Are your days so busy that you rarely get to the most important items on your to-do list? According to small business peer board members, success came easier once they learned to concentrate on tasks that matter, instead of spending time on trivial activities. They learned to harness ‘the 80/20 rule’ and if you follow their tips, you can, too.
It’s tempting to spend time on small tasks at the expense of the big ones. They’re easier to finish, for one thing, and it feels good to cross things off your list. But “doing” isn’t the same as “accomplishing.” The key is to prioritize your activities, so you’re investing your time and energies where it matters most. That’s where the 80/20 rule comes in.
“I found that with the 80-20 rule we concentrated our sales efforts on current accounts and potential accounts that would generate the bulk of our revenues.” says Pat Conway, President of Mr. Dee’s, Inc. of Libertyville, IL, Creator and Producer of Frozen Classic Potato Favorites that have delighted families across the county for decades.
Understanding the 80/20 Rule
You’re undoubtedly familiar with the 80/20 principle in one context or another.
The concept was first proposed by Vilfredo Pareto, a 19th Century Italian economist, as far as I know. After studying Italy’s economy, Pareto concluded that 80 percent of Italy’s income was generated by 20 percent of its population.
‘Pareto’s Theory of Mal-distribution,’ as it was first known, suggests that 80 percent of output comes from 20 percent of input. Turn it around, and it means that a small percentage of our efforts generate a large percentage of our results—a fact just about every PRO member has found to be true.
Apply the 80/20 Rule to Your Workday
Now, apply the 80/20 concept to the way you manage your time. Of all the activities you engage in on a typical day, what tasks create revenue for you? What is essentially trivial? Identify which activities propel you forward and which ones hold you back.
That “busy work” is destructive. Once you’ve identified it, you’re job is to figure out how to get it off your desk. Can you delegate it? Automate it? Outsource it? Forget it?
However, some of my PRO members find that there’s some ‘small stuff’ you can’t delegate. They’ve found that setting aside a fixed block of time to attend it, say, one afternoon a week, is a good way to keep it in its place. The goal is to keep your main focus—and big blocks of prime work time—to doing things that count.
Sometimes, we busy ourselves with small activities because we’re not sure how to tackle the big ones. In that case, create an action plan. Break a massive project down into small, concrete steps that you can tackle one by one. If you like crossing things off you list, this will work well for you.
Review Other Aspects of Business through the 80/20 Lens
It’s helpful to review other aspects of business this way, too.
For example, look at your customer base. What ‘20 percent’ of customers generate ’80 percent’ of sales? The actual number may vary, but the principle won’t. According to PRO members, the key is to analyze the characteristics that your best customers have in common, so you can target more prospects like them.
Or, consider what additional products or services you could be offering to these key accounts. How can you maximize the sales relationships that matter?
Or, study your workforce through the 80/20 prism. Are some employees doing the lion’s share of the work while others coast? Use this knowledge to manage your employees more effectively and ramp up productivity.
Put It in Writing: PRO’s 80/20 Worksheet
Your time and energy is finite. Applying the 80/20 Rule to your workday can help you use both more effectively. Be principled about it—put it in writing.