Remember Pareto’s Principle? He’s So 2006.
If you’ve been anywhere around business or business books or hustle culture or anything related to GSD (“Getting Stuff Done”) at work, you’ve heard of the Pareto Principle.
The 80/20 Rule.
80 percent of [THING] will come from 20 percent of [GROUP]. Simple, really: if you sell something, 80 percent of sales will come from 20 percent of your customers. If you take a category — like, for instance, music — you’ll find that 20 percent of the artists produce 80 percent of the songs that actually get listened to.
For a while, this was canon in business and you couldn’t go into a work meeting without trying to use that to sound smart. “Boss, why don’t we fire 80 percent of our clients so we can just sell to the 20 percent that we spend all our time with?”
This ignores…well…EVERYTHING about whatever business you’re in, but points scored for simplification!
Introducing Price’s Law
THE ECONOMY is in weird shape; Note that your job might be at risk if you aren’t deemed to be productive. However you slice that at work — look busy! be at your desk! — at some point you’re gonna start looking around and asking the question: Am I Getting Stuff Done?
Price’s Law is “stupid simple:”
The square root of the number of people in any enterprise will produce 50 percent of the productivity.
Let’s apply this to your (hypothetical) team at work and figure out what that means for you.
If it’s a small team, it of course makes sense: in a team of 4, the square root of 4 — which is 2 — will do half the work. (I was told there would be no math.)
But in a bigger team Price’s law starts to have…bigger impact.
Raising Your Hand At Work
In a (hypothetical) team of 50, let’s call the square root 7. 7 People are getting stuff done, the other 43 are working at roughly 50% capacity. In a sales-driven organization, that doesn’t bode well for the other 43.
Now start to look around: are you one of the 7?
Probably pretty easy to answer that question in a lot of organizations. You have a little success on a project and then you have another project assigned to you. You open the door to sell something to a company and all of a sudden that company asks you to help them solve a different problem. You write a piece for the company blog and it clicks and then management realizes you should do more blog writing.
You are pretty obviously one of the 7.
Making Sure Your Department Is Productive, Too
Your job as “one of the 7” is pretty important when management starts to look to…well, how do we say this…cut the dead weight. These are sometimes the “get me the low performers” discussions, but they, too, are sometimes the “which departments can we do without?” discussions.
Yeah, that’s right. If marketing isn’t producing, marketing can easily be cut. Well, let me edit that: If marketing isn’t seen to be producing, marketing can easily be cut.
Your goal, then, as one of the 7 is to make sure that your department works on — and ONLY on — high-impact projects. If 20 of the other 43 are assigned to the Penske File and all they’re doing is moving the contents to an accordion-style file folder, that’s a low-impact project. If the other 23 are working on monthly TPS reports that don’t go anywhere, that’s a low-impact project.
Your Book of Business
It’s an insurance industry thing: the Book of Business. Or your portfolio. You should have a sense at all times of what that means for your personal situation: what are the clients you’re bringing in and/or responsible for? What are the projects that you are working on and how are they tied to the business and its bottom line?
What is your department doing on those days when they’re not planning or navel-gazing or working on Penske Files and TPS reports?
Your Book of Business should actually be yours. You should be able to discern where you have the most impact, and, if they show you the door, you should be able to say “hey, I was one of the 7 and here’s how.”
Or you should be able to say “here’s what the other 43 were working on, it added no value, I helped with the things over here that did add value, and I’m indispensable.”
You can thank Mr. Price.
Editor’s Note: This post originally appeared on Dave’s Substack on March 3, 2024.
