Getting the Big Things (Mostly) Right

Finding Your Vital 20% in a World of Uncertainty and Change

The Pareto Principle, also known as the 80/20 rule or the Law of the Vital Few, is the kind of handy heuristic you’ve probably encountered or even roughly intuited without realizing that you’ve used it. The idea—that 80% of the consequences are determined by 20% of the causes—is appealingly simple but surprisingly and richly transferable.

If you’ve worked in software development or IT, you might have heard this applied to features: e.g., 80% of end users only use 20% of a given application's features. Or to bugs: Microsoft once found that 80% of crashes in their OS and productivity suite were caused by 20% of all bugs detected. Or to the code itself: e.g., 20% of the code contains 80% of the errors.

The economist and sociologist Vilfredo Pareto first noted this 80/20 distribution in his writings about land ownership in Italy at the turn of the 20th century, and the concept was later developed in the context of quality control and process improvement by Joseph M. Juran in the mid-20th century. The Pareto Principle isn’t an immutable law of nature, but the examples and useful applications have proliferated widely over time. You might encounter it in fundraising as 80% of the money coming from 20% of the funders or donors, or in sales as 80% of revenue being driven by just 20% of clients or relationships.

The upshot across all applications: Find the 20% that disproportionately affects outcomes and focus your energies accordingly. The simplicity can be powerfully clarifying.

At radical, we invoke the Pareto Principle in conversations about leading transformation. You can’t do it all, and certainly not all at once, so you should identify the vital 20% of issues and opportunities to focus on what matters. And then, know that within that 20%, there’s likely another 20% to be prioritized even more highly. Get the big things mostly right, and you’ll be successful.

I’ve also been thinking lately about the 80/20 rule and how it might be applied to navigating our world of rising uncertainty and increasingly volatile change dynamics while trying to build for the future. Here, too, I suspect leaders and firms will be richly rewarded over the long term for getting the big things (mostly) right. And in the near term, there’s additional value in the clarity and alignment enjoyed by teams and cultures that know they’re focusing on what matters, tuning out the rest as noise, and pulling in the same direction together.

The obvious question then: What matters? Which is the vital 20%? What big things do organizations really need to get right?

Way back in 2020, the futurist Leah Zaidi addressed this at the macro level in a paper, arguing that in an ocean of trend data, only three trends truly matter for “future-proofing and innovating in a way that is coherent with the emerging reality.” Specifically, she pointed to (1) the impacts of a worsening climate crisis, (2) the rise of artificial intelligence, and (3) the struggle for an equal, just, and democratic society. Five years on, this macro list is still looking quite robust, although one could certainly argue today for expanding the third trend to include something related to global economic reorganization.

To arrive at something like this that might be scoped for your leadership role and more specific to your organization and strategy, you could take Zaidi’s macro-trend/critical certainties approach and apply an 80/20 filter. What are the critical certainties (the big things you feel pretty sure you know you really KNOW) for your organizational future? And what are the critical uncertainties – the most uncertain variables that are likely to have the greatest impact on how your strategy plays out?

Make a list of each. Now, filter each list down to the 20% that feels the most durably certain and useful as a stable foundation on one hand and then the most richly uncertain and impactful as questions to explore on the other. How would your present strategy and prioritization of challenges and opportunities look through each of these lenses? Are your energies – or even your anxieties – focused on the vital few areas that might do the most to determine your organizational future?

@Jeffrey