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.[1] 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 core of your business. These people will work all the hours that God sends for your company, leaving no stone unturned and generating the maximum possible productivity/revenue for you that they can.
80% Productive – These lovely folks make up the majority of your business and will work 9-5, getting their tasks done and not making much of a fuss about it. They are less likely to offer innovation, but they are reliable, trustworthy, and dutiful.
10% Unproductive and Defiant – These people are outliers and mercifully low in number, but they create work. They are difficult, unwilling to work hard, and generally take more from your company than they give.
This can also be applied in other areas of life. Morality is another example, 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?
As touched on earlier, the 10-80-10 rule is an off-shoot of the Pareto Principle, first conceived of in the early twentieth century by Italian civil engineer turned economist Wilfredo Pareto. He simply observed that 80% of the property in Italy, at that time, was owned by 20% of the population. Wealth distribution, according to Pareto, was divided 20/80 across all sections of society. The country, age, gender, or industry didn’t matter. This principle still applied.
Later on in the 1940s, Joseph M. Juran (himself an engineer and management consultant) applied the Pareto Principle to human behavior with the aim of improving quality control, positing that 80% of the success on any one project would be due to the efforts of 20% of the team working on it.
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.[2]
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 the 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?
Now, before you slam your laptop shut, haul off, and start brainstorming ideas about team-building exercises and corporate days out, it is first very important to understand the metric by which you measure productivity. Numbers on a spreadsheet or letters next to a person’s name only paint part of the picture.
What you value in your company is unique to you. As I’m constantly saying to entrepreneurs and business owners that I coach, you have to be specific with what you are asking of your team, your customers, and the universe at large. Ask a vague question and you’ll get a vague answer.
So, do the work of understanding exactly what is working for you and what isn’t. Simply saying that you want revenue to increase is not enough. By how much? In what areas? Who will we add value to increase their spending with us? Where and whom should we target for new growth?
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.[3] 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 felt the most motivated to be productive are worth interrogating.
Why Did They Feel More Motivated?
I would posit that the answer is very simple: they felt heard and that they could affect change. It’s a hugely important part of human psychology that we feel as though our ideas, thoughts, and feelings are heard by others. When we feel ignored, we feel unvalued. When we feel unvalued, we are (naturally) unmotivated.
This is not to say that you should make everyone a manager within your company. Your business might be a start-up or just a few people working out of your converted garage. The point is, make sure that they all feel heard. I guarantee you that—especially among the upper end of the 80%—you will see the greatest uptick in productivity if you simply listen to them. Make them feel as though they have a vested interest in growing your business, too.
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 might be a sole trader or maybe a consultant—someone who does not have a team to rally and simply sells your services to others. In that instance, how does this work for you? Divide yourself up into the 10-80-10. Do it by tasks: what are you most efficient/gifted at, what are you good at, and what do you constantly put off doing?
Here’s an example. Say you’re a writer (where did I get this one from?), and you’re very successful. You are asked to write articles for lots of great, top publications like LifeHack, or maybe you’re writing a book and your screenplay just got picked up by Warner Brothers. Writing is your 10% elite. It’s where you offer the greatest value.
It’s probably not the actual writing so much as it’s the creativity, ideas, and talent that you can bring to bear in your writing. The actual writing—sitting down at your computer, tapping it out, proofreading, and catching spelling/grammar mistakes—that’s your 80%. Sure, you’re good at it. You are competent and get it done. But it’s not where you are at your most powerful, and you usually run out of steam at some point 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 can you be most effective in taking action that will support you in accelerating your growth? Again, start with the 80%. Try finding ways to improve the writing experience for you. Maybe observe yourself on a typical day, and note when you do your best work. It might be right after your second coffee that you stay at your desk for longer and write with the greatest clarity. So, start structuring your day around that.
What has that cost you? Nothing! It was simply a case of reorganizing your day and bingo, you are doing more of your best work in less time than it took you before. Pretty soon, after you’ve tightened up your day so that you are of maximum productivity, you’ll find that you have more time and resources.
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.
Final Thoughts
The 10-80-10 rule is not about adding ridged structures or following strict rules per se. It’s simply a lens through which to view human behavior, including your own. The reason why it is (or could be) the key to your success is that it enables you to identify those small changes that you can make that will have the greatest impact and accelerate your growth the fastest.
If you categorize your labor and the labor of your employees in this way, you’ll be able to more easily identify where you can have maximum impact with minimum input. If you continue to work out from there, your success will snowball, and you’ll have the support in place to maintain it.
While the 10-80-10 rule is key to achieving success, it’s crucial to remember that success also lies in solid foundations, especially when it involves setting up a new business. Establishing an LLC represents one of the first, fundamental steps towards this. If you’re unsure about which service to use, check out our article on the best llc service available . We break down the options, helping you make informed decisions towards achieving business success.
More Tips on How to Improve Your Success
Achieving Goals: The Ultimate Guide to Goal Achieving & Goal Setting
8 Simple and Effective Ways to Start Reaching Goals Today
How to Stay Motivated and Reach Your Big Goals in Life
Featured photo credit: Andreas Klassen via unsplash.com
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Author: Amaury Abreu
