In the 19th century, the economist Vilfredo Pareto found that in all societies, a small minority of top earners, meaning about 20% always accounted for about 80% of the wealth. Today for great companies, it boils down to the fact that 20 percent of their activities and investments usually generate 80 percent of the valuable Output.
This powerful principle is equally critical to effective leaders and our empirical research showcases five initiatives you can start putting in action today. Namely: harness your 20% strengths, enlist Einstein theory of relativity, hire high potential talents, make zigzag progress, and master the art of Delegation.
1. Harness your 20% strenghts as your distinctive value. This is where your greatest talents and interests lie. Many leaders have only a vague idea about their most valuable strengths. So first find your spike asking the following questions: What is the most distinctive attribute about you? What tasks really excite you at work and in life generally? What kinds of accomplishments energize you? What skills are you better at than nearly anyone else? Then second develop your valuable skills by using it repeatedly, because practice truly does make perfect. Last but not least, focus on doing what you are really outstanding and either find people to do the other 80% or outsource these activities.
2. Hire high potential talents who have other strengths than you. In other words, don’t just fill positions with the best available candidates. Rather hire talents who are better than you with specific complementary skills. It’s true that such people may leave eventually, but not before they have produced significant value. Moreover you can improve your recruiting and retaining capabilities in hiring young talents who are under-confident rather than over-confident, or seek talented older employees who have been overlooked. As a rule of thumb never delegate your hiring responsibility as leader, especially for your direct reports and key positions. The consequences could be catastrophic for the entire organization on the mid-term.
3. Enlist Einstein theory of relativity, which suggests that space doesn’t have just three dimensions, but four. The fourth dimension time is not independent of space. In seeking out vital ideas, customers and talents in your business, recognize the importance of time since 80 percent of wealth gets created in about 20% of the time available. What happens to the rest of the time? It mainly gets wasted or misused. Thus rely on two stratagems to use time most productively: 1) Compress the delivery time to customers; Banks did this with ATM machines and IKEA with cashier-free checkout. 2) Use the benefits of digitalization to reduce process throughput; real time results in e-commerce and better customer experience in connected cars.
4. Make zigzag progress because success doesn’t follow a linear route. It zigzags, requiring new infusions of creativity as it evolves. In your venture don’t assume the second stage of growth will be mirror image of the first one. Even good formulas need tweaking. Consider the example of Sam Walton, Walt-Mart’s founder who admitted he copied most of the ideas from other successful enterprises; but he always added a distinctive touch as a modification or an extension to create substantial value.
5. Master the art of delegation, which it is routed in the essential purpose of management in order to produce valuable results through talented people. Delegation is not just good for you but also good for your team, because it helps them upgrade their skills and competencies and give them the opportunity to showcase with confidence theirs aptitudes. The five rules to efficient delegation are: a) determine which tasks to delegate, b) identify the right talents for the specific tasks, c) assign the tasks with less instructions but agree on the results to achieve, d) monitor the progress and provide constructive feedbacks, and e) evaluate the performance based on quality, time spend and goal achievements. Smart delegation is a powerful tool to be an effective leader.
Once you apply these Pareto principles to your business and life, you can start make slow and steady progress toward sensational results. But you need discipline and agility to forge your sustainable productivity, improve your work-life-balance and enrich the world around you.