In this article, you will learn the best way to make your business productivity skyrocket. Every business is expected to grow and increase in value, income, and deliverables with time. This is a natural expectation, however, time only isn’t enough to generate the required energy. Alongside time which is a natural occurrence, business productivity is the fuel that drives the wheel.
Consider a child growth process. Over time, every child is expected to grow and become bigger. It is only natural to think that.
But, there are a lot of factors contributing to the growth of a child. Environment, food, and nutrient, love, care, education, positive mindset, encouraging mentality, etc.
The same is with business because there are a lot of factors contributing to the growth of your business. Products, customers, marketing strategies, business model and structure, etc. These factors can be assembled under the umbrella of a single principle to improve business productivity and growth.
What is this principle? Why do you need it? How important is it? Can it really help you to improve business productivity? Are there any proven records that this principle really works? Will it work for your business?
Easy! You may have a lot of questions running through your mind right now craving answers. This article is aimed at addressing every possible question you may have and providing an easy-to-comprehend explanation to them.
But first of all, identifying a core problem is a mandatory step to finding a solution to that problem. What are we getting at? What is Business Productivity? How can you tell that your business isn’t being productive?
1. Business productivity at a glance
Business can be defined as an organization that makes and provides products and services. This is in exchange for money or other alternatives through commercial activities.
Productivity is a measure of the amount of work done and the efficiency with which this work (input) produces an output.
Combining these two definitions: Business productivity can be defined as the output of work done by an organization to produce desirable outputs.
Business productivity defines your profitability level, target and objectives met to fulfil the purpose on which your organization was created. Do you get that?
Productivity is a dream every company desire to achieve. It conveys how well your business is doing and drives the rate at which you generate income and profit. Not only that, it creates an envious image of your company in front of your competitors. It triggers in them the question: What are you doing right that they are missing out on?
Do you want to get your competitors curious? Or get them asking for your secret weapon? Invest in your productivity.
2. But, how can you achieve business productivity?
You are about to learn about the #1 way to make your business productivity skyrocket using the Pareto Principle. However, before diving into this principle, you need to understand the concept. You may find this section a little bit boring because it contains the history of the Pareto Principle. I don’t like history. or maybe I’m wrong, you may love it!
3. Background History: What is Pareto Principle?
From personal studies, there are controversies as to the year when this principle was discovered. Some say 1895, some say 1896, some say 1897, and others 1906.
But according to Robert Koch in his book 80/ 20 Principles, the secret of achieving more with less:
The pattern underlying the Pareto principle was discovered in 1897 by Italian economist Vilfredo Pareto.
Vilfredo Pareto made 3 keynote discoveries:
1. The rate of distribution of wealth and income.
He found that most income and wealth went to a minority of the people in his samples.
2. A mathematical relationship between the proportion of people and the amount that this group enjoyed.
Simply put: if 20% of the population enjoyed 80% of the wealth, you can predict that 10% will have 65% of the wealth. And 5% will have 50%. Be more careful here. Because the Pareto Principle is mostly called the 80/20 principle doesn’t mean that your percentages need to add up to 100%.
The key point here is not the percentages. It is a fact that the distribution of wealth across the population was predictably imbalanced.
3. This pattern of imbalance was repeated consistently whenever he looked at data referring to different times and periods.
In 1949, George K Zipf, a Harvard professor of philology discovered the Principle of Least Efforts. This was a rediscovery of and elaboration of the Pareto Principle.
Joseph Moses Juran, a Romanian-born US engineer made the Pareto Principle virtually synonymous with the Rule of the Vital Few. This was in 1951 with the search for high-quality products.
These similarities further established this principle.
Because of these establishments, the principle has a lot of names. It is called the Pareto Principle, Pareto Law, and the 80/20 Rule. These are the common ones. It is also known as the Principle of least effort, The Law of vital few, and the Principle of Imbalance.
(80/20 rule: Achieving less with more by Robert Koch page 6 – 8)
There you have it, a brief check of the history of the Pareto Principle. You are about to get into the juicy parts of this article. Application of the Pareto Principle! Are you ready? Alright, Let’s dive in!
This section is a story illustrating the application and effects of the Pareto principle. It is broken down into parts for easy comprehension.
As you must have noticed, the Pareto principle can be applied to every one of your activities, not only business.
It can be studies, relationships, lifestyle but for this article, we will be focusing on productivity.
Alexandra Michael is a direct response copywriter who works from home. She had learned a lot of books, had seminars, watched videos, and always tries her best to finish up tasks. She knows exactly what to do when it comes to closing deals, clients and sales.
