Finding Your Inner Hulk: Uncovering the 80/20 In Your Association

This excellent blog post by Clemens Rettich really has me thinking today.  Clemens talks about the Pareto Principle, which many of us know as the 80/20 rule.  The 80/20 rule suggests that in our organizations, 80% of effects tend to come from 20% of the causes.  

While his audience is small and medium sized businesses, my head is usually in the association and nonprofit space, and (surprise, surprise) I think it is an interesting principle for our sector, too!

If the principle is applied to revenues, the idea is that the bulk of our money comes from a limited number of revenue sources. According to our recent NFP Pulse survey report on Revenue Generation, it seems to fit - Approximately 70% of revenues from the member-based organizations in this survey came from just three sources: Membership Dues, Conferences and Tradeshows, and Education.  Not surprisingly, the bulk of this  (45%) was member dues.

The Pareto Principle can apply to more than just to revenues. It can apply to other areas of your association as well. Marketing efforts, fundraising, sponsorship...Of course it doesn't apply everywhere and the breakdown is not always 80/20...but it does give some interesting food for thought.

After idenfying the areas in your organization where the rule applies, Rettich suggests focusing your resources accordingly. While you shouldn't ignore your 'weaknesses,' you should focus on your strengths. The result should be that while the 80/20 rule will still apply, you will be able to raise the bar in terms of the results you are getting, whether that be growing membership, increasing revenues or spreading awareness.

What do you think? Where can you apply the 80/20 rule in your organization? What can you do to focus your resources in order to raise the bar?

Hodgers photo via Flickr