The 70/30 and 70/20/10 Rules: How to Think Before You Spend a Dime on AI

AI does not fix a bad process. It just makes the mess move faster. Hello, and welcome to the Readiness Report. I'm your host, Dr.

Mike Donaldson. Today, we're going to be talking about some math. Don't worry about the math. It's not going to be that difficult.

We're going to be talking about two specific ratios. So related to AI, what's happening is people are asking the wrong question. They start off asking, Which tool should I use? But the right question is, how should I be thinking before I spend a dime on any tools?

That's where the two ratios come in, 70 -30 and the 70 -20 -10. But before we get into it, please take a minute and subscribe to the show, add any comments, and I'll be happy to get back to you and answer your questions. All right, let's dive into this topic. Here's a picture for you, for the problem.

A business owner has a subscription for AI. They try it out, they do different things, but it never works out quite the way they think, or it seems like it's a whole other job. So it just sits there doing nothing. The problem is, is they're viewing it like a vending machine.

You put money in, get productivity out, but that is not how it works. My background is in lean manufacturing. When you think about lean, you've got a fast machine that you want to put into your line, but your line is broken. There's something wrong in there that's not working right.

If you put a fast machine in, All it's going to do is make that problem even bigger and spread it through your entire process. AI is the same way. It doesn't fix a bad process. What you need to start looking at is your time.

It's about your time, the process, and the business before you even look at technology. This is where the 70 -30 rule comes in. So what I want you to do is think about this. Think about your actual work week.

Not your ideal one, what you actually do. If you think about it and actually do an audit for a couple of days What you could find is that 70 % of the work you do is work for the sake of work My examples are you're responding to emails. You're checking statuses. You're chasing down answers with people you're working on presentations Don't forget those presentation slides.

You got to keep those updated All right, you're spending all that time now all of this in the lean world would be called waste Not that it's not needed you have to do it, but it's it doesn't take your effort and all of your experience to do it. So that is the 70 % that you give to AI and you're going to protect the 30. That 30 % that's the work that as human beings we're good at it. That's your trust.

It's building those relationships with those clients. It's your judgment. on what the right course of action is. AI won't get the context.

We understand the context of what we're talking about and what we're doing. And again, those relationships, those are key. Talking to someone face -to -face, not in IMs, face -to -face or on the phone. Very different.

You build that trust. So think about this. I'm going to give you a story. We've all seen the cooking shows, and you've seen the chefs out there doing all their prep work.

They're chopping up the onions. They're doing the mise en place. They're getting all of the things ready. They're worrying about inventory.

They're checking everything to get going. That's a 70%. But the chef, where their taste and judgment is needed in that final 30, you're talking about the plating, what it looks like, whether everything is ready. It's up to their standards before it goes out to the table.

That's what you're really paying for. You're paying for that 30%. So the question is, are you spending your time on the 70 % of the prep work? or the 30%, which is where you shine.

Okay, so the 70 -20 -10 rule, that is about the implementation of the actual AI. Lots of people get it wrong. They go out and buy the tool, they hand over their 70%, and nothing changes. It's the same process, the same mess, nothing really improves, and they don't see the benefit.

Now the 70 -20 -10 rule, like I said, is just for implementation. 10%, that's your AI, that's your engine. Think of this as a car. You've got this great engine.

All right, but it's not going to go anywhere until it has the right fuel and the right roads to do it. OK, so you're 20%. That's your data. This is your infrastructure.

These are all your files, all your reports, all your customer information, all of these things that AI needs to know so it can do things correctly. If it's in somebody's head, it's not doing any good. It has to be digitized. For AI, they have to be able to access everything.

It has to be informative so they can find. So you need to make sure that your structure is ironed out as well. Now that 70%, this is your process and your people. This is where the AI will work or it doesn't work.

You can be running your entire system on outdated systems that go back to 2005 or older, and all you're doing is putting a coat of paint on cracked walls. It's not going to work. It's not going to work out well at all. Change management in this case is not soft.

This is the 70 % of the equation. I'm going to say that again for emphasis. Too many times we view change management as a soft skill. But when it comes to AI, it is critical.

