By David Finkel
Over the past 25 years I have helped thousands of small business owners take their businesses to the next level, and a lot of times doing this has to do with the way they look at and manage their time and their to-do lists. Once you understand that the idea of a direct, one-to-one relationship between time and value is outdated, you can begin to upgrade the use of your time within your business for faster growth and a better work-life balance.
The old 80-20 rule
To upgrade your use of time, you first have to identify what tasks you do that truly create value for your business. And the first step to creating more value per unit of time is to concretely define what your real value-creation activities are and then focus on those activities to help grow your company.
If you’ve read about time management, you’ve probably come across Pareto’s Principle, inspired by the work of 19th-century economist Vilfredo Pareto. Commonly called the “80-20 rule,” Pareto’s Principle states that 20 percent of your actions generate 80 percent of your results (high value) and 80 percent of your actions generate the other 20 percent of your results (low value). We have all been taught to focus on the 20 percent that generates the high-value work…but there is more that we can do.
With my coaching clients I have taken this idea and further refined it to create something that I share in detail in my latest book, The Freedom Formula.
The math (stick with me)
If you take the 20 percent of your actions that generate 80 percent of your results and apply the 80-20 rule to it a second time, then 20 percent of that 20 percent produces 80 percent of 80 percent of your results. That means 4 percent of your effort (the 20 percent of 20 percent) generates 64 percent of your results (80 percent of 80 percent).
Hang in here with me for one more math moment and apply the 80-20 rule one final time. That means that just 1 percent of your effort (20 percent of 20 percent of 20 percent) generates 50 percent of your results!
That’s right–a tiny fraction of your highest-value work produces half of all your results.
No, this is not an exact science. Nor does this just work automatically. But Pareto’s Principle illustrates a valuable point: All time is not valued equally. An hour or two of your best time on Tuesday may have produced a far greater return than 30 to 40 hours of the low-value tasks you “checked off” on Monday, Wednesday, Thursday, and Friday.
The 1 percent that matters
I encourage all business owners to choose one day a week where they block three to four hours out of their day to focus on the 1 percent that produces 50 percent of their results. Turn your cell phone off, shut down your email client, and work on the A-level tasks and projects that really matter. Avoid distractions and other people’s “fires,” and you will soon begin to see the power that comes with upgrading your time.
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David Finkel’s newest bestseller The Freedom Formula is on Sale NOW through 12/2 with the coupon code 20FREE! https://www.amazon.com/Freedom-Formula-Succeed-Business-Sacrificing/dp/1948836408/ He is the author of 12 business books, including his newest release The Freedom Formula. He is the co-author of Scale: Seven Proven Principles to Grow Your Business and Get Your Life Back (written with Priceline.com co-founder Jeff Hoffman), and a respected business thinker. Finkel’s weekly business owner e-letter is read by 100,000 business owners around the world each week. Finkel is the CEO of Maui Mastermind, a business coaching company. Over the past 20 years, Finkel and the other Maui coaches have personally scaled and sold more than $2 billion worth of businesses. Follow him on Twitter at @DavidFinkel.
