The question of “leverage” can be tricky. Suppose we take the set of possible places to put one’s attention, calling this the set of possible leverage points. I (and others) have made the claim that typically 95% of the impact is gained by focusing on the best 1% of the possible leverage points (see Project Management in the Fast Lane, p. 140). Intuitively, we assume that this means (on average) a 95-to-1 difference in productivity between time spent on the top 1% and time spent on the rest.

Here’s a puzzler sent to me by my friend Lee Corbin: Taking the point literally, that a total of 95% of the possible benefits can be derived from addressing the top 1% of leverage points, what is the expected productivity ratio between a minute spent on the top 1% of possible leverage points, and a minute spent somewhere in the remaining 99%? Assume that activities are picked at random from those sets, and that on average the individual activities from both sets take similar amounts of time.

Now, using the same assumptions, do the productivity calculation based on the 80/20 rule (80% of the benefits come from 20% of the actions).

Here’s a similar riddle from Lee: Of two machines producing widgets, A and B, Machine A produces 40% of the total widgets but produces 70% of the defects. Suppose we do an experiment, and have Machine A and Machine B each produce one widget. What is the ratio of the probability that Machine A will make a defective widget, to the probability that Machine B will make a defective widget?

Answers next post.