Pareto’s Principle: An INNOVATIVE Leadership Opportunity

Written by Larry Fehd, CEO & Founder / HPS

The Pareto Principle, named after the Italian economist Vilfredo Pareto, suggests an unequal relationship between inputs and outputs. The principle is a prediction that 80% of effects come from 20% of causes. In simpler terms, 20% of inputs yield 80% of outputs.

Pareto’s Principle represents both paradox and innovative leadership opportunity. A paradox that flies in the face of logic that less is more. That one can accomplish more by doing only the vital few and less or none of the trivial many. An opportunity by identifying the vital few and then allocating appropriate time and resources toward the achievement of those vital few priorities.

It is important to draw a distinction between opportunity and innovation. Opportunity means to capitalize on situations as they arise. Innovation means to create something new that offers value. Innovation is not merely ideation, but rather the application of creativity. One example is my recent introduction and the new concept of Invitational Leadership™. It was conceived by the application of creativity and represents innovative and unconventional ideation for an ascent and breakthrough to Exemplary Leadership™.

How does Pareto’s Principle relate to leadership and, in particular, Exemplary Leadership™? There is a continuous stream of competition for and potential conflicts regarding the best use of our time. We do not mange time, we choose priorities. We do not have the option to hit a pause, reset or replay button. Exemplary leaders are extraordinarily disciplined about identifying the vital few priorities and directing all of their resources (as well as of those they lead) toward the achievement of the vital few priorities.

The problem is that nothing occurs in a vacuum and the continuous stream of proximate and (seemingly) more pressing priorities is constantly beckoning for attention. The problem is further exacerbated by limited time, the myth of viable multi-tasking, social media distractions and often overwhelming demands that we place upon ourselves or those imposed by others. Most of us are seeking relief from the constant stress of our fast-paced lifestyles and struggling to find a pragmatic, sustainable solution.

What are our choices given the reality of the modern world?  One is to surrender and accept the way things are, succumb to the herd of the masses and tolerate the status quo. Another is to consider the wisdom of our friend, Vilfredo, and break through the inertia and embrace the reality of a need to STOP what we are doing and START doing something different. Einstein would be applauding and cheering us on beyond the insanity and illusion that we could possibly facilitate any change unless we do something different.

I believe the solution is counter-intuitive which tends to prolong the problem. If we consider that less is more (i.e. 80% of results come from 20% of efforts), then the obvious question becomes: What makes up the 20% of the vital few activities that will yield 80% of the desired results? This question will need to be answered by your Board of Directors, C-level and other senior executives, etc.). Then, direct and focus all resources within the organization toward the achievement of the vital few priorities.

Last week, I referenced the book, The ONE Thing. The principles in the book resonate and make sense to me. They are simple and underscored by Pareto’s Principle and his extensive research. The problem, like so many innovative breakthrough (inflection point) ideas, is the commitment, resources, implementation and discipline required to pursue, achieve and sustain the desired results.

“The best plan is only good intentions, unless it degenerates into work.” – Peter Drucker 

Tips and Practical Applications: 

  • Commit to and carve out some uninterrupted time to identify the vital few priorities that matter most to you. What comprises your vital few (20%) that will yield (80%) of your desired results?
  • Begin a meaningful conversation about Pareto’s Principle with key stakeholders in your organization. What comprises the vital few (20%) that will yield (80%) of the desired results?
  • Saying “yes” to something always means saying “no” to something else. What are you saying “yes” to that is stealing time away from focusing on your 20%? How often do you find yourself rationalizing “no” with a need for justification?  Just say “no” as a complete sentence!

The Art of Exemplary Leadership
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© Human Performance Strategies (HPS). All rights reserved.

Larry Fehd


Larry Fehd is CEO and founded Human Performance Strategies (HPS) in 2000 following a successful career with Johnson & Johnson where he led executive leadership, team and organizational development. He is masterful at helping clients to break through inertia and the status quo.  He conceived the new and proprietary concept of Invitational Leadership™. He envisions the future of leadership as a passage beyond inertia and status quo and works with clients to develop invitational leaders at all levels of the organization.  He consults to a diverse group of U.S. and international clientele, and speaks and writes about, building high-performance leaders, cultures, teams and organizations.

(512) 415-0748

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