Category: Laws to Live by

Pareto Principle or the 80/20 Rule

If there is one law that I apply over and over, all day long, to whatever I possibly can in my life, personal or business, it is the genius of Italian economist Vilfredo Pareto and his brilliant 80/20 rule or Pareto Principle which simply states that 80% of the effects come from 20% of the causes.

The basic idea here can be seen everywhere:

  • 80% of your sales probably come from 20% of your products
  • 80% of your revenues probably come from 20% of your clients…20% of your clients probably also give you 80% of your headaches and probably not the same 20% that drives revenue
  • 80% of the wealth is held by 20% of the population
  • You probably wear 20% of your clothes 80% of the time
  • 700 common words make up 2/3 of everyday conversations
  • Who are the 20% of your acquaintances that make you the 80% most crazy

You get the idea. Sometimes it can be way more extreme than 80/20 and you need the right balance. Having 1 customer that drives 95% of your business may feel easy, but not when they disappear…look at all the companies that have supplied Apple in the past that they have laid to waste when they changed suppliers.

Think about how you apply this to your day, every day…

  • Focus on what to improve: Break your problems down and focus on the items that particularly move the dial…layer on resources to really make an impact. 80% of your effort on the 20% that really get things moving
  • Focus on what to remove: Look at the 5% of things that are not working in your business or your life…there is always 5% that can be cleaned up and may make you 20% more efficient or 90% happier!
  • It’s not 1 to 1: realize that to improve by 50% doesn’t necessarily mean a 50% bigger effort, maybe a 5 to 10% increase in methodology can easily turn into a 50% return…talk about creating separation from your competition in a hurry

…some things you cannot change that easily, but just identifying your strengths & weaknesses will help you better cope. Try channeling Mr. Pareto more often and 80/20 your way to more success, freedom, and happiness!

Eliminate, Automate, Delegate

Life out of control? Need to better prioritize/organize? Here are 3 steps that might help you reign things in a bit:

  • Eliminate – what can you just say “No” to? The “Hell Yeah”, or No approach is a great one for this
  • Automate – eliminate first, after that what can you automate so no one has to touch it?
  • Delegate – don’t do this until you’ve done the 2 steps above. Why pay someone to do something that shouldn’t even be done or can be done minus a human being?

No rocket science here, but a good way to try and bring back a little more control over your life. Here are some other ideas on how to Simplify even further.

Get Started: a Little Every Day…Inertia is Key

If you are interested in creating separation from your competition, you have to start somewhere. Here’s a post on how to get things going…

Travis Moench

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“The best time to plant a tree is 20 years ago. The second best time is now” -Chinese proverb

How many times have you had ideas, thoughts, or grand dreams that you never took action on. There is something to be said for having the discipline to say “No” to the majority of the flood of things that pop into your head and to focus on the few that have personal meaning for you. On the other hand, there are many things we know we should be doing, but taking that first step forward is our challenge. “Most of us have two lives. The life we live and the unlived life within us. Between the two stands resistance. Are you a writer who doesn’t write, a painter who doesn’t paint, an entrepreneur who has never started a venture? Resistance has no strength of its own, we feed it with power…

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Parkinson’s Law

Back in 1955 a British naval historian by the name of Cyril Northcote Parkinson wrote his first article on what would eventually become Parkinson’s Law which states the following: “Work expands so as to fill the time available for it’s completion”…without producing significantly better results.

The basic idea here is this…don’t take 30 days to do something that can be done almost as well in 24 hours. Work will always expand to meet the hours in a day that you give it. So, work with a deadline, even if it is an artificial one. Shrink your timelines…constraints are a good thing…they force you to do more with less.

So, the next time you are given a project, severely shrink your timelines and you will be shocked at what you can achieve. You can see this in practice every day by all of the greatest companies and inventors…Elon Musk with SpaceX and Tesla, Jeff Bezos at Amazon, etc. One of the greatest inventors ever even took it a step further…Thomas Edison would talk about his ideas to the media before they were even ready…this would force him to get after it and stay on task.

One way to tackle this is to consider that the hardest thing to do is get started. If you can get the wheels in motion, consider that you might be able to get a project 85-90% of the way along in 24 hours, but the entire project may take 30 days. The second hardest thing to do is to conquer that last mile. So, maybe you can get things to 85-90% and hand off or outsource that last 10-15% that eats up more of your time.

