Pareto Squared a.k.a. The Corbin Corollary

The other day I was having breakfast with David Corbin of Dynamic Concepts Development and he used an interesting model to describe his target market.  David does enterprise software development projects.  Given that most enterprises have internal IT capability, you’d think it would be tough to get a foot in the door, but David has a unique niche based on an extension of the time-honored Pareto Principle.

As he puts it, 80% of the enterprise development work can be handled in house with existing resources.  Of the remaining 20%, 80% can be accomplished through modest extension of existing capabilities (e.g. training).  The remaining 20% (of the original 20%) involves complexity that requires breadth/depth of skills beyond the in-house capability or reasonable extensions thereof.  Hence his niche of opportunity. He calls it the critical “4%” (20% of 20%, or Pareto Squared).

What This Means For Your Business

I think David’s onto something here, beyond solving nasty enterprise software problems.  The rules apply to the enterprise as a whole.  If you want to be “innovative”, if you’re looking for “disruption”, if you want to break ahead of the pack, you need to be looking hard at the 4%.

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A Geek’s Guide To Staffing

They say if the only tool you have is a hammer, everything looks like a nail.  Since I started my professional career as a systems reliability engineer, everything looks like a system, including staffing models. Guilty.

Here’s my geeks-eye view on why hiring and retaining top talent is so important, and why “settling” is so detrimental.

Time-Sharing the C-Suite

I’m not the guy you want answering the phone if you’re selling Time-Share Condos.  For me there’s no value in spending every vacation, every year, in the same place – or spending a lot of time bartering for an exchange.  Vacation, for me, is about exploration new places, new experiences.  The whole time share model of predictability and stability of ownership at a fractional cost point doesn’t work for me… for vacation.

But, time-sharing does work just fine for me in my career.  And, it might work just as well for staffing your C-Suite.

Is Making Money Your Goal? Should it be?

When I was a kid, back in the Mesozoic Era, I worked a paper route for the home town newspaper.  Back then towns actually had home town newspapers.  Back then nobody was concerned about a nine year old wandering around alone in all kinds of weather, daylight and darkness.

I was an unlikely prospect.  Smallest kid in my grade, the delivery bag looked downright comical.  I was also a lousy salesman.  All my direct sales calls resulted in dead air or polite “no, thank you”.  When I focused on making more money, I failed.  Yet I managed to build the route from 25 to 125 customers.  It surely wasn’t salesmanship.  It was service.  It was striving for operational efficiency.

Now you might ask what a nine year old knows about about service or operational efficiency.  Well, nothing.  What a nine year old does know is grownups get grumpy when their paper is late or wet.  And, nine year olds are lazy (at least this one was).  One result was that I made damn sure I got dry papers, on time, to my customers no matter what.  The big result, though, came from being lazy….err, operational efficiency.

Never Play Defense

I like experiencing a sporting event live, in the home town venue. But when I was sitting on the “classic” wooden seats of Fenway Park, watching a long drawn out pitchers’ dual was not quite as satisfying as cheering  through a slugfest.  Likewise, a cold hockey rink is a whole lot colder when there’s no scoring going on.  Face it.  Defense is boring.  Defense is draining.  But defense is part of the game.  That’s because, in sports. you take turns.  Your turn for offense, then your turn for defense.

Business is different.  First off, there’s no limit to the number of teams in the game at one time.  Second, and most importantly, no one is taking turns.

Typecasting For Fun And Profit

My first job in High School was “employee number 5” of a startup making nautical navigation receivers. (Cool electronics for boats.) They were all smart people. They wanted to hire another one to put together the kits of parts to be sent to the assembly houses. (Outsourcing in the early 70’s meant mom’s stuffing components into circuit boards in a neighbor’s basement.) After a few painful months, I was fired. The task of counting exactly the right number of exactly the right parts and putting them in exactly the right bags and boxes was too much for this adolescent-undiagnosed-ADD-geek to accomplish. How hard can counting be? Was I really an idiot? Thankfully, the future would prove otherwise. However, I was clearly not the right type of person for that role.

