by Margo DeGange
We have all heard of the 80/20 rule (also known as the Pareto Principle) at one time or another, but we tend to ignore its real power in our work and personal lives.
The concept of the 80/20 rule was first written about by the Italian economist Vilfredo Pareto, way back in 1895, hence the name Pareto Principle. This savvy economist noticed that in his society, there was a clear distinction of types of people in regard to money, prestige, power, and influence. He saw that there was a “top” 20% which he coined the “vital few”, and a bottom 80% which he termed the “trivial many”.
This economic finding caused Pareto to look further into his premise of an 80/20 rule, and he discovered that almost all activity was in line with this principle, too, which basically states that 20% of effort and activity will produce 80% of the results from that effort or activity. This is a phenomenal finding, and one that can help us to be more successful in our day and not waste time, money, or effort in our lives and in our businesses.
Based on the 80/20 rule, 80% of what you wear comes from only 20% of your wardrobe and 80% of what you eat when you go out for meals comes from a measly 20% of the restaurants you frequent! 80% of the free time you use visiting with the people you know well is spent with just 20% of those people.
Now let’s apply the principle to your business. You could bet that approximately 80% of all of your sales comes from just 20% of your customers, and about 80% of all of the profits in you business come from only about 20% of the products and services you offer. A whopping 80% of what your customers complain about likely comes from 20% of your offerings.
You can further assume that roughly 20% of the activities you spend your time on will result in 80% of the meaningful results you desire. So out of every ten things you set out to do, two of those activities will pack a powerful punch in terms of getting you moving ahead in a substantial way, and they will benefit you more than the other eight put together! Best of all, those two activities may take the same amount of time, or even less time, than any of the other eight taken individually.
Obviously then, you need to take a long hard look at your to do list each and every day, and try to decipher, from past experience, from the experiences of others, from past results, from your GUT, and from your good common sense, which one or two activities you should focus on or do first and foremost each day, and let the other tasks take a back seat (you can also delegate these). Spend your first efforts daily on the “vital few” activities, and AVOID doing the “trivial many” activities if your “vital few” are not yet done. Spending time on the “vital few” or the most results-oriented tasks is KEY to your definite success.
The vital activities that deserve your focus can be finding ways of improving products that are not working, or eliminating them altogether. Or your vital activities may be calling customers who you value most. Vital activities could be finding the team members who are producing, connecting, and innovating, and spending time with them, or finding ways to use their skills to help others in the organization or to help the organization itself. Your vital activities may involve organizing strategic creativity sessions with the intent of developing one new product. Your vital activities may be to finish developing a meaningful product or service that you halted because you got sidetracked.
As a business person, business manager, or manager of self, FOCUS on what matters most. Avoid the constant trivial interruptions that take your focus away, and especially avoid the overly-needy people who sap your energy and time. Learn to delegate tasks, and learn to assign sales associates or employees to a mentor who can help them, or simply remove the bottom 20% of tasks that are not necessary, and the bottom 20% people who are stagnant, lazy, disruptive, unwilling, or who will not think for themselves once they have been taught the ropes.
The Pareto Principle is a useful tool we can all use to manage our businesses and our lives. If you have a choice concerning which activities to invest your time in (and you do), which people to visit and associate with, which customers to follow up on and stay in contact with, which products and services to sell, and which projects to develop further, choose the 20 that will bring the most desirable, the most peaceful, and the moist profitable results.
Now do the math for your own personal life and business, and get ready to see AMAZING things begin to happen for you and those around you.
Have a Wildly 80/20 Week,
Margo
Margarett (Margo) DeGange, M.Ed. is a Business and Design Coach in the Home Fashions Industry. She creates and delivers custom training programs for managed businesses and their sales consultants to help them communicate better with customers and increase sales and profits. Margarett is a Writer and Professional Speaker, and the President of The DeGangi Group and The DeGangi School of Interior Decoration, with both on sight and on-line courses in Interior Decorating, Marketing, and Redesign. For almost 20 years she has helped individuals and managed business owners in the interior fashions and decorating industries to earn more while fully enjoying the process.
Two of Margo’s popular products for furniture store owners and their sales professionals are The Decorating School Crash Course Power-Ed Pack (9 design lessons on video/audio with 12 hours of content), and the matching Decorating School Crash Course Learner Files to measure learning, provide added interactivity, and motivate sales consultants to own their opportunities for growth.
Visit Margo DeGange’s website at www.DecoratingForProfits.com for more information. Send email and questions to her at Margarett@furninfo.com.