Managing to Make a Difference

Chapter 71Spend More Time on the 20

The law of the vital few, known more formally as the Pareto Principle, helps people focus on the things that make the biggest difference. It is also known as the 80/20 rule. Here are some examples of this rule:

1. Eighty percent of your revenue comes from 20 percent of your customers.
2. Eighty percent of your sales come from 20 percent of your products.
3. Eighty percent of your sales are made by 20 percent of your sales staff.
4. Eighty percent of your employee turnover comes from 20 percent of your departments.

These are always approximations, of course, but the important point is the principle generally holds true.

Lesson

Twenty percent of your efforts account for 80 percent of your results. Time management is not about doing many things at once. It is about spending your time on the things that make the biggest difference.

Here is an example from Larry's experience:

Reducing Accidents

A hotel in which I was working had too many accidents. We had a safety committee that was implementing all the normal strategies, and modest improvements were achieved. The hotel controller, who was not on the committee, reviewed the available data and arrived at the following insight: 80 percent of the accidents occurred around 3 PM, which was the shift-change time. We thereafter focused our efforts on reducing accidents only during that window of time and achieved a dramatic reduction in accidents.

Here is one more example:

A Simple Method to Increase ...