Slow Leadership has an excellent analysis of this rule.
Slow Leadership: How useful is the Pareto Principle
- How do you know which 20% is producing the results? Can you ever find out at a time when the knowledge might be useful? I suspect you can usually only find the answer—if there is one—after the event. And if that’s so, it leads me to a second question.
- Is it always the same 20%? If it’s not (and I suspect it isn’t), maybe the whole 100% will be in that magic 20% group sometime. And if that’s true, the Principle applies only to a specific time period (if it applies at all).
- Are the beneficial results caused by either single actions, or small, readily identifiable groups of actions? If they come from complex patterns of linked causes and effects, it may be impossible, in practical terms, to identify the “magic 20%” under any circumstances.
Performance is often hard to measure and repeat.
Bob Sutton: Learning from “Positive Deviants:” Pitfalls to Avoid
2. Watch the correlation is not causation problem. Everyone learns this in statistics, but a lot of leaders forget it when they benchmark. Just because something is associated with performance, doesn’t mean it causes performance.
5. Winners may succeed despite, rather than because, of some practices. This brings me to my favorite example. It is very well-documented that Herb Kelleher, who was CEO of Southwest Airlines during an unprecedented run of growth and profitability in the industry, smoked a lot of cigarettes and (according to multiple reports, including his own) drank about a quart of Wild Turkey whiskey per day during this period. If mindless imitation of successful companies is the key to success, this means that you need to get your CEO to start smoking and drinking a lot – or to keep it up if he or she is already doing it. Sounds absurd, doesn’t it? But it is no different than the arguments that armies of consultants are making right now about GE, Google, and P&G – you should do it because they do it, and are successful.
Slow Leadership: What do businesses and Las Vegas have in common?
"The same is true for individuals. The solid, hard-working, cautious, risk-averse person who always does the obvious isn’t going to make it to the top—especially in competition with those willing to take bigger risks and flaunt their successes more openly.
These make-or-break decisions are bets on an uncertain future. Get a few right, and you’ll look like a genius—even if what won you that acclaim is almost entirely luck, or other factors outside your control. That’s why you often see high-profile leaders with a track-record of recent success suddenly run out of steam and appear clumsy and incompetent. They haven’t changed. They’ve just run out of their lucky streak, or found themselves in new circumstances unfavorable to their way of thinking or doing things."
Like the gambler in Las Vegas, the Hamburger Manager usually believes that he or she can somehow win over the odds consistently, even if no one else does. The result is the same in both cases: repeating the same behavior that once (supposedly) let you win big, until it causes you to lose even bigger. Organizations fail because they rely more on repeating past successful behavior than risking failure by trying anything new. Individuals do the same. It takes a long-term view to see the truth, but that’s something few people or organizations seem to possess.
So in the end, you have no idea if you will be successful. Furthermore, you will be credited for a great success that may have likely happened by accident. It is almost impossible to detect what happened and what led to a successful program, especially one that deals with marketing.
For instance, I recently built a lattice on my home using fence tops that are usually sold for a gazebo or a wooden fence. In Arizona, no one builds a wooden fence, much less needs a top for it. The business that supplied it must of thought, these will never move. However, with monsoon winds in this state coming soon, a simple lattice would be shred to pieces. These fence tops were triple-layered and framed, much stronger. I purchased 10 of them. Now the person at this business would have never of known that I needed to build a lattice and that I would use the fence tops. Seeing that so many were sold, he would think, "Woo! I am a genius, let's buy more." Later, if no one else picked up on the idea, he would be stuck with a whole bunch of fence tops. He would then wonder what happened.
My library is very similar. It is hard to predict, or even look in hindsight, why something was successful. Unless you shake down every patron who walks in the door, you would have no idea why you were successful. It is a moving target. So if you don't know what made you successful and don't know how to continue it, what do you do? Well, if you keep asking yourself that question, it will put you in the right frame of mind to continue the success. Begin to think how to make things better, move resources to items and programs that are getting heavier use, and you will see that success is not one thing, it is a state of mind.