The Pareto principle, also called the eighty-twenty rule, is a movement of management thought that has been in development since the 1900s. The gist of the principle is simply that, in general, 80% of your sales income comes from 20% of your clients. This idea can be further expanded into the notion of a general effort-result distribution. That means that no matter how much one works, only about one-fifth of one's efforts go into generating the most of the results he sees. The rest of the energy, unfortunately, goes into less productive endeavors.
The principle has been widely applied to sales management as well as marketing, but that doesn't mean that you cannot get creative and see use of it anywhere else. After all, as an entrepreneur, your task is to find new applications for existing resources. So go ahead; think about 80/20; we are rooting for you. All the while, today's post is going to be fairly short. Instead of giving away all the secrets at once, we are giving extra credit to all of you who participate. Do some research, ask your coworkers, or just think about the information that we have given you already.
Leave a comment with your thoughts about the implications of the Pareto principle and how it applies to your professional life. Do you think it works? Which part of your workday do you think is affected by this rule? Then we will recap the challenge and write down our own thoughts about the 80/20 rule on Thursday, October 21, 2010.The best responses that we get from the participants will be featured in the post on that Thursday.
Keep in mind: your input doesn't have to be a Nobel-prize winning work. All we want is help you start applying theory to the work that you (yes; you!) are striving to accomplish these days. Here are some resources to get yourself started:
- Basic Pareto's Principle on About.com lays down some theory
- An intriguing explanation uses animation as a graphic example for the rule.
We are looking forward to your participation! Even though this challenge will run for a week, we will still run on schedule, so check back for a new article this Sunday. We believe in you!
In order to find the most productive activities I track every activity during the day. I use MS Outlook as a ledger of my business accomplishments. That helps me to spot ineffective activities, and timely terminate them.
ReplyDeleteHaving a tracking system helps prevent such enemies of effectiveness as procrastination, lack of concentration, and lack of follow-up.
Also I have a fixed time blocks dedicated to activities which effectiveness is proven.