What's Your Most Important 20%?
(Part 1 of 2)
 A
fun new tool that I'm learning in coaching school is the
Pareto Principle. "Business-management consultant
Joseph M. Juran suggested the principle and named it after
Italian economist Vilfredo Pareto, who observed in 1906
that 80% of the land in Italy was owned by 20% of the population;
he developed the principle by observing that 20% of the
pea pods in his garden contained 80% of the peas....
The principle is that 80% of the effects come from
20% of the causes. The distribution shows up in
several different aspects relevant to entrepreneurs and
business managers. For example:
- 80% of your profits come from 20% of your customers
- 80% of your complaints come from 20% of your customers
- 80% of your profits come from 20% of the time you spend
- 80% of your sales come from 20% of your products
- 80% of your sales are made by 20% of your sales staff
Therefore, many businesses have an easy access to dramatic
improvements in profitability by focusing on the most effective
areas and eliminating, ignoring, automating, delegating
or re-training the rest, as appropriate." from http://en.wikipedia.org/wiki/Pareto_principle,
accessed 8/10/2011
There's an imbalance present: investing 10% of
your time does NOT give you 10% of your results.
When you spend 20% of your time doing the RIGHT actions,
you'll be creating 80% of your results. The other 80% of
your time is going into something that's not producing big
results. (In your business, the actual ratio can be 70-30
or 60-40 vs. 80-20, e.g., 70% of your results come from
30% of your efforts.)
Here's what that can translate into your business.
1. Know which 20% of your time is giving you 80%
of your results. You've got to start with understanding
what is the "vital few" vs. the "trivial
many".
"Dr. Joseph Juran, working in the US in the 1930s
and 40s recognized a universal principle he called the 'vital
few and trivial many' ... In Juran's initial work he identified
20 percent of the defects causing 80 percent of the problems.
Project Managers know that 20 percent of the work (the first
10 percent and the last 10 percent) consume 80 percent of
your time and resources."
http://management.about.com/cs/generalmanagement/a/Pareto081202.htm
accessed 8/11/2011
In your business, where do you spend 20% of your time that
yields 80% of your income? Where do you spend 20% of your
time that yields 80% of your clients? Where do you spend
20% of your time that yields 80% of your team members?
2. Does it make sense to invest more of your time
into the vital few or into the trivial many? There
is no pre-determined answer.
If your best clients reliably generate large sales for
you, are they close to their maximum of how often they buy
or how much they buy? If so, then spending more time on
them will give you small results.
On the other hand, if you have a lot of mid-range clients:
they buy occasionally or they spend modest amounts - then
figuring out how to increase the sales across this large
group by 10% might make a huge difference to your bottom
line. That difference may be bigger than increasing sales
among your already-top clients.
3. Remember that this principle does NOT automatically
mean you should always ignore the trivial few.
You still need to provide great service to ALL your clients;
you still need to support ALL your team members.
As discussed in 2., you can selectively amp up what
you do with EITHER the vital few or the trivial many, but
for certain core activities, you do need to service both
groups at a basic level.
CALL TO ACTION
First, know what is your 20% time investment that
brings you 80% of your results. This principle,
backed up by years of research indicates that there is ALWAYS
an imbalance between your effort and your results. Some
results come from little effort; some results come from
more effort. Which of your results come from little effort?
Once you know what gives your business the most
results, then you can prioritize to make sure that your
most important 20% items get done, so you get the 80% results.
Then you can look at the remaining 80% (of your time, your
clients, your team members, etc.) and decide which of those
are most important.
If you have no idea how to approach this or if
you're awash in hundreds of items which all seem to have
equally urgent importance, then outside support can help.
Through powerful coaching questions, I can help cut through
the overwhelm and the fog, to help you gain more clarity
and create focus. Where you put your focus is where you
get results!
I'm happy to offer you a complimentary Success Session
- contact
me here. My expert mentoring, faith in you, support
and accountability make a huge difference in my clients'
lives.
Here's how I helped my client Leah, who started in a state
of ambivalence and ended up as the top seller in her company.
"Before I started working with Marcy, I was in
a state of ambivalence and not confident in my own decision
making. I was stuck and not moving forward in many areas
of my life. As a mom and an entrepreneur, I was really confused
about how to achieve what I wanted. I was attracted to Marcy
because she really listened and gave me exactly what I needed
to hear. She always says the right thing at the right time.
She is so in tune with my goals and knows my personality
so well, that the solutions she has given me as well as
new insights that have launched me forward are like going
to a master tailor and having the perfect suit made. Because
of our sessions together, I have rediscovered my passion
and purpose and I have had some life-changing shifts that
have had a very positive impact on and gave me back my enthusiasm
and drive.
As a result of our work together, I now feel more confident
and I love what I do. I was just honored as tops in sales
with my company and a year ago that would not have happened.
I'm in a new place in my life, no longer indecisive and
fearful, but committed and confident. Thank you, Marcy!"
Leah Jackson
Advisor, BECOME
© 2011 Marcy Stahl
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If you're ready to empower yourself AND boost your business,
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Here's
a photo of the view from the 34th floor above 42nd Street,
above the traffic and tourists, looking out at the skyline
and the river. 
