigning of products and jobs, training and development will need to also be looked into strategically to avoid disruption and continuous smooth flow of business outputs. There could have been a series of training arranged by HR for the staff for the entire year. During this period, everyone will be exploring cost-saving measures and usually, staff training might be affected too. One way moving forward will be to find out which training programme can be 80% effective towards the organisation’s new direction. HRs personnel can then concentrate fully on this training programme and exploring how to bring that to the staff during this period.

In conclusion 

All these steps will be helpful for the organisation to stay afloat and come out stronger. They will ensure that organisations start to look into effective productivity and ensure that the number of man-hours put into the business will be all worthwhile. This way, organisations can also ensure that each individual in the team are effectively productive and value for time. Part two of the article will discuss 80/20 principle for managers and how it can be applied during this period.