3 Pareto, performance, and Motivational Maps

We are happy when we are in harmony; according to the Tao Te Ching,¹ in harmony with the Tao. The Tao is the Way – essentially, the natural flow of the universe and how it operates. It is an impersonal force according to the Tao Te Ching, but there is no problem in calling this ‘God’ if one wishes to. The point is that the universe conforms and complies with certain rules and principles and when we violate these we suffer. A simple and obvious example would be committing murder: all human societies have condemned the practice since the beginning of recorded time; and that murderers suffer is not only because if they get caught they are punished, but even if they are not caught history and literature provide ample testimony to the torments of the mind that they become prey to.² With this in mind, then, are there any natural laws of the universe that we inadvertently fail to respect or act upon? Laws whose existence we do not acknowledge or ignore, or whose tenets we flatly contradict or believe the opposite of?

There may be several³ but there is certainly one which has huge ramifications on our everyday life, and on coaching practice in particular. One of the major issues affecting nearly everybody as a negative subconscious belief is that the universe works in a 50/50 way. Put another way, this means that all causes and inputs are more or less equal in terms of their symptoms and outputs. Again, a simple example illustrates the point: say, we get 100 (or 1000!) emails in our inbox and we wade through them as though they were all equally important, each one gets more or less the same amount of our time and attention. If that happens, then we are working on a 50/50 assumption about the nature of reality! We say IF it happens but in truth that is exactly what is happening all the time, since most of the time we are – unless we are incredibly disciplined – on some sort of automatic pilot or habitual mode of working whereby we deal with things as they turn up. In short, we may have heard of the Pareto Principle or 80/20 Rule as it is sometimes called, but very few people (surely less than 20 per cent?) do anything about it (see Figure 3.1). Some emails are much more important than others, and often that ‘some’ is about 20 per cent of the total. So, the universe works in an asymmetrical or 80/20 way, not a 50/50, all-things-equal way. Things are not equally important. If we wish to be effective, we have to identify the 20 per cent of activities that cause or create 80 per cent of our overall results; and if we go further and ‘80/20’ the 80/20 we realise that 4 per cent of inputs will generate 64 per cent⁴ of outputs. If we are going to coach effectively this is an astonishing statistic to get our head round for the client.

Figure 3.1 Pareto 80/20 effort v. outcomes

But from a performance, and so from a coaching perspective, this principle, like Motivational Maps, is a key pillar of effective coaching. Because we cannot do everything, there is an ongoing necessity to prioritise, and this prioritisation requires that we think; and particularly that, as Richard Koch⁵ puts it, we “think 80/20”.

Let us be clear about this now: 80/20 is not an exact figure. The percentage of inputs may vary, and indeed it is a primary purpose of coaches to skew this ratio. (And they do this by the intervention of coaching.) Though the starting point might be not 80/20 but 70/30 or 60/40 or 90/10 or 95/5, whatever it is, it is not 50/50. It also needs to be said that whilst the Pareto Principle holds true in most life and business situations, there can be exceptions. It is generally true, for example, that for most businesses 20 per cent of the customers generate 80 per cent of the revenues; but that probably doesn’t work in, say, the supermarket model⁶ where 20 per cent of customers probably do not account for 80 per cent of revenues. But as far as coaching, consultancy, training and other service industries are concerned, it is uncannily accurate, as it will be for most sectors and most non-commodity businesses.

With this in mind then, let us return to performance. We saw in Chapter 2 that performance has three elements to it: Direction, Skills (an umbrella term which includes knowledge too), and Motivation. When coaching clients, coaches can focus on all these three elements equally. Clearly, however, for themselves and their business, the most important element is Direction (as discussed in Chapter 2) as this will help to develop a relevant business model. But working within organisations – and career coaching aside (see Chapter 7) – often the performance issue is only really down to two elements: Skills and Motivation. Why is this? Because the Direction is often set by the organisation, and embedded in detailed business and strategic plans whereby there is not a lot of room for individual manoeuvre or even input. Clearly, the more junior you are, the less influence you generally have anyway on direction. But even at senior level, one might simply be committed to following the plans the Board or Senior team has formulated. Thus, performance comes down to two elements: Skills and Motivation.

