Remember Pareto
There are two things that business people find very challenging: thinking ahead and doing things in order of importance.
Doing these two things makes the difference between success in business and just surviving. And the same is true for all areas of our lives.
Leadership trainer and author John Maxwell says, “thinking ahead and prioritizing responsibilities marks the major differences between a leader and a follower.”
Most people have heard of the Pareto Principle, more commonly known as the 80/20 Principle.
Roughly stated this says that in most businesses 80% of your business comes from 20 % of your customers.
Other examples of the Pareto Principle are:
- Reading: 20 percent of the book contains 80 percent of the content.
- Job: 20 percent of our work gives us 80 percent of our satisfaction.
- Products: 20 percent of the products bring in 80 percent of the profits.
- Party: 20 percent of the people will eat 80 percent of the food!
So… when it comes to your priorities, 20 percent of your priorities will give you 80 percent of your production IF you spend your time, energy, money and personnel on the top 20 percent of your priorities.
When you do this you are getting a 400% or fourfold return in productivity. Think what this would mean in your business!
Every business person needs to understand the Pareto Principle as it applies to the areas of customers, team and leadership.
In the area of customers, it is vital to identify the 20 percent who account for 80 percent of your business. These are your “raving fans” and strategies must be put in place to care for them appropriately.
For your team, you must identify the top 20 percent producers. Spend 80 percent of your people time with these people to develop them to their full potential.
YOUR CHALLENGE: Take a look at how the Pareto principle applies in your business and get focused on the most important and most impactful areas of your business.
If you would like to learn more about how this might apply to your business, let’s talk:
