Is It Worth Using the 80/20 Rule & OKRs Together?

Nov 07, 2022
Is It Worth Using the 80/20 Rule & OKRs Together?

Every organization has goals to be met. The possibility of achieving these goals depends on employee efficiency and the strategies put in place. Recently, we’ve seen companies use the Pareto Principle (80/20 Rule) or the Objective & Key Result (OKR) approach. The question is, “can you combine both strategies to accomplish an organization’s mission?” Let’s find out in this article. 

What is the 80/20 Rule?

The 80/20 Rule (also known as The Pareto Principle/The Law of the Vital Few/The Principle of Factor Sparsity) is a concept that revolves around business and management. It is not a mathematical principle; however, it determines and focuses on projects with the most impact on productivity. It simply states that nearly 80% of aftermaths (or effects) are from 20% of causes. 

The 80/20 Rule allows business owners to prioritize what is most important in their organization for the best productivity or performance. In short, this principle will help manage business efforts effectively. 

How to Use the 80/20 Rule?

The 80/20 Rule is often used in business and management but can also be applied in other sectors. It is a principle that focuses on utilizing your efforts for the best output, which is clearly what most industries look forward to. Below are ways to use this rule. 

  • Business Productivity and Efficiency

When there are a series of tasks, employees are saddled with working on a project with the highest impact. The 80/20 Rule can help them determine which task has the highest potential for productivity. Besides, the choice will be after considering some important factors, such as budget, collaboration, and risks. 

  • Quality Control (QC)

Another way the 80/20 rule works is in Quality Control, involving the Six Sigma Methodology. It gives an insight into collected data and allows analysts to focus on the most important ones. 

  • Decisions

The Pareto Principle also aids decision-making. It helps identify challenges, so an organization can decide on a strategy to overcome them. This strategy sometimes often involves identifying the challenge with the most risk and developing a plan to solve it before the others. 

How Can We Link the 80/20 Rule with OKRs?

Objective & Key Result (OKR) is a strategy companies use to review and evaluate their goals and develop plans to execute projects for success. An OKR plan often has three to five aims/objectives and is targeted at focusing on what is most important for increased productivity. 

There is a direct link between the 80/20 Rule and the OKRs through the concept of KPI. 

Usually, 80% of the time spent in building an organization is the KPI and reflects every operational effort of employees. It can be used in individual assessment. On the other hand, 20% of time spent on developing an organization is the OKR, and it reflects the strategies used by the team. So, while the KPI and OKR are two different concepts, the 80-20 Rule links them.

In short, OKRs use a basic 80-20 principle for business productivity

Advantages of Using OKRs & 80/20 Rule Together

OKRs and the 80-20 Rule are two techniques often used in business and economics. They are connected, which means there are benefits to using them together. Here are some advantages to know: 

  • The two phenomena help businesses focus on high-impact tasks for growth, efficiency, and daily productivity. 
  • Both techniques help determine what is expected from employees regarding goals and mission. With clear priorities, everyone knows exactly what to do. 
  • They allow an organization’s team to develop collaborative strategies for success.
  • These techniques improve employee engagement through individual contribution. 
  • The 80/20 increases metrics by prioritizing strategies, while OKR increases value creation by focusing on results.

Is It Worth Using the 80/20 Rule and OKRs Together?

The Pareto Principle and the 80/20 Rule are unique techniques with the same mission. They focus on helping companies develop more interest in their goals by focusing on activities or tasks with the highest-rewarding potential. Combining both methods is definitely a great idea. 

Conclusion

Many companies have struggled with working efficiently and staying focused on certain initiatives. And while there are different teams or a team of individuals working hand-in-hand to fulfill the organization’s goals, there is only little success when the right strategies are not applied. So far, the 80/20 Rule and the OKR have been great for businesses that have used them independently. However, this article has shown what to expect if combined together. Work on this strategy and see the impact on your company’s daily productivity. 

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