Italian economist Vilfredo Pareto initially observed this in 1906, when he discovered that 80 percent of Italian real estate was owned by just 20 percent of the population. Then he went out to his garden and saw that 20 percent of the pea pods contained 80 percent of the peas…so this was clearly a larger phenomenon!
Pareto’s “80/20” Principle remains in full effect today. For example, we in the accounting profession know that a modest minority of people in the US actually pay the majority of taxes!
In the business world, this means that 20 percent of your actions will account for 80 percent of your results. Which means that, on the flip side, 80 percent of your actions will account for only 20 percent of your results. These are the activities that fill up your schedule, but add little or no value.
So if you find yourself wishing you had more time in the day to get everything done, this is a critical principle to keep in mind. Because while you can’t add more hours to the day, you can make sure that you’re spending time on the most valuable activities.
Imagine the possibilities. Right now, you’re probably spending only the equivalent of one day a week on your most important items. If you doubled this to two days a week, and took the rest of the week off, you’d actually increase your productivity by 60 percent!
Legendary self-help author and guru Brian Tracy encourages you to constantly ask yourself if you’re working on the single important thing that you could be doing. This is the first and most important step of applying the 80/20 Rule - to make sure that you are focused on the No. 1 most important activity you can be.
What you’re working on is an order of magnitude more important than the efficiency at which you are actually working. Think of it as a game of darts—you can be the most accurate player (or efficient worker) in the world, but if you’re not facing the right direction, it’s not going to matter!
Most skilled professionals like to be busy—it’s human nature. But amidst the hustle and bustle of the weekly whirlwind, it’s important to take a step back quite often and make sure that the item you’re working on is indeed the most important activity that you could be focused on. Then you can use your extra time to work on the next most important thing...or you can just take some time off!
Brett Owens is chief executive and co-founder of Chrometa, a Sacramento, Calif.-based provider of time-tracking software that records activity in real time. Previously marketed to the legal community, Chrometa is branching out to accounting prospects. Gains include the ability to discover previously undocumented billable time, saving time on billing reconciliation and improving personal productivity. Brett can be reached at 916-254-0260 and firstname.lastname@example.org.