"The Pareto principle (also known as the 80-20 rule ) states that, for many events, roughly 80% of the effects come from 20% of the causes."
A Google search will provide a multitude of possibilities in a fraction of a second. But can it provide clarity? Does it really provide an answer? The explosion of the Internet, along with Apps of all sorts, social media, and 24-hour networks, and similar phenomena… have all created an information overload, a sensory assault, a craving to accumulate more while finding less and less of value. And, perhaps, less happiness.
Data is not knowledge. Knowledge is not insight. Insight is not wisdom. More does not add value. More is actually less. And less is more.
It turns out that the 80/20 principle works both in business and in our personal lives.
John Maxwell in <a rel="noreferrer noopener" href="https://www.amazon.com/Developing-Leader-Within-John-Maxwell/dp/0785266666/ref=sr_1_2?dchild=1&keywords=discover+the+leader+within+you&qid=1600730087&sr=8-2" target="_blank"> Developing the Leader Within You </a> summarized it this way.
Notice how consistently the 80/20 rule applies. 20% of our time, products, and people, yield 80% of the results. I have found this to be true in the businesses I have run. It started with the first one that I ran more than 30 years ago. It had eight plus product lines, and 300 skus (items). But one product line, with perhaps 10 items, accounted for 85% of the profits! This metric has appeared again and again in businesses that I have encountered.
A study in the Harvard Business Review, looked at companies evaluating acquisitions; more specifically it focused on the customer profitability profile of the companies to be acquired. The numbers were quite telling: The top 25% of the customers resulted in 113% of the profits. The bottom quartile lost 88%!
All of this screams for prioritization! One of my favorite lines from Maxwell's book is: "You cannot overestimate the unimportance of practically everything. "
Time for a personal checkup? Try this.
1. Rank your customers by sales and profitability. The answer will surprise you. Then ask: Are we focused on the right customers? How much money are we wasting? Yes, wasting.
2. Do the same analysis for the activities, meetings, tasks that you have. What do the answers say?
3. Take a look at your calendar for the last four weeks. Where are you spending your time? Are you focused on the right things? Not only in business, but also in your personal life?
4. Look at your relationships. Are you.....heck, you know the question.
Human nature thrives on activity, the quest for more takes on a life of its own, and the trees become indistinguishable from the forest. We are buried in the inconsequential and we call that living a life!
Stop. Observe. Reflect.