Business Breakthrough #1
The Pareto Principle
I frequently talk about the 80/20 rule, otherwise known as the Pareto principle, because it’s a powerful concept that illuminates the reality of our time and efforts. In short, the 80/20 rule tells us that 80 percent of consequences or effects come from 20 percent of the causes. The reason I talk about this so much is because I see this in operation all the time in my clients’ businesses.
From my outsider’s perspective, it’s clear that 20 percent of my clients’ investments of time, energy, and money generate the vast majority of their return. Unfortunately, most business owners don’t operate with this understanding. Instead they are caught up in the 80 percent of time and energy that generates little, failing to drill down to the efforts and investments that would be most effective in their business (and personal) lives.
For this reason, I always suggest creating a stop-doing list, a list of those things that are not the highest and best use of your time, energy, and money. No matter who you are, these are limited resources. As business owners, it’s our responsibility to find the best way to invest those resources.
If you want to radically leverage your time, energy, and money, determine what makes the 20 percent cut. To accomplish that, you have to learn to say no more often; it helps to remember that every time you say yes, you are saying no to something. Why not determine the things that you want to say yes to?
The key is to learn to say no to the trivial things and yes to the highly important things, the 20 percent of the 20 percent. Be more intensely focused on those things that will bring the greatest success in your life, professionally and personally. Be focused on the right stuff, the good stuff. Start saying no now. Warren Buffet said: “For every 100 great opportunities that are brought to me, I say no 99 times.”* Start that stop-doing list, and let me know how you are doing once you’ve put it into practice.
* Harvey Mackay “Super Secrets to Becoming a Super Achiever,” harveymackay.com, August 22, 2012.