It can be very frustrating when you put all your energy into a business only to see it plod along, especially if the business is something you believe in. I’ve been there. I had all the makings of a fantastic business but I just couldn’t get it to gather momentum. It made no sense as to why I couldn’t as it was an innovative concept, it was current, I had passion and determination, and there was what I believed to be a solid business plan in place. But no matter how hard I tried, it just wasn’t working – until I learned about the 80/20 rule!
If you are in business you would do well to understand the 80/20 rule. It will save you a lot of time, energy and cash!
The 80/20 rule basically refers to the law of “the vital few”. In the language of a straight talker that means that not every activity done in your business will get youthe results you want and not everyone within your business will perform the way you want. The reality is 20% of the activities done within your business will account for 80% of your results. 20% of your customers will account for 80% of your sales. 20% of your products or services will account for 80% of your profits. 20% of your tasks will account for 80% of the value of what you do. 20% of the people within your business will deliver 80% of the results, and so on.
The make or break for your business is whether you identify the “20%” and whether you place priority on the 20%. For example, if you have a list of ten activities to do, two of those activities will turn out to be worth as much or more than the other eight activities put together. The ten activities may take the same amount of time to accomplish but one or two of those activities will contribute much greater value than any of the others. These two are invariably the activities that you should do first. The payoff for completing these activities properly can be huge so prioritise them and refuse to work on activities in the bottom 80% while you still have activities in the top 20% left to be done.
The question you need to ask yourself when faced with a task is: “Is this in the top 20% of my activities or in the bottom 80%?” If it is in the top 20%, treat it as a high value activity and do it first. It may be the hardest to do but get it done first. The other activities will then be much easier as it will give you clarity on a way forward. In some cases the other activities may not even be useful!
Important versus Enjoyable
It is very tempting to do the nice things for our business, i.e. the easy enjoyable tasks. But sometimes the other activities, the ones we don’t like or the ones that are the most difficult, might have to be completed first, if we are to get positive results overall. The key to making this easier is in recognising what’s most important and recognising what to do after that. Productive people discipline themselves to start on the most important activity first, even if it’s the least enjoyable. As a result, they accomplish much more than the average person and they have more peace of mind due to the clarity and organisation they establish from doing what needs to be done first. Here is a useful 80/20 exercise that you can use to make sure you are at your most productive.
1. Make a list of all the key activities, tasks and responsibilities in your business.
2. List them in order of importance, i.e. which of them are likely to be in the top 20% of what will represent 80% of your results?
3. Decide the amount of time you will realistically allocate to each activity, responsibility and task.
4. Graph it!
Graph your working day in 30 minutes increments of time (See morning example below), and commit to the 20% activity written in that allocated time slot only, leaving all other activities aside until you complete the most important activity first and so on. If you find yourself jumping between activities or spending longer on one than time has been allocated for, stop, review your graph and get back on track. This system will keep you super focused and the results will show!