You Still Have to Produce the 80 to Get the 20

A backwards look at the Pareto Principle.

One of the more popular philosophies of the recent decade has been the Pareto Principle, in which case it argues that 20% of the stuff in your life is worth paying attention to. 20% of your employees will be the top performers. 20% of your work will be noticed and will yield results. 20% of your interactions will be worth it. The other 80% is to be effectively “thrown in the garbage” or at least ignored. It’s and incitement to be more efficient; to analyze what is actually valuable to you and is adding value to your life, and to take the rest and effectively ignore it or throw it out. While this is certainly an admirable goal and the pursuit of efficiency is to be overall praised, the one fact that gets overlooked is also in the statement. Ironically enough it’s thrown on at the end, like the afterthought it’s meant to conjure. But the truth of the matter is that you still need to produce the other 80%.

Think about it.

In life we’re always doing 100% of a thing. We all get the same amount of time in the day. Whether you spend that time sleeping or working or playing video games or eating or doing awesome karate kicks, you’re spending 100% of your time doing something. Now imagine that you were to cut out the 80% of your life that you deem “less valuable” and expand that 20% of what’s left to fill your entire day. Doesn’t entirely seem possible does it? Or let’s apply it to a real-life test:

I currently run an espresso/coffee bar. Meaning that I’m often charged with considering what new products to put on the menu and often if and when we should remove something. Now here’s the thing, the Pareto Principle definitely is at play here. Of the 10 cakes we serve here, 2 are our guaranteed best-sellers. Of the 12 cocktails on our menu, we have 3 top performers. Of the 15 or more different coffee styles and flavors we serve, there’s only 2 top performing flavors (caramel and vanilla), and 2 top performing styles (café latte and cappuccino). With that being said, following the Pareto Principle, you would think we would cut out the other 80% and focus on expanding the line on our top two or three performers in each category, correct?

Now, in correlation to these changes, you would also expect our sales to go up right? Cut out the 80% of activities that are your “underperformers” and focus on the top 20. In turn you would expect your income to double if not triple or possible quintuple in a perfect world where more efficiency equals better results. But that is not the case.

Unfortunately, we’ve experimented with this concept. And real-world application shows us that even if we do scale back our efforts, we do not get a commensurate gain. Because even if you do sell lemon cakes to your every chocolate forest cake, you’re still selling a chocolate forest cake. There’s an audience for each one of our products and discarding it effectively cuts us off from a slice of clientele that were formerly loyal to us.

As noted here, the other 80% still brings value to us. Removing that 80 brings us to a “nesting doll” of results of sorts, in which case you gradually erode your potential in pursuit of dogmatic loyalty to a few products. And as everyone knows, diversification is your strongest bulwark against any potential storms.

So how do you properly apply the Pareto Principle in your day-to-day life? To this, I have a few suggestions:

Emphasize your top 20%. When making the sale, I emphasize our top 1’s and 2’s. These are the items most likely to guarantee your customers’ happiness. Of all the clients that I see, only 20% of them are regulars (following Pareto’s Principle). The other 80% are newcomers or people who occasionally stop by for an after meal drink. To pump up the volume, cut order time and narrow the selection to our guests (see the cereal aisle conundrum), I offer the top two.

Up the quality of your other 80%. There’s not much I can do to change a chocolate cake. Once it’s made, it’s made. But I can change what we put on it. I can add whip cream or raspberry syrup or pistachio if a customer would like. If your customers aren’t taking to your initial suggestion of the top 20%, chances are they have a very clear vision of what they’d like and what they came up to order. They’re just searching for it on the menu. This is your time to pump up your “bottom” performers. Adjust and tweak things. Being flexible with your offerings and contouring it to the customer’s needs ensures that you get return business. And in the restaurant business, that’s the only business that matters.

The only downside to this approach is that it’s hard to cross-train this methodology. You doing it for one customer does not guarantee that a different employee might do it a different way, or may not have any idea of what the customer is talking about. It is to this end that after-action reports and end-of-day wrap ups are important to establish with your employees. Reviewing over what went wrong and what went right in addition to possible questions and unique circumstances with specific approaches will ensure continuity in product across the board. The only thing is that you gotta stay on the ball with it.

At the end of the day, you can always flip the Pareto Principle on it’s head and choose to cut out your bottom 20% while maintaining focus on your top 80. But be careful when applying the Pareto Principle to your life. Any philosophy applied to rashly and too recklessly can have long-lasting results. Keep in mind that it’s the 80% that makes the other 20% valuable. So use it to your advantage. Either way, don’t ignore it, and be careful when labelling it “useless”.