One of the most effective tools you can use to ‘lay some rubber on the road’ is the use of the Pareto Principle. If you remember the Total Quality training you had years ago, this principle will ring a familiar bell. Most business people know this as the 80/20 rule. 80% of your sales are generated by 20% of your people. 20% of your customers generate 80% of your company revenues. Focusing your energy (time and money) on the top 20% in your organization is the key to ‘doing more with less’.
Sadly, most organizations and managers focus on the opposite end of this equation. They focus on the 80% that are yielding 20%. In fact, most management time in larger organizations is focused on the 5% – terribly disrupting employees, unrealistic customers, meddling competitors, bureaucratic compliance issues, and list goes on.
Every human in an organization is a manager. We all have to plan, organize, implement, and follow up to make sure we are achieving what we are accountable to do in our respective job positions. I have seen many very bright people lose sight of Pareto management as a guiding force, and get way off track by focusing on minor things – making mountains out of molehills. Setting priorities and focusing one’s attention on the critical 20% of all activities, resources, and time will make dramatic changes in organization behavior and how you allocate resources. Performing a Pareto analysis of your business will pay tremendous benefits and it is a lot of fun to boot. What you will discover is there are only a few critical success factors that create the majority of the benefits. This principle applies to your health, your relationships, your investments, your lifestyle, and especially your business. Enjoy the road. GMO