Strategic priorities for employees deviate from the widely-employed Pareto’s law

During an organizational transformation, improvements must be dosed. Usually, an organization cannot change in lockstep: some teams and employees go faster than others. A more diverse and tailor-made target setting enables managers and employees to sufficiently transform while doing their day job and keeping their sanity.

When it comes to where to focus management attention on the topics and employees most behind the target, Pareto's 80-20 rule is the usual answer: Only 20% of X is responsible for 80% of Y. Although Pareto seems a very general approach, some studies in the literature claim that the idea that only 20% of employees matter can be more harmful than beneficial. Moreover, it still doesn't tell where to focus, only that there is an unequal relationship between input and output.

In this study, to verify whether Pareto's 80-20 rule applies to organizational transformation, we conducted extensive surveys during 320 different transformation projects covering almost 2,500 teams and more than 100,000 employees.

We found that we had to adjust Pareto's 80-20 rule to a "50-20" rule-of-thumb. Approx. 20% of questions and 20% of respondents covered approximately 50% of the improvement target. Additionally, the underlying visualizations developed in this study yielded benefits in transformation planning and knowledge sharing.