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The 80/20 Principle: How to identify the clutter in your life and business

After hearing frequent references to the book “The 4-Hour Workweek,” I finally decided to put my assumptions aside and pick up a copy. To say I was skeptical is an understatement. The title of the book sounded just as cheesy and unstable as a pyramid scheme and I feared for what our “get rich quick” culture was buying into now. I wanted to be wrong about the book – and so far I can say that I was. While my reading has only progressed to page 139, I have already stumbled upon a few intriguing thoughts of author Timothy Ferriss. The most shocking realization is that he and I share a similar personality type and view on effectiveness in both work and play. I could spend weeks’ worth of blog posts regurgitating what I’ve read so far because it’s what I would tell (and have told) those who contact me for entrepreneurial advice. But instead, I want to share just one principle from the book which I’ve found to be the most thought provoking for my own business and life – The 80/20 Principle.

peapodThe 80/20 Principle or The Pareto Principle is by no means new. In fact, it was concocted by Vilfredo Pareto, an Italian economist who lived from 1848 to 1923. The boiled down back story is that through mathematical formula Pareto discovered that 80% of the wealth and income was produced and possessed by 20% of the population. And this application goes far beyond economics or distribution of wealth. Supposedly 80% of Pareto’s garden peas were produced by 20% of the pea pods he had planted. Since we don’t all grow peas, here are a few more relatable examples from the book:

  • 80% of the consequences flow from 20% of the causes.
  • 80% of the results come from 20% of the effort and time.
  • 80% of company profits come from 20% of the products and customers.
  • 80% of all stock market gains are realized by 20% of the investors and 20% of an individual portfolio.

At first glance I found this theory to be merely intriguing, but at further thought I realized it to be scarily accurate about my own life. The numbers 80 and 20 are the minimum ratio, but you too might find that some aspects of your life are more like 90/10, 95/5 or even 99/1. This concept made me take a critical look at my business and personal life. As I applied Pareto’s Principle, I had to answer some tough questions about clutter, time wasters and frustrations that were holding me back.

Applying 80/20 to Work – Nearly all businesses have more than one revenue stream. This could be a collection of different clients, projects, services and products. As a nurturing business owner, we naturally want to see all of these streams grow with equal strength. The tough realization is that this just isn’t always possible. So I had to ask myself, “Which 20% of my work and clients are resulting in 80% of my profits?” After crunching the numbers, I found that my ratio was even more skewed than 80/20. I don’t think this is necessarily good or bad, it’s just a realization of which you must be aware. Identifying the clients that account for the majority of my income helped me to also identify the qualities they have in common. I now have a clear understanding of my “ideal” client that I can market my services toward most heavily in the future. These are the ones I’m best suited to serve and the ones that will contribute most significantly to my bottom line. So long as my bandwidth allows, I will still continue to work with all clients (regardless of whether they fall into the “ideal” category or not); however, it’s infinitely helpful to know who I should be actively seeking when I’m in a cycle of business growth.

Applying 80/20 to Life – The Pareto Principle easily lends itself for application to economics or business, but what about personal life? To do this, I had to change the question I was asking myself. Instead of using money or clients as the measurements, I used happiness and stress. Which 20% of sources are causing 80% of my stress? And which 20% of sources are resulting in 80% of my happiness? I examined all the ways in which I use my free time. This includes hobbies, friendships, exercise/health, relaxation, etc. This principle helped me to personally identify the things that give me the most joy and the things that I could stand to eliminate. In doing so, I immediately reduced some of the stressors and time wasters in my every day. I even found areas within my budget where I could save money as the result of these eliminations.

We have just enough time each day to get done everything we need and want to do. We just have to learn how to identify which few inputs produce the greatest results for our time and energy. The 80/20 Principle doesn’t deter me from adding new things to my life, but it does make me regularly evaluate everything I have going on, prioritize the things that bring me happiness or fulfillment and eliminate the rest. Evaluate, prioritize and eliminate – this is the cycle that will help me to work smarter, not harder and to keep all aspects of my life uncluttered.

