How the 20/80 rule works with Strategic Planning

Paretto Was an Optimist

How the 20/80 rule works with Strategic Planning

The old 20/80 rule. That 20 percent of the customers bring in 80% of the revenue. That 80% of all companies fail after 3 to 5 years and that only 20% make it. That 20% of the employees account for 80% of the new inventions and products. On and on the observations go. Known as Paretto’s Law, this 20/80 ratio is often referred to and is often “right on”.

But in one area, Paretto was an optimist.

In one recent survey done by Smart Business Magazine for Cleveland, Ohio it was found that about 16% of the businesses in the area actually had “business plans”. That is 4% short of Paretto's optimistic 20%.

Isn’t it interesting that all these observations speak to the lack of planning? Today’s world comes at us so fast that it almost seems as if the speed of change prohibits planning. 16% don’t think so. And the work of today’s service professionals mirrors this. ”Pick an area where your prospective customers have problems, and help them fill those needs” goes the mantra of today’s consultant.

I was not surprise with a conversation I had recently, with a long standing member of the National Speakers Association. When I asked her what most of the members considered their bread and butter she indicated that almost everyone covers 1) Change, 2) Communications and 3) Planning and Visioning.

So why don’t people do more planning?

1- It is too scientific.

Some of the greatest examples of success are often heralded for their lack of schooling - Bill Gates of Microsoft, Dave Thomas of Wendy’s fame. Is it an academic issue . . . or an issue of hard work and common sense? I work with educators a lot. They comment among themselves about how many people have put into practice the subjects that their doctorate dissertations cover . . . and how many of those ventures fail. “Don’t you have to have a Harvard degree or be a member of some famous consulting firm to have the smarts to do planning?” Doesn’t look like it.

2- It takes to long

This is probably true. But, it does not need to take as long as it currently does. Using new strategic planning tools such as graphic facilitation, have shown to shorten meetings by 24%. These new processes make consensus of the group move from 58% to 79%. We, as humans, think “visually” and some of these new methods (the same methods employed by the author) have been proven to tap into the human thinking process.

3- It is too expensive

As practiced by most people that are doing planning, this is often the case. But a few companies have adopted the new visual/graphic process for their planning and are seeing huge benefits in speed, communication and direction. For every Procter & Gamble, or General Motors, who use the new processes, there are also others who don’t want their competition to know about these cost saving tools.

Recently in a conversation with one strategic planning consultant, I was told that the average cost of doing a day of planning with the top executive staff of a company in this country is $50,000 a day. Where he got his information, I don’t know. What I do know is that when you take all of those salaries, the meeting expenses, etc . . . . it well could add up to those kind of dollars. But the question begs itself, “But doesn’t it cost close to $50,000 a day if those same executives are working and don’t have a common plan?

4- It never gets used.

A builder has a strategic plan that gets used. . . . a lot. It is called blueprints. A ships captain has a strategic plan that gets used . . . a lot. Navigational Maps. A professional football team has a strategic plan that gets used a lot. A play book.

These and many other examples are “expected” in their respective fields. The problem most business men have is that they put their plans into 3 ring binders or in folders where they “never get used”. They are not “visual” so they don’t get used.

There is the problem. They don’t represent the visual thinking of the group’s members. Enter the story maps that are being found by more and more corporations.

Do you have a plan? A personal plan? A company plan? If we play the game of number generalities, you should be OK. You will be part of the 80% who make the lower 80% of the earned income in today’s world. If you continue to do what you have always done, you will continue to get what you always got.

Of course not having a plan . . .well maybe that IS your plan. I hope not.

About Kordell Norton - The Top Line Guy

Your organization has a strong interest in the "top line" for growth. As a consultant, speaker, author, Kordell Norton works with corporate, association, education and government organizations who want to focus on branding, sales, marketing, strategic planning/leadership, team building, and customer service.

Kordell was an executive with several multi-billion dollar corporations with executive suite positions in sales, HR, marketing and call centers. As a certified Graphic Facilitator, he uses highly visual processes, along with humor, and entertaining methods for powerful, high energy presentations.

Author of Throwing Gas on the Fire - creating drastic change in Sales and Marketing

He can be reached at (330) 405-1950 or at kordell@kordellnorton.com or at his website - www.KordellNorton.com