She’s the busiest being you will ever meet. She starts out working very early in the morning, receives client calls promptly, replies to her emails fast enough. She arranges her files to ensure a neat and helpful environment. Then takes a break and goes ahead with her chores; makes her meals, wash the dishes, cleans her room. At least, she has to live healthily. She does everything expected of her but yet, she has little or no productivity to show for it.
Even though she closes clients diligently, there isn’t always time to close more clients. Because she has a lot up her sleeves, her time is never enough
4. Introducing the Pareto Principle
She got frustrated. I thought they said that working from home is easier and would ease your job? You only have to sit in your pyjamas, sip coffee, close clients and make cool money. 6 figures in a month?
Go on vacation, have fun and live a boss life but why is hers different? She’s seen a lot of people working from home hitting the bags and enjoying their lives.
What is she doing wrong? She’s probably the most hardworking person she knows.
She decided to register for a business coaching program. There, she learned about the Pareto Principle. She was able to figure out what the problem is. So what exactly is the problem? Read on!
5. The problem
A lot at a time, we misunderstand being busy for being productive. We may be busy all day long, doing everything we need to do in hopes of being productive, and still, end up achieving less than we desire.
Alexandra’s problem wasn’t being hardworking or not having enough time. Just like every hardworking person, she deserves all good things.
Unfortunately, the world isn’t like that. There is an imbalance in the way the universe works. Accepting this imbalance is the key to progress.
You can’t do everything at the same time. To be productive, you need to make certain things your priority. These things constitute the 20% of your activities that will bring in the 80% results that you want. You don’t understand? Check out the application.
After figuring out what the problem is, Alexandra decided to prioritize some of her activities.
She made a list of the most important things for her business and prioritized them under 20%.
She realized that she could just pay someone to clean her house, and do her laundry. She can just order her meals, or pay someone to make her homemade food and still do her dishes!
Just like Alexandra, these are the minority of things that consume a lot of your time.
Then, she focused on closing clients, attending to her calls, and replying to her important emails. These constitute the 20% of input that she needed to focus on that will generate the 80% output that she wants.
Applying the Pareto Principle was the best decision Alexandra made in her life. Not only does she have enough time on hand, but she also recorded the productivity she wanted as her income skyrockets to x10 her initial income.
Well, that isn’t a true-life story. It is an illustration of how effective the Pareto principle will be in your business. Now, that story just created a clearer image of the principle and its benefits.
Don’t feel dejected. How about we consider a real-life story now?
The IBM story to be specific. In 1963, IBM discovered that about 80 percent of a computer’s time is spent executing about 20% of the operating code. The company instantly rewrote its operating software to make the most used 20% easily accessible and user-friendly.
This made IBM computers more efficient and faster than competitors’ machines for the majority of the application.
Since then, other companies such as Apple, Lotus, and Microsoft applied the 80/20 principle too. Even with more enthusiasm to make their machines cheaper and easier to use.
Reading this far, you must have spotted the importance of the Pareto Principle. The next few paragraphs explain how to apply this principle to your business.
8. Simple exercise to improve your business productivity following the Pareto Principle
Write out all your daily activities. To figure out this, you can track your typical day. If you have more time, track a typical week to get all your business activities written out.
Figure out the most important set of activities. These most important tasks constitute 20%.
Work on these tasks all the time.
Don’t get busy, get productive. Don’t work hard, work smart. You often see people get busy all day long like Alexandra in the story but achieve little or have nothing to show for it.
Resist the urge to clear up small things first. The most productive of your activities are mostly the hardest. Clear every temptation to resist clearing out the small tasks that produce little output.
You can delete the less important things that crumble up your day or just like Alexandra, you can delegate them to someone else.
But, if you have to do these things yourself, then you can follow the 96 minutes rule which is also an implication of the Pareto Principle. 20% of an 8-hour workday. 8 hours is 480 minutes. 480 minutes x 20% is 96 minutes. i.e. 480 x 0.2 equals 96 minutes.
Dedicate 96 minutes of your working time to the most important tasks every day before doing the less important ones.
In conclusion, our minds have been programmed to work at a 50/50 percent rate to achieve equality.
But, this has been one of the greatest fallacies of time as it consequently reduces productivity, efficiency, and growth. This is because the universe itself is imbalanced.
It’s time to remove the 50/50 percent files from your mind and insert the 80/20 percent files. Or rather said the principle of imbalance files.
Did you find this article helpful? Is there a business topic you will like to know about? If yes, tell me in the comment section.
The Pareto Principle has proven to work over the years. Apply it to your business and watch your productivity Skyrocket!