I look forward to continuing “The 4-Hour Workweek” with less skepticism than when I started. Even if my end goal isn’t working just four hours (and I’m not sure it is), I’m energized to read the ramblings of someone with whom I can relate. It’s encouraging to know there’s someone else out there who has ventured down a similar road and has lived to write intelligently about it…

 
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Posted by on January 21, 2013 in Business & Success, Life

 

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Clearing Out The Mental Clutter

mental clutter imageSimply put, clutter is stuck energy. It’s a clog in our mental piping that prevents us from working, communicating and acting as effectively as we could. There are more than enough mental-clearing techniques to help us relax and refocus, but these don’t address the ways in which we rebuild the same cluttered mind every day. Here are just instances in which mental clutter may be messing with your psyche and some easily implemented fixes to help you start moving forward.

Clean out your email inbox…every single day – Take a moment and click over to your email. What does your inbox look like right now? If this is the beginning or middle of the work day for you, chances are you’ve accumulated quite a few messages. That’s normal. But how many of these messages were rolled over from the last work day? Some of these messages may even be from several days or weeks ago. If so, you’ve unknowingly been creating your own landfill of emails which might be making for a pretty unpleasant work environment. The fix? Clear the inbox clutter by treating it like a to-do list. Any email that comes in should be read and prioritized before the day’s end. Some emails are a quick response and easily taken care of. Others will require some time or further action before it can be considered ready to archive. For these types of message – utilize folders! I’m always surprised by the number of people who don’t take advantage of the folder organization Outlook and Gmail provides. Label them with titles most applicable for the messages you commonly deal with and the actions they require. With these messages organized, you’ll never risk them “disappearing” under the heap of emails that build up over a week’s or month’s time. Since starting this practice myself, I’ve been much more aware of the messages requiring my response at any given time, know where to find them when I need them and have all but eliminated the dreaded “I don’t think I ever saw that email” moment.

Remove mental clutter by removing physical clutter – I’m not sure when this began for me, but to this day if I’m in a messy environment, I can’t work as effectively. I need to have a clear space which translates to a clear mind. In the midst of a project or a busy day, it’s completely acceptable to have some small mountains of paper fill your desk, but by the day’s end be sure these mountains aren’t left for you to climb over the next morning. If you tackle your physical clutter every day, each new day will begin with a clear desk and a clear mind.

Capture your thoughts in writing – In a world surrounded by cutting-edge technology, you may be surprised to know that we’re still allowed to be human. By this I mean we aren’t expected to commit every task, appointment, phone conversation or change in plans to memory. The times in which I have a lot of mental notes to remember are among the times when my mind feels the most cluttered and least productive. So write it down! Whether this is a pen and paper to-do list, phone app, word document or calendar reminder, capture your thoughts however best fits your lifestyle. It’s simple…the more you put in writing, the less that’s on your mind.

Eliminate unnecessary noise – When I first began running Bennis Inc I would often keep a television set or music on for “background noise.” It’s not so much that I would become distracted by the show on TV or the artist singing the song, but I would become distracted (and irritated) simply by the noise. It was competing with my inner thoughts and making me work harder to concentrate on the task at hand. The silliest part is that I was self-inflicting this irritation and audio clutter. I now recognize that I prefer to work in as close to a silent environment as possible. Some days this can even be setting the phone to vibrate and turning off email alerts. I don’t doubt that some people may work better with a little bit of background noise, but I urge you to try at least one day “working silent” to be sure you’ve given this option a fair shot. It’s not boring when your thoughts really get on a roll!

Address what’s really fogging your mind – If you’ve made your best effort to eliminate all of the mental clutter by following the steps listed above, but you’re still feeling fuzzy and unfocused, there’s a good chance there’s something else in play. What’s really fogging your mind? Mental blocks can come from feelings we’re harboring about a relationship problem, financial stress, or recent negative experience. These aren’t just clutter; these are actual issues that should be dealt with fully. If a personal situation has you distracted in other areas of life, you can’t bury it deeper and hope it will go away. The best thing to do to resolve this completely is to talk it out, go for a run to clear your head or seek a solution if one is possible. Once this major mental plug is removed, you can return to addressing the rest of the minor clutter rolling around.

Whether your mind is cluttered or organized right now, share with us some of your struggles or secrets to achieving a clear mind!

 

 
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Posted by on October 29, 2012 in Business & Success, Life

 

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