We can express this in a simple formula (see Figure 3.2)⁷:

My Performance Rating (PR) is:?? per cent … What does this mean to me?

The Pareto Principle can help us to understand what this means. But, before we get to that, there is one other interesting aspect of this: we can rate ourselves and self-rating can be very accurate, but in order to get an even stronger grip on how we are performing, how do other people rate us (see Figure 3.3)?

Figure 3.2 Performance is: Skills times Motivation

Figure 3.3 Performance assessment table

Of course, it’s all very well scoring yourself on your generic motivation rating; there is also an easy way to check this – by doing a Motivational Map and converting the PMA percentage score into a number out of 10, simply by rounding it up and down: so 74 per cent would be 7/10 and 75 per cent would be 8/10 and so on. But is the Skill rating not more complex? For, though it is true that we can consider the overall impact of our skills (and knowledge), at some point we recognise that we need to isolate more exactly what these skills are and then carry out another rating for each one individually.

Figure 3.4 Coaching skills table

What are, then, the key skills of coaching?

Note: if the Pareto Principle is true, which it almost certainly is here,¹⁰ then of these 10 key coaching skills, 2 or 3 (that is to say 20 or 30 per cent of them will be mission critical and more important than the others).

Keep in mind that although there may be some skills/knowledge that all coaches¹¹ will need to have, it could also be the case that you as a coach work in a niche area in which some seemingly unimportant skill or knowledge area becomes of critical importance. For example, personal coaches who work in the sports arena may well need as a core component either knowledge of health and physiology, or even of a specific activity or game to function at the highest level. Or both!

But we return now, then, to the question of what does this all mean and how can it help us coach effectively? The first important thing to grasp about the Pareto Principle is in the numbers: 80/20. This is a 4:1 ratio and it suggests two important things that everyday experience bears out.

One, that it means the top 20 per cent of the workforce will produce 80 per cent of the results; conversely, two, the other 80 per cent of the workforce will produce only 20 per cent of the results. You need to reflect on the enormous and (for most businesses) unwelcome implications of this.

The maths goes like this:

and

So

In other words, some employees (and for that matter coaches and managers) are up to 16 times more productive than others. Since we know that productivity is a function of performance,¹² then we know also that Skills and Motivation are core to being productive. Being productive, of course, is the central benefit that organisations want from their employees; and employees want that benefit for themselves because it boosts their own self-esteem as well as their career and earning prospects. Furthermore, this ratio of 4/1 and 16 times gives a clue as to how to frame this information: if at the extremes someone is 16 times more productive than another person, what ‘rating’ is the average person going to be? The answer is clearly 1: the average person is going to be 1 times more productive than the average person! Which is 1. So, 1 is the midpoint between the performance extremes of 4 and ¼ (4 × ¼ = 1; 4 ÷ 4 = 1). So truly productive people are 4 times more productive than the average person, and up to 16 times more productive than the least productive person; keep in mind that this number holds more constant the larger the number of people we are dealing with, and we have already said that 80/20 may skew to be more – 70/30 – or less that way – 90/10. But with that in mind, we now have a scale on which to rate performance as a function of skill and motivation.

Skills/Knowledge and Motivation are for rating purposes either at below average, average, above average, or optimum (see Figure 3.5):

This language may seem dry and academic: average and optimum. Some people find it easier to correlate the numbers with more emotive language. It is not important which words you choose especially, so long as one is consistent. Figure 3.6 shows our favourite interpretation of the four rating numbers:

Figure 3.5 Skills and Motivation four-point scale – generic language

Figure 3.6 Skills and Motivation four-point scale – specific language

Note that ‘average’ has now become a ‘good’ (for skills), a much more emotive and positive word. People prefer to be good than average; but we need to be clear about what we are saying here. Actually ‘good’ is often average. We say, ‘good job’, or ‘you’re doing a good job’, and usually what that means is: you are simply doing the job as it needs to be done. The problem with it is: doing a good job, at organisational level, is never ‘good’ enough. It always withholds that extra discretionary effort that is at the heart of what is called engagement. It also leads employees to become very frustrated and disappointed by their employers: they are told that they are ‘good’, but there seems to be no extra remuneration or reward for being good – which is to say, simply doing your job properly. And from the employers’ perspective, why would there be? ‘We’ pay you to do the job; you do it – that’s the deal. Why does that entail extra rewards? That’s their reasoning. Hence ‘good’ is good but we need to understand that it really means average.¹³ And it is the job of the coach – or the manager internally – to increase the performance of the individual by shifting the Performance Rating score upwards by either enabling the client to acquire more relevant skills and knowledge, or by increasing their motivation, which leads to an increase of energy. Or by doing both simultaneously.¹⁴

