Focus on Impact
You might know this 'law of the vital few' under one of its synonyms: the 80-20 rule, pareto efficiency, the rule of diminishing returns, to name a few. There's a wide range of matters where this rule can be applied successfully and some others, where it cannot. In this post I will build a strong case why you should apply this rule in your everyday work life and how to best leverage it on some of the most vital aspects of life.
Theory Basics
According to the 80-20 rule 80% of outcome is caused by 20% of input. For instance this could be applied in sales as to a company that makes 80% of profit with 20% of its customers, or a carpenter that uses 20% of his toolset for 80% of the work, or that most people spend 80% of their total time consumed by their smartphone on 20% of the apps and so on, 80% of global CO2 emissions are caused by 20% of the nations worldwide (probably even significantly less). One significant fact to note is that this rule is indifferent to beneficial or hazardous outcomes. So much for the theory. In sales and in logistics there is a widely popular clustering method for goods according to their individual contribution to the overall margin/turnover/profit (depending on the analysis) - the so-called ABC-classification. In this classification each product is ranked according to its contribution to the overall KPI, e.g. profit. So the product that contributed the most profit will rank highes and the product with the less profit share will rank lowest. Considering the accumulated profits of each product from top to bottom of the list, we descend until we arrive at a value equal or greater than 80% of the overall profit - these are our 'A'-products and will account for roughly 20% of the product portfolio of -finished- products. The next 15% of profit are 'B'-products and the final scrap that makes up the bottom 5% of profit will be labelled 'C'-products. A cool thing about this classification method is, you can apply it on multiple subjects in life.
Practical Applications
One of the fields where I apply the ABC-segmentation intuitively is my time management. To begin with I rank my daily tasks according to their value. This might seem arbitrary, because the value I assign to any of my tasks is of course not done in a spreadsheet and the process itself is not overly formal. However I am sure it is an effective and helpful exercise that renders tremendous benefits in the long run. Here's how I do it:
A is for Awesomeness
Tasks in this category are complicated and urgent. The first step therefore is a very lean approach. I simply give all the tasks that I am not able to delegate an 'A'. These are tasks that require my experience, skill, knowledge and so on and therefore cannot be easily done by anyone else without further instructions or intense guidance. It would simply take too much time and effort to have someone trained, organized or purchased (externally). Also these tasks typically take some effort and focus on my side. Because of this they can not easily be batched up and I require some uninterrupted time to be able to finish them efficiently. These are tasks like creating a solution to a problem, writing on a concept, planning/preparing an important meeting with the client (e.g. sales pitch, steering committee) and so on. I am not going to lie: these are my favorite tasks - if all my work week consisted of exclusively such tasks, I might finish work way ahead of time and my impact on business would not be significantly lower than the level I achieve with additional B- (and sometimes even C-) tasks.
B is for Busy-Bee
These are typically not too complex but still high effort tasks. All those tasks I could potentially delegate to someone because they have an adequate understanding of the matter, the appropriate qualification, a sufficient high level of specialization on the required field (e.g. creating dashboards, presentations, review documents) or have a comparative(!) cost advantage, are labelled with a 'B'. Besides other factors the difference between comparative and absolute cost advantage is key here. To give you a specific example: If there's a task I could perform in one hour and a junior colleague can perform in 3 hours it still can be beneficial overall for her to finish the task. This is because yes, it might take her two additional hours more to finish the task compared to me and the task might become more expensive in total, compared to if I would have finished it. However taking into account that her taking over the a B-task -which she can absolutely finish in the required quality- will free up one hour of my capacity so that I can work on an A-task. This means I could possibly perform these B-tasks myself but there's a cost of opportunity to me finishing B-tasks, while instead I could focus on A-tasks. I will not say this doesn't take discipline on my side. However I think nobody can ever become a true leader, if one crams up his own schedule with tasks that keep him busy instead of tasks that deliver a maximum value in the first place.
C is for Clutter
And finally anything else is marked a 'C' task, meaning it renders little or no value. Spoiler alert: C-tasks are outright candidates for the bin. I regard C-tasks as toxic distractions that pose a serious threat to my work. It is not the lack in value of C-tasks, but rather the disproportionately high ratio of cost (in terms of disturbance of my limited attention and concentration) relative to value why I seek to eliminate C-tasks from my schedule. Most of the time I already have automatisms in place to not even be bothered by C-tasks. For instance, I have certain rules for incoming email that filter out and delete emails with certain characteristics. In everyday life it is harder to filter out C-tasks. At some point C-tasks will consume some of your time. In that case it is important to watch out this time is not your A-tasks time.
Key Takeaways
- Focus on Awesomeness.
- Surround yourself with Busy-Bees.
- Don't let any Clutter divert your focus.
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