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The Pareto Principle, ABC Analysis and How to Manage by Exception


The Pareto Principle,
ABC Analysis and How to Manage by Exception

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The Law of the Vital Few

Ryan Howard, who plays first base for the Philadelphia Phillies, is a highly talented and richly rewarded professional baseball player. Howard’s most pronounced skill is his ability to hit the ball farther than most humans, which is perhaps best demonstrated by the fact that he hit his first 200 home runs faster than any player in the history of baseball.

Howard’s ability to hit the ball hard and very far – most typically to the right side of the stadium – induces opposing managers to alter the established “rules” of the game. Unless conditions of the game (such as runners on base) dictate otherwise, when Howard steps to the plate the second baseman typically back pedals into short right field, the shortstop jogs across the infield to play second base, and the third baseman abandons his normal position to cover for the shortstop.

Managers respond in similar fashion to a very select group of players who share Howard’s ability to change the game with one swing of the bat. Defensive positioning in baseball is typically a subtle thing, but when they face game-changing players, baseball managers tend to manage very differently.

A relatively small group of players (Ryan Howard, Albert Pujols and Prince Fielder are examples) merit these special tactics. Only a select few offer such dramatic potential to distort the game’s results. In one very typical season, just 25 players (including the 3 listed above) smashed 31% of the 2,373 home runs that were hit by National League batsmen.

In all likelihood the term “the law of vital few” has never been uttered in a baseball clubhouse. But by applying exceptional measures for these exceptional players, baseball managers are applying this principle. They are literally managing by exception. They recognize that a relatively small group of players – the vital few – can have an oversized impact on the outcome of their games. They manage accordingly, and by doing so, improve their teams’ chances of success.

The law of the vital few helps them manage what matters.

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