The 80/20 Principle: The Secret to Achieving More with Less

by Richard Koch

Clearly, it is crucial to hire only net value creators: those whose value comfortably exceeds their cost. But it would be wrong to say you should only hire the best. The most excess value is created by employing as many excess value creators as possible, even if some of them are only twice as good as the average whereas others may be five times (or even more) as effective. Within your own workforce, there is still likely to be an 80/20 or 70/30 distribution of effectiveness. The greatest absolute surplus value may coexist with a fairly skewed distribution of talent. The only requirement is that your least supereffective employee still adds more value than he or she costs.