I’m sure you will have heard of the Pareto Principle by now (also called the 80:20 rule) but if you haven’t:
Put simply most of your outputs come from a small amount of inputs. It isn’t always 80/20, it could be 70/30 or 99/1. It doesn’t have to add to 100, it might be 80/30, but the principle remains the same. The practical effect of this is to mean that if we can identify our most productive efforts and (a), drop the rest and (b) scale up we can massively increase our results. Think about it: The 80% of least productivity is 16 times less efficient than the 20% most productive.
First problem is to make sure that the 80% can be dropped. This will probably include:
- Stuff that shouldn’t be happening (liking cat videos on you tube, or playing angry birds)
- Stuff that should be happening but not to you (answering phone calls, writing letters)
The first should be eliminated and the second delegated.
Getting back to Pareto though the rule has consequences that are often overlooked.
If 20% of effort yields 80% of results then 80% of that 20% will yield 80% of 80% of the results; and so on.
That means
20% yields 80%
4% yields 64%
And approximately 1% yields about 50% of the total results achieved.
This has very important implications for how we should spend our time. Note that just because some activities are worth 16 x (or more) they may not be immediately obvious because they generate no money directly. However their long term benefit may be huge. Developing a new product perhaps or taking time out to write a system that your staff can follow (allowing you to do something else that’s more valuable)
Have a productive and happy week
Paul