You Can Be Right And Wrong At The Same Time

 I’m having a nice dinner with my wife in a small eatery in the City, when a customer comes in carrying a takeout food bag and begins ranting about how the order has the wrong food.  She wants her money back.  The owner looks at the receipt and at the food and sees the order and food match, and says so to the customer.  Things go rapidly downhill from there.

Just Because You Can… Doesn’t Mean You Should

I spent a lot of time watching “This Old House”, back in the day.  I also did my share of small hobby projects for friends and family.  But when I bought my own version of this old house to renovate, I got a rude awaking.  The first project was a bathroom Nuke and Pave.  I was going to save a bundle of money doing it all myself, because it was my house, and because I could.  I had the tools, and knew what to do.

A Startup Is Not A Business

I used to say I had worked in a number of startups. My first job ever, while still in high school, was with 5 guys making electronic navigation systems. Then there was a lifestyle company making cryptographic gear, a C-round electronic publishing firm and the ‘right at IPO’ workstation manufacturer. Throw in a few intrapreneurial ventures inside Fortune 500 companies, and I thought I had the whole startup/venture thing well in hand. I’d done business plans and managed scale in various functions pretty much focused on the transitions from quest to lifestyle to business, and even one exit. Then I started my own, with a couple of other guys. But the founding stage was totally different. In all the other cases, the companies had already attained a baseline business profile of revenue generating product, paid staff, established operational flow. With a startup, neither product, process nor people for the business are established. It’s all nothing more than an idea at this point. So, I started talking about having worked in innovative businesses rather than startups.

I came to realize that a startup is not a business. It is a hypothesis; a hypothesis with multiple levels of abstraction.

Drive Your Business Like A Racer

 A bunch of co-workers and I were caravanning to an off-site luncheon. After navigating busy roundabouts and traffic lights we arrived the restaurant and, as I got out my car, one of the drivers following me told me my brake lights were` out.  That’s not good, so we checked things out.  To his surprise, the brake lights worked fine.  “But I followed you the whole way, through all the traffic and your brake lights never came on”, he said. “Probably because I rarely use the brakes”, I responded.  My car had a manual transmission and I had used the engine, transmission and timing to travel about 15 suburban miles without hitting the brakes.

Big Thoughts In Thin Air

 This one’s from my first formal flying lesson.  After performing the preflight check, the instructor let me start the engine, taxi out to the runway and take off.  (Note: takeoff is real easy, landing is a little harder.)  Anyway, we’re puttering over the plains of north Texas at about 4000 feet when the instructor says “I bet you’re wondering what would happen if the engine died right now” and he shuts the engine off.  Well, I just looked at him waiting for the next piece of the lesson, and he was clearly disappointed that I wasn’t freaking out.

Moving Toward Perfection

I learned to drive in a car that didn’t have power steering. (Yes, I’m that old.) But that didn’t prepare me for my stint in the Air Force.  I was in a tactical unit, which meant we had to be ready to go anywhere and set up shop on short notice.  So all of our gear was either loaded on trucks or had wheels bolted on them.  And, since we had to be light and lean, we didn’t have a bunch of truck drivers on the team.  All us geeks had to pack and drive our own stuff.  That meant I had to learn drive a truck.  Two and a half tons to be exact.  “Deuce-and-a-Halfs” they were called.  And they didn’t have power steering either.

Team Building Is Shared Experience Under Pressure

Ok, I went through military basic training, disaster drills, fraternity hell week, and more than my fair share of corporate-team-building-off-sites. And they all seemed pretty silly at the time. The hazing, the overblown strictness and protocols, the seemingly pointless exercises. I wasn’t until I spent time with combat veterans, first responders and, yes, even startup founders that it all started to make sense. The fundamental currency of teams is trust. And trust is formed through shared experience under pressure.