The Pareto Principle – A Small Team’s Worst Nightmare; The Team Room Blog #3

28
July / 2021

The Pareto Principle – A Small Team’s Worst Nightmare; The Team Room Blog #3

In The Team Room Blog #2, we talked about George A. Miller and his “Magical Number Seven” concept. It is valuable to tie that concept with a tangentially related theory from a gentleman named Vilfredo Pareto.

Vilfredo Pareto is known as one of the foremost economic and sociological theorists of the nineteenth century. He is most popularly recognized for his observation that 80% of Italy’s financial wealth was held by just 20% of its population. He expanded that examination to a larger scale, hypothesizing that 80% of consequences one will encounter on a social level come from just 20% of the associated actions or causes. Today we call this “The Pareto Principle” or, more simply, the 80/20 rule – 80% of what you get is a result of 20% of what you give.

As a sales director, I find it utterly true that roughly 80% of our revenue comes from just 20% of our clients. When you pay your taxes every year, the top 20% of earners in the nation pay well over 80% of the total taxes collected. 

Your healthcare costs so much because fewer than 20% of the people on your plan use more than 80% of insurance resources. The exact figures and ratios aren’t important – this isn’t meant to be a mathematical equation. It is, however, a terrifying principle that ought to concern you as a leader of a small team. 

Think about your small team – are 20% of the people doing 80% of the work? In other words, is only 20% of your team talented? More importantly, does your team think that you are okay with that?

We have established that a small team is ideally between five and nine people. If you have a team of five, and the Pareto Principle applies, that means that just one person is likely carrying the bulk of the entire team’s responsibility. 

Let’s talk about that one person. That person knows.

They are keenly aware that their team’s success is highly dependent upon them. They want the team to be successful, so they hold themselves accountable for their responsibilities and accountable for the quality of their teammates’ outputs. They do this because they know that their name, their reputation, and their future opportunities are directly tied to their current team’s success, so they’ll go the extra mile where others won’t.

Remember that group project you did back in high school where it felt like nobody contributed effort except for you? That’s the way this person feels every single day. They probably aren’t compensated for the amount of work they do to make up for their ineffective teammates. Because of that, it would be a fair assumption that they are looking for other opportunities (and if they aren’t now, they will be soon). When they get a competitive offer to contribute to a team that applies internal accountability more effectively, they’re going to take it. Alternatively, top performers may get promoted to another role and vacate their position without anybody competent enough or prepared to take over their former function. In either case, you’ll retain 80% of your team, but you’ll lose 80% of your team’s productivity.

Can you see why the Pareto Principle is a small team’s worst nightmare?

The vast majority of teams in Special Warfare fall under the “small” category. There are still B-Players and C-Players on those teams– it’s not a bunch of picture-perfect studs who do everything right every day. The single most significant difference I’ve noticed between the culture of the TACP community I came from and the culture of the private industry lies in tolerance and accountability for those who fall into the “lower-performing” category. Those who don’t “hold their own” in the most elite tiers of the military are quickly put on the sidelines. In private industry, however, they are often accommodated – both to their detriment and to the detriment of their team as a whole. High-talent individuals won’t tolerate that. 

The truth is that no matter how well you select your team (which will be the topic of an upcoming Team Room article) or how well you assess your new hires, B-Players, and C-Players will invariably fall through the cracks and end up on your team. When that issue becomes apparent, it needs to be addressed directly and urgently. As a leader, it is your responsibility to identify defects, set the course for correcting them, and ensure that progress is steady and rapid. If you proactively de-hire low performers, you have a much better chance of retaining the team members you want to. If you don’t, the high performers will de-hire themselves.

The truth is that no matter how well you select your team (which will be the topic of an upcoming Team Room article) or how well you assess your new hires, B-Players, and C-Players will invariably fall through the cracks and end up on your team. When that issue becomes apparent, it needs to be addressed directly and urgently. As a leader, it is your responsibility to identify defects, set the course for correcting them, and ensure that progress is steady and rapid. If you proactively de-hire low performers, you have a much better chance of retaining the team members you want to. If you don’t, the high performers will de-hire themselves.

The bottom Line

Small teams don’t have the luxury of carrying low-talent team members. If they do, they’ll end up in a worst-case scenario where top talent departs, and low performers stay. Don’t let your small team get to that point – steer clear of the Pareto Principle and push for constant improvement in your team.

This article is also available on Medium.

About the author

Dan Bradley
View Bio | More From the Author

After graduating from the Air Force Academy, Dan served for over five years as an officer in the elite Tactical Air Control Party (TACP) community. He served both as a Joint Terminal Attack Controller (JTAC) and as a Task Force Advisor on a 2018 deployment in support of Operation Inherent Resolve. His expertise in selecting, developing, and leading effective small teams stems from his experiences as an Air Force Special Warfare Officer, both in training and in combat.
Dan partnered with the Talent War Group (formerly EF Overwatch) in 2019 and now works as the Director of Sales for Kahn Mechanical Contractors in Dallas, Texas. Dan holds a Master of Arts degree in Strategic Leadership from Saint Bonaventure University. He is passionate about mental health advocacy for the veteran community.

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