Welcome to 4th Quarter! Now’s a good time to consider applying the 80-20 Principle!
“It is not shortage of time that should worry us, but the tendency for the majority of time to be spent in low-quality ways.” – Richard Koch
Can you believe we’re about to start the 4th quarter in just a few days? This is the time to turn on the gas – and head into the last 90 days of the year with momentum!
It feels like just yesterday that we were ringing in the new year (2023) with all its possibilities. Do you remember the goals that you set in January? Did you write them down? Have you achieved most of them, or at least some of them? Just think, we’ll soon be counting down to just double-digit days that are left in this year.
I always like to have a lesson in my Monthly Motivational Messages, and this month I think it would be appropriate to discuss the 80/20 Rule. It is also known as the Pareto Principle, and we can all understand the ratio of how things work when we follow this very special rule.
What Is the 80-20 Rule?
The 80-20 principle states that 80% of outcomes are the results from 20% of all causes for any given event.
This simple ratio is used in both business and economics. Here’s an example from my own business experience: The top 20% of revenue for RADI Medical Systems, Inc. (RADI) came from the top 20% of our customers. You can narrow your focus and concentrate on the top 20% which will yield 80% of results. This principle works in the majority of business scenarios and helps a manager to guide their efforts and understand that the 80% will only bring about minor advantages.
When we started RADI, we only had a small number of sales representatives in the field (including me). We were constantly prioritizing our customers. We called it “sell to the believers.” We went deeper with our products and key centers. We couldn’t be everywhere, so we had to focus on the 20% of hospitals that brought in 80% of revenue.
This allows you to really narrow down your list and focus on what is important. That’s the real lesson. Keep this handy formula top of mind when you need to make another important business decision. The 80/20 ratio works!
Let’s dig a little deeper: How do you apply this principle? Is there an issue you are facing today, a decision that you need to make? Perhaps you have questions about where to prioritize your efforts and time. By making an assessment of the results you want to achieve, you can prioritize your efforts and target the activities that are most likely to yield these results.
If you would like to talk about this principle or about closing the 4th quarter, please book a time for a quick (15 minute-call) with me. Click here to go to my calendar