Sunday, July 26, 2009

What Matters Most

Things which matter most must never be at the mercy of things that matter least. Goethe

The Pareto principle (also known as the 80/20 rule) states that, for many events, roughly 80% of the effects come from 20% of the causes.

This principle was named after Italian economist Vilfredo Pareto, who observed that 80% of the land in Italy was owned by 20% of the population. But enough people have observed this principle at work in other areas that it’s worth considering its application to our lives in general.

I’ve seen this in my garden, for example: 20% of my tomato plants are producing 80% of my fruit. It used to confuse me how one plant would be heavy with fruit while the others produced so little, but the Pareto Principle helps me understand it.

In his book The 4-Hour Work Week, Tim Ferriss explains how his business took off when he started applying the Pareto Principle. He looked over his balance sheets and saw that 80% of his sales came from 20% of his products. He also noticed that just a small percentage of problem clients were taking up the majority of his time.

Drawing on these insights, he refocused his energy on his most successful products. And—in one of the most memorable stories from the book—he “fired” his three most problematic clients, informing them that they could either order via fax—the most hassle-free method of ordering he had—or they could look elsewhere for his product. As a result, he cut his workload significantly while doubling the volume of his sales.

What I took away from Ferriss’ exploration of the principle was its dual nature. Based on his experiences—and on my own—you have a choice: you can exert your energy in the direction that brings you the greatest rewards—often seemingly without any great effort on your part—or you can direct your energy where getting even the smallest amount of return seems like an uphill climb.

I shared this principle recently with one of my coaching clients. She is a brilliant entrepreneur and yet she often feels overwhelmed and frustrated. She has been spending the bulk of her time satisfying other people in ways that have little or nothing to do with what brings her satisfaction.

She still has something to show for her time and energy—her colleagues love her, and her clients see her as a sort of superhero fighting for their success—but these were not the rewards she was looking for when she started her business.

On the other hand, she could see areas where she did want to direct her energy. She engaged volunteers to write newsletters and keep up with other social media. She hired an assistant to take care of aspects of the business that did not require her immediate attention, like responding to emails.

Delegating her responsibilities frees up time to do what she’s really good at – providing services and developing new ideas - while still allowing her to do other things she loves – like preparing and enjoying meals with her partner, taking walks with her dogs and meeting friends for bike rides. And she is happier than she ever thought possible.

Most folks would agree that the majority of their time is not spent on their priorities or the aspects of their lives they find most gratifying, and that’s why they can benefit from this principle.

To apply the Pareto principle to your life you only have to do one thing – focus your attention on what matters most, the things you do well and what makes you happy.

This week I'm rejoicing in local food - simple preparations of seasonal fare are always delicious and free up time to go for more walks in the evening (with a stop at the playground) and spot the last of the fireflies.

What about you? What do you enjoy most and how will you give it more attention?

2 comments:

Angela Barton said...

I agree with this principal completely. I usually think of it as 95%/5%, but it's the same idea.

Off the top of my head, 5% of my Facebook friends do 95% of the "talking"!

This post also reminds me of a dentist I met years ago who told me he had "fired" his most difficult patients, and it changed his life.

I think a lot of the issue is that we're trained to think life is HARD, and that anything you really want is worth working HARD for, etc.

But my experience is more like yours- when we concentrate on the stuff we're good at and that's important to us- things come almost effortlessly into our lives.

I'm putting my focus this year into writing, relationships, and health. It's paying off!

Thanks Stacey.

Stacey said...

Hi Angela! Thanks so much for sharing your insights and stories - great stuff! And you are on Facebook, too? Expect to receive a "friend invitation" from me soon! :-)