Especially for SME – 5: Vital Few Trivial Many in Men. .

15 September 2021

SME



Mr. Lowe: Have you heard about a law called 80:20 or law of ABC?

SME 1: Yes, I attended a seminar on Materials management last month and they were talking about it.

Mr. Lowe: What did you get out of that?

SME 1: They said 20% by number of Materials account for 80% of our annual consumption value of materials and 80% by number of Materials account for 20% of annual consumption.

Mr. Lowe: You said it right: But what is annual consumption value, can you elaborate?

SME 1: The money we spend on the consumption per year of that item.

Mr. Lowe: Can you put it in the form of a formula?

SME 1: The quantity (the number) consumed in one year x its unit cost.

Mr. Lowe: Exactly! But have you ever thought that this is a universal Energy law and holds good for distribution of any resource in the Universe?

SME 1: No, I thought it holds good only for the materials I use in my industry.

Mr. Lowe: Let me explain: How many people you have in your organization?

SME 1: 20 people.

Mr. Lowe: Assume you have to do an important job on time and that also well: Out of these 20 people, how many you would feel confident would complete the job you have in mind?

SME 1: Of course, only one, Muniyandi.

Mr. Lowe: That makes it 5% of the total number of people you have and the result is 80% if not more. If Muniyandi is not available, whom will you pick?

SME 1: I will pick only whom I consider next best, Mr. Naik and if he is busy, I will pick Singh.

Mr. Lowe: What about any other jobs that need to be done on time and well?

SME 1: I always entrust them to these two or three guys and they get it done.

Mr. Lowe: That makes it 15% of people you have: It is true not only with you but with every other SME too.

SME 2, 3: Yes, it is true in our cases as well.

Mr. Lowe: It is true of not only SME’s but also large national and multinational organization in every one of their departments, functions, regions and the organization as a whole.

It is true in any Govt. and in the cabinet and the PMO!

There are only few effective people and many relatively ineffective people in any group of people. It is true amongst parents and children, students in a class, teachers in any school or college, and the heads of any institution, say for example, heads of SME’s, Govts., and Chief Ministers, Prime ministers and Presidents as well. (Can we say Vajpayee’s selection of Abdul Kalam as the President and the rest!). These few effective people produce 80% of the results of a department, function, organization, school or college or SME’S, states and Nations. I call these few (20% by number) - effective people Vital Few (vital = important, critical people) and the rest many (80 % by number of people) as Trivial Many people. This is the law of 80:20, ABC or Vital Few and Trivial Many law, VF-TM Law for men. It is applicable to men anywhere in the world. That is why I called it a Universal Law of energy.

So would you agree that the law of ABC or 80:20 works for men, a critical resource?

ALL SME’s: Yes, what you say in really true in practice. …..contd.

SME

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