Revisiting the 80/20 Rule

by
Steve August
February 10, 2021
5 Rules for Rocket Ships
,
Ruthless Simplicity

Lately, I’ve been focusing on focusing. I’ve been working on developing a Ruthlessly Simple Business Planning Workshop, and a concept that keeps popping up is the Pareto Principle.

Also known as the 80/20 rule. The Pareto Principle states that for many outcomes, roughly 80% of consequences come from 20% of the causes.

In other words, 20% of your activity will drive 80% of your results.

This rule applies to so many things:

20% of your customers will drive 80% of your revenue
20% of your time will produce 80% of your impact
20% of your marketing/sales activities will produce 80% of your sales
20% of your sales people will drive 80% of your sales

The 80/20 rule is something we all kind of know and take for granted, but recently a guy named Perry Marshall pointed out something that really blew my mind.

He observed that the 80/20 rule is fractal. This means that if you look inside the 20% activity that’s driving your 80% of results, there’s another 80/20 split lurking.  

This means that 20% of the 20% of your time will produce a geometrically greater amount of the impact. If you focus on this, the potential to leverage your efforts is exponential.

So I started looking deeper into what activities I spend my time on in my business. Then I looked inside those activities and identified which roughly 20% of my activities actually creates the greatest impact.

Then I broke down those 20% activities into components and identified which 20% of those components created the most impact.

For example, sending my weekly email to you has a great deal of impact. I consider it a 20% activity. It forces me to crystallize my latest thinking and observations each week. I get to share my thinking and hopefully provide you with value every week. I get to test new ideas and concepts to see which are resonating. And I am able to see who my content is most resonating with.

But if I unpack all the activities I do to deliver my email to you:

- Coming up with topics that matter
- Writing the actual words
- Loading it all into ActiveCampaign and sending
- Picking an image
- Reformatting to post to my site blog and LinkedIn

There are really only 1 or 2 that jump out as highest impact: coming up with the topic and writing the actual words. After that, it’s all ways and means.

If I focus my time on coming up with topics and writing the words and getting better and more organized around that, I’d be creating a lot more impact. Because those activities are creating the IP for my business which can then be transformed into Workshops, Books, Bootcamps, and Online Courses and more valuable materials for my clients.

Now I’ve set it up that I just pick the topic and write the words and my virtual assistants take it from there, freeing me to focus on the 20% of my 20% activities.

So I offer you this challenge for this week: take a look at everything you do, find the 20% that creates 80% of the impact, then look for 20% inside that. Let me know what you find!

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