How do you know the vital few things you need focus on?
Last time we looked at the Big Rocks, the most important things in your day and life. But how do you figure out what those Big Rocks are and how many you need?
This time we’ll look at “The 80/20 Rule.” Have you ever heard of that? It’s also called the “Pareto Principle”, named after the Italian economist, Vilfredo Pareto, who identified it way back in 1896. He noticed that 80% of the land was owned by 20% of the people. He also observed that 80% of the peas in his garden came from 20% of the peapods, and so on. He was a very observant guy. He can help us be more observant too and on the things that really impact our lives.
It’s amazing how accurate that principle is, and once you are aware of it, you will likely notice it in your life, too: you wear 20% of your clothes 80% of the time so that means 80% of your clothes in your stuffed closet are only worn 20% of the time. You eat at 20% of the restaurants 80% of the time.
Now these statistics may not be precisely accurate. It may not be an exact percentage. It might be 78/22, for example, or 75/25 or some other numbers. But the concept holds true. So keep the general idea in your mind (that we get the biggest results from a relatively small percentage of what we do) as we go through a few more examples:
Statistics show, in various sports, that about 20% of the players participate in 80% of the big competitions; and out of them, 20% win 80% of the awards. And a study has found that 80% of crimes are committed by 20% of criminals. You get the idea.
So how do we apply that in the business world?
- 80% of a company’s profits come from 20% of its customers
- 80% of a company’s profits come from 20% of the time its staff spent working
- 80% of a company’s revenue comes from 20% of its products
- 80% of a company’s sales are made by 20% of its sales staff
You can see how that helps you see the need to take care of those vital 20% of your customers, products, staff and sales people!
The most significant results come from relatively small causes.
The one I like and use most is that 20% of an 8 hour day is 96 minutes. That means if I focus and do the most important things in that time, I will get 80% of my results and that’s a big return! Then I can do the other things I want and need to do without guilt or stress! I love that!
So it would be time well spent to identify the critical elements that bring the biggest return to your business. This helps you see yourself more objectively, and the value you bring—typically, your unique contributions that no one else does quite as well as you. Then focus on those VITAL FEW.
And that means that you will want to notice the things you DON”T want or need to do. It makes it easier to eliminate the low-value items that are likely wasting your time and energy. You might delegate them or eliminate them entirely.
Then FOCUS on those VITAL FEW. Give them your best time, thought and energy. Make sure you get to your focus time as early in the day as possible (so it doesn’t get gobbled up by other things). You can do it in one 96-minute session, or it’s probably better break it down into 30 or 60-minute segments with breaks in between. Just do it and watch your results compound, thanks to the strength of your VITAL FEW!
Remember, you don’t have to get everything done—and we really can’t. That’s a reality check. The 80-20 Principle helps you know what you must do to get the results you want—and save time in the process for what you would really like to do!
There are several books by Richard Koch that analyze the 80/20 Principle and its application in much more detail. If this piques your interest, you may want to read one or more of those. Tim Ferris, the best-selling author of “The 4-Hour Workweek” called the 80/20 Principle a “cornerstone of results-based living.” And the results are what it’s all about, right? So enjoy exploring your VITAL FEW!