We’ve all heard of this ‘rule’ haven’t we? Also known as the Pareto principle, the law of the vital few and the principle of factor sparsity. Simply stated, the idea is that for many events, 80% of the effect comes from 20% of the causes.

Ten years ago I read a book by Richard Koch, (“The 80 20 principle“) which sought to explain how we might benefit from recognising how often this counter-intuitive principle impacts our lives. It had a profound impact on me and I often return to the book for inspiration. Equally I often raise the idea in my talks and during mentoring sessions.

How might ambitious professionals apply this principle in a professional services firm?

• Identify those clients who generate 20% of the firm’s profits (or of the partner’s contribution) and focus attention on them rather than on the 80% of clients that take most time but don’t contribute so much;
• Allocate more resources to those 20% of your activities that generate the highest margin, rather than the 80% of activities that contribute much less – and take more time;
• Keep in mind the idea that there is often a ‘vital few’ as compared with the ‘trvial many’.

Before I go any further into this idea, let me pause and see if any of the regular (or new) readers of this blog have anything to contribute on this topic.