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!
Most companies focus too much on better products, when perception is far more important… the first product in someone’s mind is usually superior. In fact, it’s even better to be first than it is to be better. Be realistic about your place on the ladder (If You Ain’t First You’re Last) and then work to position yourself against the next guy in line. Everyone by now has heard of the Avis example of their “we try harder” slogan…whether or not they actually did try harder is besides the point, they were just trying to position themselves against number one (Hertz).
Don’t try to be better (it never works), try to be different. Think of these examples:
- 7Up moved from the tiny lemon lime soda market into the number three spot in the much larger cola market by calling themselves the Un-Cola.
- Apple focuses only on the high $$$ market…10% of the customers, but 75% of the profits
So, not only should you pick a niche, you must! But, make sure that it has enough profitable potential customers. All you need is 1,000 True Fans and you are off to the races.
What is your differentiator: Service, Distribution, etc. Look for the hole to fill. Everyone is interested in what is new, not what is better. Better is nowhere, different is where it’s at! I got a kick out of this video by Derek Sivers…one man dancing can start a whole crowd, but you must be bold enough to put yourself out there.
Now, go be different!
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.
Water boils at 212F…any more than that doesn’t boil it any more than it already is!
- If you are in a race, you only need to be a fraction of a second faster than everybody else…winning by 30 minutes makes you no first-er
- In basketball and football you just need 1 more point than the other team, in baseball just one more run…in fact if you are up by a wide margin, you sit your best players to let them rest
- Maybe you don’t need to study at all to get a C, but need to study 40 hours to get an A…what’s it worth to you and what are your alternative options with that 40 hours?
The point is, you need to understand what it takes to get ahead and work toward that. Just working hard with no knowledge of what it takes to achieve your goal may make you severely over work or maybe even under perform.
So, the question really is…what is the minimum effective dose that it will take to achieve the outcome that you really want?
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!
Here are some of my favorite NBA ankle breaking moves to create just enough separation from the defender to get an easy bucket. These guys exemplify what we’re talking about…you have to do something to get your competitors off balance just enough to give you some space to make your move…
Steph Curry Fakes out Chris Paul
CP3 Loses Defender on Stepback 3-Pointer
Kyrie Irving Under The Legs Pull-Back
In all of these, they didn’t create miles between themselves and their competitors, but just enough room to get an advantage. That’s all you need is some breathing room, but you need to know what it takes to create that separation and get to work.