Again, change management is critical to the process when you're in the AI. If your employees are not bought in, if they don't understand what's happening, they don't know how it improves them, the AI tools are not going to work. They're not going to adopt them. You could have your company that could just throw in copilot and say everybody's got copilot.

But if no one knows how to use it or what it could actually do for them, no one's really going to use it. OK. So let me give you some examples of where this AI implementation comes into play. Think of a doctor's office.

We all went to the doctor's office and go back in time, and you remember sitting there with the doctor. Lots of times they have their back to you. They're typing the information into the computer. They're asking questions.

There's very little eye contact and very little judgment on their part. They're just busy entering data. Now, let's change that and map it to a tool. The tool is your 10%.

The records are now The 20%, they're recording it. Go to the office now, and they have a dictation system set up where they can ask if they can record the conversation. So what's happening, they are recording everything that's being said. It can be logged, digitized, and recorded for future use.

So now, you are getting contact with the doctor. That 70 % is now happening real time. the entire doctor's office is now changed to where they have to change how they manage their day -to -day and how they manage the data. The AI system is taking care of it for them.

Okay, let's use the example of a real estate agent. They spend time talking on the phone, replying to emails, answering the same questions and all these repetitive tasks that they do. They're not involved in the negotiations. They're not meeting with their customers face -to -face and building relationships.

Now if they have that tool now the whole framework changes and they are able to really Accelerate above and beyond real estate agents that have not implemented those tools, but you have to have the foundation remember that So once they have that the other agents is not that they're doing anything wrong this one agent They just have the tools in place so they can use their time better. They've offloaded some of those mundane tasks so Where do you start? This is where you're gonna start getting some assignments from me Take two days Think about every task and write it down that you do all day Keep track of it and you're gonna put a number on it You put a 70 or a 30 the 70 % that is the stuff that's repetitive and Very doable by someone else the 30 % that's your creative side Those are the things that it takes your knowledge your experience to do that's the distinction now You've done your audit now Pick one tool and start.

Models don't matter. Don't get hung up on the models. Models change all the time. You could have Google Gemini.

You could have ChatGBT, GROK. What's the other one? Perplexity. There's so many of them out there.

Just pick one. What you're doing right now is you're just starting out to get a feel for how the AI can help you. It doesn't matter which one. They can all do it.

Models matter on specific tasks, but that's later on. That's when you're starting into AI agents, which is in our conversation right now. This is you picking your 70 % and getting started on one thing. Now you figure out how you hand that off to AI to do.

And here's the thing. Once you do this, the time you get back, You just got time back. Do not invest it in more 70 % tasks. Invest it in the 30.

Take a client out for coffee. Go out to lunch. Go face -to -face. Go meet someone.

Go network. Do something on those lines. Use it for creativity. Use it for figuring out that next product that you want to do, the next service that you want to provide.

But don't put it in the 70. This is all about working smarter and not harder. Okay, now you've got your plan, the four things that you're going to do. You're going to do your audit.

You're going to pick a tool to get started with. You're going to pick one task and figure out how to hand that off. And then you're going to invest that time in the creative aspects, the things that AI can't do. Now, remember, this is the key takeaways.

10 % is the tool. That's it. 70 % is the people in process. Don't forget the 20%.

The 20 % is your data. You make sure your foundation is in place before you build AI on top of it. If it's broken, it's just a fast, hot mess. So don't do that.

But 70 % on the people. Make sure that they're ready. Make sure you've embraced that. Another key point is that you need to know where you are on the map.

You've got to look around, get your bearings, and figure out what direction to go. You could be any place on the map, and you know where AI is, but you don't know how to get there. Take the time. Figure out where you are.

Lay out your path and get started. Take a path forward and see where you go. All right. So your assignment, like I said, two -day audit.

That's it. Track everything. Find your 70, protect your 30. All right.

That's all I've got, guys. So thank you all for listening. Please take your time and do a review. It helps me out and helps other people find me just like you did.

All right. I'm Dr. Mike. Thanks again, and you have an excellent day.