adminShelter Chieza Change Management
It is hard to believe that 20 percent of something can determine 80 percent of the results. If you look around, you may be convinced of the reality of this case. In business 80 percent of all our results in business and in life stem from a mere 20 percent of our efforts.
In anything fewer things (20 percent) are vital and many (80 percent) are trivial. This rule is a business fundamental and has potential to change lifestyles. With this rule, you do not have to attend an economics class or a statistics class to understand it.
Books have been written about this principle, which is widely believed to have been originated by an Italian economist Vilfredo Pareto who created a mathematical formula to describe the unequal distribution of wealth in his country, observing that twenty percent of the people owned eighty percent of the wealth.
It is true about most things in life; you can apply the 80/20 rule to almost anything, from management to the physical world, 20 percent of the defects cause 80 percent of the problems.
Project Managers must know that 20 percent of the work (the first 10 percent and the last 10 percent) consume 80 percent of their time and resources.
Other deductions from this principle are that “20 percent of your stock takes up 80 percent of your warehouse space and that 80 percent of your stock comes from 20 percent of your suppliers. Also 80 percent of your sales will come from 20 percent of your sales staff.
Twenty percent of your staff will cause 80 percent of your problems, but another 20 percent of your staff will provide 80 percent of your production. I recently discovered that 80 percent of advertising and marketing successes come from 20 percent of our advertising campaigns”.
It requires managers to use the 80/20 rule wisely. It encourages managers to focus and spend energy and time on the 20 percent that matters. You may realise that of the things you do during the day, from meetings to proposals to conversations to phone calls, only 20 percent really matter. Those 20 percent produce 80 percent of your results. You would excel if you identified and focussed on those things. If by any chance you have a memory slip, make sure it’s not part of that 20 percent. As a matter of fact, one must not just “work smart”, work smart on the right things.
Richard Koch wrote a book: Living The 80/20 Way that discusses living life productively and through seeking maximum satisfaction by focusing on your passions. It points to possibilities that the manner in which wealth and resources are distributed on earth is a basic signal of the 80/20 rule where a small percentage of the population controls the biggest portion.
At our company, we know that 20 percent of customers are responsible for 80 percent of the revenue. Of course, these are not hard and fast rules, it may but not be the exact ratio of 80/20 but chances are that if you look at many key metrics in a business there is definitely a minority creating a majority.
I have tried to apply this rule to my personal life. I learnt that I must not spend much time on things and jobs that I don’t like, hence I have increased time on things I have a passion for.
I realised that my real happiness and inner satisfaction comes from spending time doing things I enjoy the most. I have a passion for Interior design and since I started doing this, my life has changed. Its true, pursuing your passion often leads to a greater income because the quality your output is so much higher.
Focus your energy on increasing investment in your core strengths and you will reap rewards. There are many of you that may have to drop your working hours to three days per week and spend more time attracting more clients, researching more on your profession, finding more time to write your thoughts or book or whatever it is you really want to do. You will be a lot happier for following your enthusiasm rather than the dollar.
If you wish to sell your website, If 80 percent of your visitors see only 20 percent of your web pages, it would be wise to know which 20 percent they visit, the reason and find ways of making money out of these pages.
It is important to start noticing which 20 percent of activities, people and products are responsible for 80 percent of your success. Spending more time on the things that have the best chance of making the biggest difference can go a long way in making you more successful, with less effort.
Till next week, may God richly bless you.
Shelter Chieza is an Advisor in management issues. She can be contacted at [email protected] <mailto:[email protected]>
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