How do you optimize your time and resources?

The 80/20 concept was invented by an Italian economist Vilfredo Pareto in 1906. The Pareto rule states that 80% of results come from just 20% of actions. This Pareto principle is a common rule of thumb in business.?It states that for many business events, roughly 80% of the results come from 20% of the causes.

There is nothing special about the number 80% mathematically, but many business constructs support the 80/20 rule as a valid distribution of results. As an example, through a study, you may determine that 80% of your sales come from 20% of your clients.

• More than?80?percent?of the?wealth?in the United States belongs to?20?percent of the?population
• Research has determined that in United States, 20 percent of patients use 80 percent of health care resources.
• Several criminology studies have found that 80 percent of crimes are committed by 20 percent of criminals.

Business Rule of Thumb

Many of us?have a pattern of activities and behaviors we consider important. However, if we examine these closely, we will find that most of what we spend our time doing is probably not essential and does not even result in the desired outcomes.

We have continued to associate achievement and success with more time and effort spent. However, the Pareto Principle illustrates that 80 percent of our time is spent on things that may not be essential. The goal should be to apply the 80/20 rule to any business activity, to identify which 20% of all business activities are producing 80% of the desired business results.

• If 80 percent of your sales come from 20 percent of our clients, change the distribution of sales resources and time.
• If 80 percent of our profits come on 20 percent of your product line, you should reallocate your product development and customer resources accordingly.
• If 20 percent of your investments produce 80 percent of your profits, reallocate your capital investments

How can we apply the 80/20 rule to allocate time, the CEO most valuable resource?

Divide your day into essentials and non-essentials

• Essentials include employees, customers and service issues
• Non-essentials include activities that compete for your attention
• Delegate email, social media updates or busywork tasks to your staff
• Review time allocated to travel, meetings and conferences
• Delegate some non-essential activities to subordinates

Bottom-line: Allocate time and energy to activities which produce desired outcomes?