When I think of Italy, images of canals, the Sistine Chapel, and the Leaning Tower of Pisa come to mind.
I certainly don’t think of scruffy Italian men from centuries ago.
And yet, there are two Italian men who have a hand in helping you streamline your business and increase your profitability at the same time.
Say hello to Fibonacci (fib-oh-NAH-chee) and Pareto (pah-RAY-toh). One is an Italian mathematician of the 1200’s, the other, an Italian Economist and educator of the early 1900’s.
As boring as it may sound, these two guys can give you a clear head when it comes to balancing your work for maximum effectiveness.
Fibonacci was actually born in Pisa. He devised the Fibonacci sequence: a series of numbers in mathematical relationship, that ultimately led to the discovery of The Golden Ratio (not to be confused with the Golden Rule). Simply put, the Golden Ratio is a nearly perfect proportion that exists in nature: roughly a 60/40 ratio.
Pareto, is more likely to be recognized as the man who developed what became “Pareto’s Law”, more commonly known as “The 80/20 Rule”. Pareto noticed a naturlawhat he called the “vital few”, the top 20 percent, and the “trivial many”, the bottom 80 percent.
Essentially, the 80/20 Rule states that 80% of your results will come from 20% of the effort and 20% of your clients will produce 80% of your income.
In fact, it is reputed that Jack Welch, former CEO of General Electric, used this very rule when deciding who to fire – the lowest performing 20% were the first to be let go.
You’ve probably heard a lot more about Pareto’s Law than you have the Golden Ratio. But it’s the Golden Ratio that puts the oomph in Pareto’s Law.
In my coaching, I drive my clients to focus on their income producing activities. Often, they have no idea what those activities are. Knowing what to focus on is a topic for another article. This article shows you how it all works.
The Golden Ratio suggests that there is a 60/40 split we must maintain in our business. It happens naturally. 60 percent of our time should be focused on income producing activities (which includes marketing), while the other 40% of our time should be used to manage the other areas of our business. In a 5 hour work day, 3 hours should focus on marketing and the actual EARNING of income, while 2 hours may be split up amongst other business activites.
So how does the 80/20 rule fit in? Simple. The 80/20 rule is where we focus the TOP 20% of our time. This is where the activities that produce the greatest amount of income should be. In that same 5 hour work day, 1 of those 3 hours should be focused on our most lucrative income producing activities.
But what should you do with all that time?
Tips From the Experts:
International speaker and best selling author, Brian Tracy, says “before you begin work, always ask yourself, ‘Is this task in the top 20 percent of my activities or in the bottom 80 percent?’ The hardest part of any important task is getting started on it in the first place. Once you actually begin work on a valuable task, you will be naturally motivated to continue.”
Don Mastrangelo, author of “Ready, Set, Sell!” suggests investing 80% of your productive time over the next three months doing some type of prospecting for new business. Don says “If you do, you’ll find that from there forward you will never need to invest more than 20% of your time prospecting to keep your momentum going.
Let go of distraction and forget about multitasking. Tim Ferris, author of the 4-Hour Work Week, cites multitasking as a big reason for inefficiency while working. The time it takes to re-focus on a project when multitasking can actually make the project take longer – sometimes substantially longer. If at all possible, focus on one thing at a time. Use a timer if you must, but stay focused.
Keep these ratios in mind the next time you’re planning your workload, and seeking to find balance in your business.
And the next time you visit Pisa, remember Fibonacci and Pareto.