However, there is a missing number here, which is 0. Zero, however, is not a number; it is an absence – no performance at all. So what we are saying in the scale of performance – and actually of motivation and skills too – is that there are four levels AND +1, where ‘+1’ is no performance at all. And no performance at all can result either from a complete lack of motivation or a complete lack of the necessary skills and knowledge in and for a specific role. We have all doubtless seen just such an eventuality in action many times before: but people who cannot perform at all are usually quickly shown the door, or run businesses that fail almost immediately.

If we now then plot Skills/Knowledge against Motivation, we can create a Performance Rating Index (see Figure 3.7).

For the coach, what we want to do is to help the client generate a Performance Rating (PR) of ‘4’; in other words, to be totally on top of their game: fully motivated and wholly equipped with all the right skills and knowledge to do their job or perform their role effectively. Therefore, the question becomes what is the issue – Skills or Motivation – that is holding the client back? Where do they sit on the Rating Index? Indeed, where do you, in your current position, sit on the Rating Index?

One, of course, can ask a manager for their view of their employees from a skills or motivational view point at the first meeting. Ideally, however, you will want the employees (and the manager) to have completed a Motivational Map. This will reduce even further the guesswork as to which motivational quadrant the client is actually in; and it will certainly be more accurate. For managers often do not see

Figure 3.7 Performance Rating (PR) Index

Figure 3.8 Positioning clients on the Motivation–Skills grid

either what is really motivating an employee or how motivated they are; seeing whether they have the skills or knowledge to do the job is much more visible and evident. But with motivation people, not just at work, put on a front or face and show what they think their boss (or their partner or their friends) wants to see. We have regularly in our own practice as coaches come across managers and bosses who have been shocked by the actual level of motivation revealed by the Map: they thought, for example, their ‘star’ member of the sales team loved their work, and certainly had been pulling in the results, but the Map had revealed that they were running on empty. Yes, they had the skills to do the job effectively, but increasingly their heart wasn’t in it; they were faking it to try and make it, and invariably had some exit plan they were going to implement in some short order soon!

If we look at Figure 3.8 again, we see imposed alongside the Y axis of motivation the four quadrant image that appears in all Motivational Maps on page 13 of the report. And just as we have said that 80/20 is not exact, but a varying approximation, so here with the four quadrants, we need approximations to reality to describe what is going on. But in essence the four quadrants, descriptively, become zones of motivational energy. The top level, which is 80%+, is called the Optimal Zone. The challenge of being in the Optimal Zone is to stay there; there are so many drains on our energy. How do we minimise them and stimulate the activities and events that genuinely boost our energy? The second level, from 61–80% motivated, we call the Boost Zone. This is a high level of motivation at the top end, but clearly trailing off as we approach the 61% mark. It is called Boost because we do need to boost this person’s motivation to get them into the Optimal Zone, or simply to get them higher within the Boost Zone itself.

60 per cent is the actual crunch point. We are in the third zone, the Risk Zone (35–60%). Seemingly, 60 per cent is quite a high score – a good score – but as with ‘good’ before, it is average and people at this level have certainly lost their ‘mojo’ for work and what they do. One or two of their top motivators are no longer being fulfilled in a meaningful way; they are in fact at risk of becoming demotivated. To be kind we could call this a ‘good’ level of motivation, but, in reality, it is a falling away of the essential, brim-full levels of energy we really need to achieve anything great.

