You’ve heard of the 80/20 Rule, haven’t you?
Otherwise known as the Pareto Principle, the 80/20 Rule is one of the most frequently used methods for improving efficiency today. The basic principle is, for example, that 20% of your efforts reap 80% of your rewards. Consider this: 20% of your sales force brings in 80% of your sales, or in other words, 20% of your work will bring 80% of the results.
Interesting, isn’t it?
Is that true for every company? Maybe not for every organization, but you’d be amazed at how accurate it is overall.
“Drive thy business or it will drive thee.” – Benjamin Franklin (1706 – 1790)
How do you apply this principle to your company? Simply recognizing that a small percentage of your overall work is providing the biggest results can open your eyes to habitual time wasters and lost “holes” in a day, resulting in a huge boost in productivity. Focus on the 20% that is producing results. Reward and show value to those employees who make things happen. Pay special attention to your key clients, and they will help your business grow through increased work and referrals. Identify what makes up that 20% in your business, and make it even better.
Now, let’s look at this in a slightly different way.
What would you say if someone told you that 80% of your problems come from 20% of your employees, clients, etc.? It’s pretty typical that in many businesses, a mere 20% of any component of your business causes 80% of your headaches. Apply this to examples such as tasks, clients, contacts, vendors, staff members, projects, etc. and see what you come up with!
So, that’s a problem, right?
It sure is, but what do you do? Your job is to fix the issues by either finding solutions or completely eliminating that 20% that is holding you back. Don’t waste your precious time and effort desperately trying to hold onto that 20% if it’s not going to come around. Sometimes you have to take a step back in order to move forward. Let it go so you can use your precious resources to find new clients, prospects, vendors, etc., who will bring you to that next level.
The core value of the Pareto principle is to recognize that most things in life are not distributed evenly. You’ll be successful when you make decisions on allocating time, resources and effort based on that principle. Focus your energy on that critical 20% that will give you the most bang for your buck, and don’t knock yourself out over the other 80%. Focus on the things that make you successful and happy and give you the greatest return. Then, determine the characteristics that work well and figure out how to replicate them. It’s well worth the extra effort over the long term.
“To succeed as a team is to hold all of the members accountable for their expertise.”
– Mitchell Caplan, CEO, E*Trade Group Inc.
