When is “80% Good”, Good Enough?

Does the output need to be error free or is “80% good”, good enough? To be effective as an operations leader, and to successfully drive business results, we must understand when and how to apply these two different business concepts. We must execute with both quality and speed.

Error Free:

Error free outputs (e.g. documents, reports, online content) are just what they sound like – error free. The recipients or users of the output can assume that every data element has been checked and re-checked; that the information comes from a trusted “gold source” and that the data was pulled and massaged correctly.

Business outputs that must be error free include:Error Free VS 80% Good | Image Courtesy Of Digitalart

  • Financial reporting
  • Information that we use to calculate employee compensation and benefits
  • Customer facing materials  (marketing, contracts, invoices, websites)
  • Investor facing materials
  • Executive leadership facing materials
  • Patient diagnosis and treatment (in healthcare)

Error free outputs cost more because they require more time and resources to create. You may need to invest in better, faster software. You may need to invest in more personnel to quality check the content. You may need to invest in continuous process improvement initiatives.

There is also an opportunity cost. When your resources are focused on achieving 100% quality, their attention is not focused on other initiatives.

80% Good:

When a business output is 80% good, we consider it good enough to make business decisions and/or complete enough to move on to another business initiative. We choose to stop at 80%, because achieving an error free status is not realistic, is too costly and/or would take too long.

80% good often applies to our work that combines both art and science such as resource planning or “what if” model building.

Business outputs where 80% good may be good enough include:

  • Business analysis: When we analyze a number of different data elements, identify trends and make business recommendations
  • Process improvements
  • Internal communications
  • Internal project plans
  • Directional information

I recently worked with an employee on an 80% good analysis. When he first received the request, his reaction was “we don’t have all the data to complete this”, which was true. However, we had enough data to extrapolate missing data elements. We had enough data to answer the business questions in a directional way. And, we ultimately created a business analysis that was good enough for the process owners to make some very important business decisions.  80% good, was good enough for this business initiative.

Employees who just don’t get the 80% good concept, often have “analysis paralysis”. In an effort to reach perfect quality, they take too long to complete action steps and too long to make decisions. They can be very dangerous in a business climate that requires flexibility and change. It is our job as leaders to help them understand when perfect quality matters and when 80% good, is good enough. It is our job to model the right behaviors and execute while balancing quality and speed.

Does the business output need to be error free or is “80% good”, good enough? To be effective as an operations leader, and to successfully drive business results, we must understand when and how to apply these two different business concepts.

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© 2011 – 2012, Marci Reynolds. All rights reserved.

4 Comments

  1. Clear, concise, and spot on. I’ll add call center Service Factors. In my world, 80% of calls answered in two minutes or less becomes “good enough” when clients hear what it costs to staff for more and faster. Especially if you’re a start-up with low call volume.
    Thanks, Marci.

    Jeff Roberts
    Director, Client Services
    Inforonics Global Services, LLC
    25 Porter Road | Littleton, MA 01460
    Desk: 978-698-6526 | Fax: 978-698-7500
    jeffrey.roberts@inforonics.com | http://www.inforonics.com
    ITIL® V3 Foundations Certified

    1. Author

      Jeff.. Great addition. As I recall, many studies have been done to determine if investing in 85% or 90% answered in X seconds, versus 80% makes sense and impacts customer satisfaction or sales enough to warrant the cost. And, these studies determined that in most cases, that small improvement did not.. Instead, changes such as speed of problem resolution or keeping customers informed have a bigger impact. Caveat- depends on your product, service and competitive environment. Thanks for your comment!

  2. Another item that must be error free is information that results in lending decisions e.g. credit reports and due diligence information. Unfortunetly although this information should be 100% correct and free from defects, many companies are using “aggregated” data which is data that comes from many sources, it is manipulated, recompiled and raft with inaccuracies.

    I presented a case study to an organization that showed in only 25 names analyzed (choosen at random from work they had previosuly conducted with us) the data contained 181 errors. Their answer… no response to the report, and this is a top 5 national lending institution.

    As long as the lending and legal communities are willing to engage in a “race to the bottom” because data is cheaper than actually obtaining accurate results and can fulfill the millienials need for instant gratification perhaps we should be asking the question is 28% accuracy good enough? In the case of one bank it is.


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