In zone 4, the Action Zone (10–34%),¹⁶ we truly are not motivated at all. In truth, this is a state of motivational torpor and it is very dangerous for our health if we stay in it for a long time. That is, if we are in a job/role that totally does not motivate us, fails to ignite our emotional fires, goes contrary to how we feel and what we want from life, and so on, then the inevitable will happen: We become stressed and our well-being suffers. And, although people have differing levels of inner resistance and resilience, prolonged exposure to this sort of situation will lead to breakdown or illness of some sort. So this is called the Action Zone because it is imperative for the client and for the coach to understand radical action is necessary to change this situation; and this radical action has to include the possibility of quitting the role as well as any other major shift or focus.

With this in mind, then, if we now look at Figure 3.9 we see how the Motivational score from the Map can be translated into a Pareto score for the purposes of using the P = S × M formula.

Figure 3.9 Converting Motivational Map scores to Pareto rating scores

One central purpose of coaching and of the tool, Motivational Maps, is to skew the Pareto Principle. As we said before, it is almost impossible to get the Pareto ratio to be 50/50 – only a tiny company could do that and probably only for a short time: it would mean everybody is equally productive! The larger the company, the more they revert to the 80/20 mean. But we can – through interventions like Motivational Maps and its reward strategies, coaching and training – skew the 80/20 to 70/30 or even 60/40: this has a huge impact on productivity and the bottom-line.

Take the typical ratio of 80/20. If instead of 20 per cent producing 80 per cent, we had 40 per cent producing 80 per cent and 60 per cent producing 20 per cent we will have double the number of people being productive – in short the 100 per cent is going to be a much bigger cake!

To get, then, a sense of how important this is, and what it might mean for the bottom-line of an organisation, whether commercial or not-for-profit, we need to consider this. The PR – the Performance Rating – has implications for the finances of any company. If you recall our discussion regarding the PR of 1, the average, then it stands to reason that the average organisation pays the average employee an average salary or wage that is, pretty much exactly, what that person is worth to the organisation. In short, the average person is paid to be productive and to produce more in productivity than what they are paid. If they are not more productive than their salary, then the organisation will quickly become bankrupt because they will be paying more in salaries than they are achieving in productivity gains.

With that in mind, let’s consider the client who is an employee. Tony works for XYZ. The total costs of employing Tony are, say, £40,000 per year. Total costs mean salary plus National Insurance, pension contributions etc. – everything it costs the organisation to hold onto Tony.

If Tony were an average – good – employee his PR would be 1. He would be doing his job and adding some value. We could frame his position like this as in Figure 3.10:

But suppose that we coach Tony and his motivation or his skills improve as a result. What then? His skills improve or his motivation increases, so his new PR is 1.5. What then?

So now we can add more details (see Figure 3.11):

Figure 3.10 Map client Resource Valuation

Figure 3.11 Map client Resource Valuation (RV) increase

If we consider Figure 3.7 again we can see that the possible multiples include: 0.25. 0.5, 0.75 which would all mean someone performing below the average and thus making a loss for the organisation; to 1, which is average; to 1.5, 2, 2.25, 3 and 4, which all mean substantial productivity gains.

The calculation also gives us a way of seeing clearly who is productive and by how much; and also following the coaching intervention, who can grow and improve, and who cannot. This is priceless information. It may be objected that this is subjective, since the PR is subjective. But is that really true? We base the motivational score component on the actual Motivational Map where we have a perceived Face Validity accuracy score of 95 per cent; that’s pretty accurate. And as for the Skills assessment number, how likely is that to be wrong, since from the dawn of management, managers have been accurately reckoning the relative strengths of their employees’ skills and knowledge and spending billions of pounds a year to get staff up to speed? All in all, then, carried out without prejudice, this is likely to be a highly accurate picture of the performance profile of the client.

There is one final aspect of this P = S × M formula that is worth commenting on. That is, the curious and unexpected effect of the multiplication of the numbers. If, for example, we think the client’s motivation is 60 per cent or 6/10 – the Risk Zone – and their skill score is 6/10 or 60 per cent, average or good too – then the actual performance is not 6/10 or 60 per cent. It is 6 × 6 or 36 per cent! And if we put this in Pareto terms, this becomes 1 × 1, which is JUST in the third zone, so is still 1, but it is at the bottom end of it. The 10 scale gives us here a finer tuning; but the drift is clear – the multiplying factor dilutes performance, and so it is critical, first, for the coach to understand that if they wish to get their client into the Optimal Zone of performance, the lowest scores that make that possible are 9 and 9.

