Pareto’s Law can be summarized as follows: 80% of the outputs result from 20% of the inputs.
What 20% of customers/products/regions are producing 80% of the profit? What factors or shared characteristics might account for this?” Many such questions later, I began making changes: “firing” my highest-maintenance customers.
What is the 20% of my belongings that I use 80% of the time? Eliminate the other 80% in clothing, magazines, books, and all else. Be ruthless – you can always repurchase things you can’t live without.
On finding and working on the essentials: The 80/20 principle, also known as Pareto’s law, is the primary tool in this case. It dictates that 80% (or more) of your desired outcomes are the result of 20% (or less) of your activities and inputs.
After reading The E-Myth Revisited by Michael Gerber and The 80/20 Principle by Richard Koch, I decided that extreme questions were the forcing function I needed. The question I found most helpful was, “If I could only work 2 hours per week on my business, what would I do?”
If you had a gun to your head or contracted some horrible disease, and you had to limit work to 2 hours per week, what would you do to keep things afloat?
When prioritizing his todo list: Which one of these, if done, would render all the rest either easier or completely irrelevant?
1. Limit tasks to the important to shorten work time (80/20). 2. Shorten work time to limit tasks to the important (Parkinson’s Law).
Parkinson’s Law dictates that a task will swell in perceived importance and complexity in relation to the time allotted for its completion.
I tend to focus on the 80-20 analysis as it applies to people getting on and off the ground as quickly as possible to say be on top 5 to 10% of the general population. (Conversation with Josh Waitzkin)
Invest in duplicating your few strong areas instead of fixing all of your weaknesses.
