Archive | July, 2011

Axioms: The Pareto Principle #2 – How to…..

27 Jul

In any complex system a small number of variables, usually fewer the seven, control most of the variance in the system. If you can identify these variables, you can exert great influence on the performance of the system.

The Pareto Principle is the basis for a Pareto Analysis, a simple and powerful way to identify these variables.  Imagine any data set, quantitative or qualitative, numbers or words.  If you assign these data into n boxes/categories and count and rank order the frequencies you can then produce a Pareto Chart.  The categories would be on the horizontal or x-axis and the frequencies on the vertical or y-axis.  The Pareto chart shown last week and in this blog are typical but these have fewer categories than usual.

With narrative data it is first necessary to inductively content analyze the narrative and then label and rank order the resulting categories by frequency.

This is a terrific tool for both tactical and strategic analysis and makes a SWOT look weak and useless (unless you don’t have a handle on the those characteristics).

For more on how, go to: http://en.wikipedia.org/wiki/Pareto_analysis and use the Pareto chart link.

Beyond Luck is now an e-book on Amazon.  At $6.95 it’s a great deal.


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Axioms: The Pareto Principle

20 Jul

In the middle of the 18th century an Italian economist named Alfredi Pareto discovered that 80% of the property was owned by 20% of the people.  Everyone promptly forgot this until WWII when Joseph Juran, one of the early Quality gurus, rediscovered it as a powerful tool in quality management.  More recently organizational development people have generalized the principle, casually known as the 80 – 20 rule, to describe a core characteristic of complex systems.

Simply stated: In any complex system a small number of variables, usually fewer the seven, control most of the variance in the system. If you can identify these variables you can exert great influence on the performance of the system.  Variance is a statistical term for the total activity in a system.  For those of you who are purists it is the square of the standard deviation in a data set.

This happens to be an amazingly important principle because it essentially means that if we can identity this handful of characteristics we can run any complex system.

Beyond Luck is now an e-book on Amazon.  At $6.95 it’s a great deal.

Axioms: Parkinson’s Law

13 Jul

Parkinson’s Law states “work expands to fill the time available for it’s completion.”  A corollary is “set the performance bar low enough and many will eventually give you their worst performance.”  Unfortunately we have all seen this too often.

A particular challenge for good managers is to find a performance demand level that is high enough to catalyze excellent performance yet not too high to utterly discourage people from trying.  This is complicated by the personal differences in people’s perceptions of too high or too low.

Clearly good goal setting and timely accurate, mostly positive feedback are the critical elements driving high performance.  Does that sound like The One Minute Manager?

Interestingly, leadership may be the art of setting the bar too high and then guiding people to attain it by capturing their imagination and enthusiasm.  Consider: “To achieve the goal, before this decade is out, of landing a man on the moon…..”

Beyond Luck is now an e-book on Amazon.  At $6.95 it’s a great deal.

Axioms: The Peter Principle

6 Jul

The Peter Principle states that in organizations people rise to their level of incompetence.  Almost anyone who has had a “boss from Hell” can attest to this principle.  Actually there is an important grain of truth in this principle and it anticipated an important area of research:  What predicts managerial success.  Longitudinal and other studies show there are three key predictors of managerial success: Competence, Emotional Intelligence (interpersonal skill) and Integrity.  Despite the fact this finding is several decades old, many organizations still promote only on the basis of competence. Competence is a necessary condition for managerial success, but not sufficient.

This promotion pattern may also account for the fact that most problem managers are those who work poorly with others.  They are not incompetent or unethical, although these three deficits tend to be correlated.  Imagine a boss or co-worker who is incompetent, difficult and unethical – that must be fun?  So why do managers promote people who are difficult to work with?  There are many reasons, care to share your favorite?

Beyond Luck is now an e-book on Amazon.  At $6.95 it’s a great deal.

http://www.amazon.com/s/ref=nb_sb_noss?url=search-alias%3Ddigital-text&field-keywords=Beyond+Luck+Langhorne&x=18&y=22