Look at the grid in Figure 3.12 and ask yourself how you can improve your scores in the three top motivational areas and the three core skills that you have identified as being critical to your business.

Your top three motivators will be established from your Map profile, along with a score out of 10 for each one of them separately on page 13 of the report. If you have scored 10/10 for any one or all of them, then you clearly cannot improve on that, but you might ask yourself how you can maintain it – keep in mind that motivation is like health or fitness: it has to be continually worked on. And regarding your skill set, which you addressed in Figures 3.3 and 3.4, then be clear about what being 10/10 in terms of skill/knowledge really means: ask, am I comparing myself against others, a normative assessment, or against some fixed standards, criteria referenced? Even if at 10/10, think 80/20: the next iteration of the 80/20 on the top 4 per cent of performers. That would mean being not in the top 4 per cent but the top 0.8 per cent! The Pareto Principle suggests that the top 0.8 per cent reap over 50 per cent of the rewards¹⁸ – so a dedicated commitment to becoming even better than the best one can be has tremendous implications for future rewards.

Figure 3.12 Performance Action Plan

Finally, and briefly in this chapter, it would be inappropriate not to mention a cousin of the Pareto Principle, namely, Kaizen,¹⁹ since it has profound coaching implications. Kaizen is a process of continuous improvement in which over a long period of time one seeks to make small, incremental improvements to processes or systems in order to improve their efficiency or quality. The Japanese spectacularly used this idea, especially in their automotive and electronics industries, to become world leaders in their fields. It should be clear why this is a cousin of the Pareto Principle: It’s finding what appear to be small, sometimes inconsequential items, and improving them that can lead to massive gains. In short, the 20 per cent – or even 1 per cent of inputs – that can make the big difference to the outcomes.

So far as coaching goes this is important because one aim of the coach is to get the client to adopt new habits or rituals that are more helpful to them than the ones that led them to their issue. We talk about the client taking action – see Figure 3.12 for a standard case of ‘actions’ that follow the coaching process; but how do these positive actions become habits or rituals (like cleaning our teeth every morning) that we do without thinking? The trouble is, we know from our own experience that we commit to doing something – like dieting, exercising, studying the financial accounts, making the sales calls, confronting the difficult employee, etc. – and we do it once, but then we fall away from making it our consistent practice. Usually, this is because the ‘ask’ is too much and we despair of keeping going. Forming new habits or rituals, then, is a key element of successful coaching.

Here’s where Kaizen helps, for it can enable us to shape small, micro-habits that produce awareness, micro-practice, repetition, progress and a deeper level of embedding the required behaviour. In his One Small Step programme, Dr Robert Maurer²⁰ provides from Kaizen perhaps the most brilliant question of all that a coach (and self-coach) can ask themselves which propels one forward:

Key Kaizen Question:

And then one does that step for as long as is comfortable. Then, increase the step – do more – and build up. Suppose fitness were an issue. We don’t start by committing to a marathon run, or swimming a mile front crawl. We start with something really small – like walking to the local shop where before we used to take the car; or doing one length, or width even, in a pool (based on where we are now) – and persist at doing that. This has a remarkable effect on our resolution and stick-ability. Over time we find so much is possible in terms of new habits, patterns of behaviour, and our ability to change positively.

Summary

1. We are happy when we are in harmony with the natural flow of the universe.
2. The Pareto Principle states that 20 per cent of actions (approximately) will deliver 80 per cent of your results.
3. Performance is a combination of Direction, Skills, and Motivation.
4. For many working within an organisation, where direction is clearly set from above, this can be simplified to Performance = Skills × Motivation.
5. Some employees are up to 16 times more productive than their colleagues.
6. Using a Skills and Motivation four-point scale allows focus on where improvements really need to be made for each individual and gives an indication of its potential impact.
7. For true performance we need both highly motivated and highly skilled individuals.
8. Kaizen is a process of continuous improvement in which over a long period of time one seeks to make small, incremental advances.
9. Forming new habits is a key outcome of successful coaching; and facilitating a client’s awareness of the smallest possible step aids this process whilst minimising potential fatigue or concern of failure.