Although it has been talked about again and again in business circles, the 80/20 rule never ceases to amaze me. You may be amazed too. If you’re not up to speed on the 80/20 Rule yet then
read on. You may also know it as the ‘Pareto Principle’ after Vilfredo Pareto who made the interesting discovery that people seemed to split into the top 20% ‘movers and shakers’ (both monetary and influentially) and the bottom 80% who could be defined as ‘followers’. This was just the start though, as through further research he (and others) discovered that most economic activity followed this model as well.
One thing I noticed years ago, when I worked in manufacturing distribution was that 20% of our distributors were responsible for 80 % of the sales throughout the UK. That, additionally, 20% of the distributors were responsible for 80% of the headaches! Having worked with many other businesses too it is also rather uncanny but interesting to note that:
20% of your sales team are likely to be accountable for 80 % of your sales results
20% of your own time is likely to give you 80% of your productive results each day
20% of your own client base will account for 80% of your sales
20% of your products will return 80% of your profits
20% of your own client base will likely give you 80% of your daily/weekly hassle!
20% of each of your team member’s time is likely to give 80% of their results too
The list goes on and on and becomes more interesting as we look more deeply into each business model. Interesting because once we focus on these areas within our businesses you may find that you start to see patterns emerge that you hadn’t noticed before…
So how could this principle be really powerful for you?
Imagine, for a moment, if it were possible for you to be another person looking at your own business from the ‘outside in’. A third party look at your business, your team and yourself, if you like.
Consider three headings: ‘my business’, ‘myself’ and ‘my team’ and under each heading (bearing in mind the examples given above) how many variations of the 80/20 rule can you spot in your business, yourself and your team?
Once you have exhausted your thought in these areas, then why not try this:
Picking each identified area in turn, what happens if you now home in on that 20% with 80% more focus?
Let me give you an example of what I mean:
You have decided to focus on your daily ‘to do’ list and have 10 items to do. You may notice (now that you’re thinking about it) that around 2 of the items on this list may give you 80% of the return (either financially or otherwise) than the rest. So what happens now if you focus 80% of your effort on the top 20% items on your list?
This tends to come up time and time again with business owners when we discuss the difference between working ‘hard’ and working ‘smart’.
Sooooo……if you worked smart on the ‘right things’ what could you now achieve in your business that you have previously found difficult?
What might happen if you applied this idea to all areas of your business? How might it change the way you look at your business and your business results? It’s an interesting thought, is it not?
To Your Success,
Mike Yates
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