Productivity

Leverage the 80/20 Rule for Workplace Success

80/20 rule in management

In business, there isn’t a balanced relationship among input and output. 20 percent of your products and services might make up 80 percent of your sales. 20 percent of your clients might make up 80 percent of your earnings.

This inequality can be applied to many facets in life and business and is particularly useful as a productivity tool. This rule is called the Pareto Principle and was developed by Italian economist Vilfredo Pareto in 1895. He postulated that 20 percent of Italians owned 80 percent of the country’s wealth. Since then, the principle has been applied perhaps most compellingly to input and output – 20 percent of the causes produces 80 percent of the consequences.

Of course, the Pareto Principle is an observation, not a law; you aren’t always going to discover that precisely 20 percent of input leads to exactly 80 percent of output. Instead, the principle is designed to remind us that input and output is not balanced, and unproductive tasks and habits can be de-prioritized.

How can this principle be applied to management? Managers can use the following strategies to leverage the 80/20 principle to better lead their team, focus on specific projects, and drive key results.

Apply the 80/20 Rule to Managing Your Team

Determine what makes certain team members more effective than others.

There are likely members of your team who do slightly better than others. Perhaps they attract higher-earning clients or drive a greater number of sales. We often decide these team members have some intangible quality that makes them “better” than others without specifically pinpointing what factors affect their success.

Connecting with your most impactful team members, observing them, and asking them what helps them be so effective is the first step. Once you’ve determined their “special sauce,” then you can share these tips with other team members who can then use them to improve, as well.

Encourage your team to connect more often with top clients.

It’s human nature to focus on clients who reach out to us, those whose emails and phone calls make it to the top of our to-do lists. But the clients who might seek the most attention may not actually produce the greatest impact.

That’s what the 80/20 rule reminds us to do: prioritize clients who bring in the greatest revenue. Rather than connecting with clients when they need you, strategize and plan to connect the most regularly with clients who provide the greatest financial returns.

Identify tasks that reap the greatest rewards.

If the 80/20 rule suggests that 20 percent of our tasks produce 80 percent of results, that suggests that we’re wasting a lot of time. One of the ways to eliminate time sucks, or inefficient processes, is to have your team map out precisely how they spend the hours of their days for a week. This should not be a judgmental exercise, but a way to illuminate where their wasted time is going.

Next, analyze the habits and tasks that had the greatest impact. Did cold calling a potential client take minimal time but produce effective results? Could automating an email replace a time-consuming, inefficient habit?

Once you and your team map the most productive tasks, you can focus on eliminating or diminishing time spent on less worthwhile things.

Prioritize projects that bring in the highest earning or the most impact.

In a similar way to client focus, we may not be focusing on the most important projects during our daily work routines. Regular meetings, expected to-do lists, or ambiguous goals can keep us from working on the most necessary – and rewarding – projects.

use the pareto principle at workSimilarly, aim to identify projects that produce the greatest results. These should be receiving more of your team’s attention and focus than other projects that don’t have as much of an impact. The first step is developing standards for measuring the output of a project, be it money earned, clients reached, or other measurable results. Ideally, you could standardize all of your projects with the same measurement, so they can be compared.

After determining which projects are the most effective, decide if you’re spending 80 percent of your time on the pressing projects and only 20 percent on other tasks. You’re only maximizing your time efficiently if you pay more attention to productive projects.

The 80/20 Principle in Management

The Pareto Principle isn’t a hard and fast rule. More than anything, it is a productivity strategy for your team. It encourages managers to focus on the unequal balance between input and output, and identify what factors produce more efficient results. In other words, the 80/20 rule reminds you to analyze strategies, habits, and practices that drive the greatest output, rather than going about business as usual.

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