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The Modern Marketing Blog covers the latest in marketing strategy, technology, and innovation.

  • October 14, 2012

How Social Collaboration Can Change the 80/20 Rule [CHART]

Egan Cheung
Manager, Revenue Performance Analytics

If you are not already familiar with the 80/20 rule, or the Pareto Principle, it is a common rule of thumb applied in business to prioritize what 20% of causes can deliver 80% of the desired outcome.

I recently watched a TED talk by Clay Shirky on the role of social collaboration tools in business that made the statement: if your system is designed to give up on 20% of the value, you should redesign the system.

Here at Eloqua, we intuitively believe that, and we are using Salesforce.com Chatter as our internal collaboration tool.  We are also building Chatter inside Eloqua for our customers as a way of redesigning the marketing system of record to allow for ad-hoc collaboration, problem solving and sales and marketing alignment through social interaction.

But intuition is never good enough for the Chart of the Week.  I decided to look to see if the use of this tool actually does obey the Pareto Principle - and I was pleasantly surprised to find that it was!  The actual ratio is about 80/23 - so about 23% of employees contribute 80% of the social media interactions within the company.

80-20-rule

These 23% of employees might be considered the experts - usually longtime or senior employees - and in an institutional response to a problem, they would be the people that management would ask to solve 80% of the issue.  But - by redesigning the system we have also managed to capture good ideas even from the long tail of contributions.  Someone may be a new employee, but bring some great market intelligence which turns the tide in a deal.  Another might have only been at the company a short while, but in that time noticed and fixed a critical customer issue, saving an account.

In the era of social collaboration, the only thing that matters is whether or not an idea is good - not who came up with it.  The more companies turn over control of problem solving and collaboration to the crowd, the closer they will come to capturing 100% of the value of their collective knowledge.

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