So, continually apply Parkinson’s Law to find the shortest feasible path to completion, given the necessary trade-offs required by the work. Soon, you’ll be wondering what to do with all of your free time! Here’s one of the best posts I feel I’ve written on how to Get To It!

 

Small Wins

One of my favorite articles was written in 1988 on the power of small wins. You can read it in its entirety here…

Small Wins by Karl E. Weick

Others have written articles on the same subject, but this one is my favorite.

The overall idea is that taking small bites out of a bigger more daunting challenge will get you where you want to go, whereas just trying to jump to the top in one giant stroke is near impossible. Here are some examples of this in practice:

  • Sobriety: AA focuses on staying sober one day at a time.
  • In sports, equivalents are baseball singles instead of home runs, in football first downs instead of hail mary’s. In basketball, one year Pat Riley asked each player on his team to get just 1% better in five different categories…seems small enough but by getting each of his players to slightly up their game they won the title the next year.
  • Consider the challenge of counting sheets of paper: if you are counting 1000 sheets of paper with periodic disruptions, you may get to 888 and have to start all over. If instead you break it into 10s or 100s, an interruption doesn’t set you back near as much

Deliberately going after small wins reinforces the perception that people can exert some influence over what happens to them and produces change of manageable size that serves as an incentive to keep going. It is initially less stressful and over time builds significant traction. Small wins are easier for people to work toward. If you break down the big problem into a series of small wins:

  • Not near as much fear of failure as failures are less important
  • It reduces the pressure (“just do this one small thing, not a giant one”)
  • No fear of lack of skills (I can do this by myself… I have the ability)

A small win by itself may seem unimportant, however a series of wins at small but significant tasks reveals a pattern that may attract allies, deter opponents, and lower resistance to subsequent proposals. Additional resources also flow toward winners.

Small wins are easier to comprehend and digest. Once a small win has been accomplished forces are set in motion that favor another small win. When a solution is put in place the next solvable problem often becomes more visible. This occurs because new allies bring new solutions with them and old opponents change their habits. I recently watched the movie the Martian and this was his game plan when stranded on Mars, “That’s all it is. You just begin. You do the math, you solve one problem. Then you solve the next one, and then the next and if you solve enough problems you get to come home.”

Consider also, that a small win is also someone else’s small loss, the stakes are reduced, which encourages the losers to bear their loss without disrupting the social system. If you take a small win from Amazon or Apple, the may not notice, but boldy attack their core business and you may awaken a giant. Big wins can lead to unexpected negative consequences and big countermeasures.

Finally, just get started, because you can’t plan it all out. Careful plotting of a series of wins to achieve a major change is impossible because conditions do not remain constant. Go for the first win and see where that leads. String a couple together and you may start an avalanche! Get Started!

1% Better Every Day = 38X Better in Just One Year

The Japanese use a term called “Kaizen” that is translated as “continuous improvement”. The idea is to achieve small, incremental changes in processes in order to improve overall efficiency and quality. I love this idea that really small improvements every day (baby steps) can produce such enormous results over a short period of time.

Consider this…if your only goal is to just get 1% better every day than you were the day before, after just one year you will be 38 times better!! Talk about creating separation from your competitors! It may not feel like much on Day 2, 3, or 4, but on day 365, look at your result…WOW!

1-better-every-day

What is it you can focus on to just get 1% better every day that will pay huge dividends? Get started!

1,000 True Fans

I didn’t come up with this one. This comes from a wonderful post by Kevin Kelly here.

The gist of the idea is that if you want to be successful in any endeavor: artist, entrepreneur, musician, etc. you don’t need 1 million customers or followers, you just need to acquire 1,000 true fans. The emphasis is on “True” fans…that doesn’t mean all 1,000 worship every thing you do, but in general they are willing to buy what you are selling and they are more than happy to help spread the word because they love it so much.

Obtaining 1,000 fans isn’t an easy quest (although the internet has helped substantially in creating direct relationships with your fans all around the globe), but once you’ve gotten there, you know you’ve hit on something good.

Go find those 1,000 fans!