Advertising
Advertising

3 Reasons to Forget the 80/20 Rule and Focus on the 4 Percent

3 Reasons to Forget the 80/20 Rule and Focus on the 4 Percent

The number one mistake entrepreneurs make is that they don’t know the ROI (return on investment) of their time. As an entrepreneur I’m guilty of that as well. It’s easy to get distracted and focus on a billion things at once and not see much success from it. In fact, we feel compelled to dip our hands into many different projects.

It wasn’t until recently that I figured out how to leverage my time to see an insane ROI. I would never have figured it out if I hadn’t sat down with the Freedom Entrepreneur himself, Chris Duncan. Christopher Duncan is the embodiment of the freedom entrepreneur. In fact, that’s the slogan by which he lives. He works smarter and not harder which allows him to run eight companies- three of which do seven figures a year- and still be able to work wherever he wants.

    When he says that you can live a life with total freedom, that’s exactly what he means, but because people usually don’t know the ROI of their last hour or the ROI of their staff members they are not able to grow their businesses as fast as they’d like. The problem with not measuring output and productivity is that life can become an endless, unproductive hustle. Here’s a new concept I learned from Chris. Most entrepreneurs know the 80/20 rule- that 80% of your results will come from 20% of your efforts. However, if there’s an 80/20 rule then there must be an 80/20 of that 80/20 which is the 4% that will bring you 64% of your results. This means that you only need to know the needle movers of your business that make most of the difference. You don’t need to do everything else that people think they need to do.

    Advertising

    The 4% is what Chris calls the money-making activity. It’s what you can do repeatedly to make all the money. Here are three things you can do to make sure you’re utilising the 4% concept to its fullest potential.

    1. Anything outside of the 20% must be delegated.

    Now the question becomes how to figure out what that 4% is. The answer is quite simple. The 4% is the money-making activity which I mentioned above but if you don’t know what that is, you should track where you’re spending your time and what activities bring you the most money.

    Put a timer on your phone for every 30 minutes between the time you wake up and the time you go to bed. Every time the timer goes off, write down what you did that past half hour. The point is not to change your daily routine just because you have the alarm. The point is to track what you do on a daily basis so that you can figure out where you’re wasting your time and what you can delegate.

    Here’s an example.

    Advertising

    12:00 pm

    • Hired someone on Fiverr to make a media package form.
    • Created some part of form.
    • Wrote down services for future reference.
    • Created Google Drive for web developer w/ info.

    12:30 pm

    • Set up Calendly.
    • Created contact page w/ Calendly.

    1:00 pm

    • Talked with client about his press.
    • Scheduled more calls.
    • Friend came over.
    • Created my own form instead of Fiverr.

    This provides a clear picture of what you do day in and day out. You can eliminate the activities that aren’t beneficial for your business and delegate repetitive tasks that don’t do much to grow your business.

    Advertising

    2. The 4% is cashflow.

    The 4% is the needle movers in your business- the few activities that if you did more of would grow your business exponentially. Chances are if you track how you use your time, you’ll find that the 4% is cashflow. Make sure that the money coming into your business is more than the money going out of your business. This way your business will survive and thrive. If you don’t master cashflow then you will be simply getting by. After identifying what you should be doing and what should be delegated, you should do double what makes the money.

    It can be easy for entrepreneurs to get sidetracked by doing things that don’t yield many results. Here’s an example I recently found on Facebook that shows the difference in results by only focusing on what matters.

      Now instead of being busy he’s being productive.

      Advertising

      3. Double what works.

      Once you know that you should live by the 4% rule, you need to focus more of your time and energy on that. It’s one of the reasons successful entrepreneurs like Gary Vaynerchuk say that you should focus completely on your strengths- not your weaknesses. It’s the reason why other entrepreneurs tell their followers to increase what works. That’s the way to build a business faster.

      In the previous paragraphs I talked about how to identify what the 4% is and how to leverage it in your business. I’m going to use Chris as an example. Chris knew that in his business he was getting massive results- crushing 60K- by putting on webinars and not doing the traditional blog posts to generate leads. Since he knew this was the moneymaker for him, all he needed to do was to get more people on the webinar or put on more webinars to make more money. He grew his business to six-figure months by solely focusing on partnerships and webinars. Anything outside of that activity he hired or delegated.

      If you know that 4% of your efforts bring in most of the results, then you should double the amount of time you spend on the 4% to increase your results.

      Featured photo credit: http://www.huffingtonpost.com/ via huffingtonpost.com

      More by this author

      Adnan Manzoor

      Data Analyst & Life Coach

      50 Free Online Resources for Self-Motivated Learners How to Relieve A Toothache When A Dentist Isn’t Nearby? Say Goodbye to Sleepless Nights! 10 Essential Oils That Help You Sleep Soundly. Are You Obsessed with Your Sneakers? They Can Be The Cause of Smelly Feet 5 Simple Tips to Reduce Stress and Stop Anxiety Quickly

      Trending in Productivity

      1 How to Set Stretch Goals and Keep Your Team Motivated 2 How Self Care Can Help You Live Your Best Life 3 How to Develop Mental Toughness to Help You Stay Strong 4 How to Calm Down When You’re Stressed and Anxious 5 How to Reinvent Yourself And Redefine Your Future

      Read Next

      Advertising
      Advertising
      Advertising

      Last Updated on April 23, 2019

      How to Set Stretch Goals and Keep Your Team Motivated

      How to Set Stretch Goals and Keep Your Team Motivated

      Stretch goals are a lot like physical fitness. When you adopt a physical sport such as running, continual practice leads to increased stamina, growth and progress.

      While commitment to the sport improves performance, true growth happens when you are stretched beyond your comfort zone. I know this from personal experience.

      For years, I was an avid runner. I ran with a variety of running groups in the Washington, D.C., area and in Columbus, Ohio, where I lived prior to moving to the nation’s capital in 2011.

      While I was initially fearful about slacking off on my exercise habit when I moved to D.C., running enthusiasts in the area provided continual motivation, inspiring me to lace up my shoes day after day. Much to my surprise, many of the area’s running stores (including Pacers and Potomac River Running) boasted running groups that met in the mornings and evenings. So, it was relatively easy for a newcomer like me to connect with like-minded peers.

      I was never a particularly fast runner, but I enjoyed the afterglow of the sport: being completely drained but feeling a sense of accomplishment; setting and reaching goals; buying and wearing out new tennis shoes. The sound of throngs of feet pounding the pavement in semi-unison is still enough to bring tears to my eyes. Yes, I sometimes tear up at the start of races.

      Of all the groups I ran with, the Pacers Store group that met on Monday nights in Logan Circle boasted the fastest runners. I met up with the group week after week only to be the slowest runner. It was difficult to muster the courage to get up every week and meet the group knowing what was waiting for me: sweating and watching the backs of fellow runners.

      Each time I joined the group, I was stretching myself without even realizing it. Instead of feeling like I was transitioning into a better running, for a long time I felt I was torturing myself.

      Then something remarkable happened. I went for a run with a different set of runners and noticed my time had improved. I was running at a faster pace and doing so with ease. What was once uncomfortable for me I now handled with ease.

      The reason I was becoming a better runner was because I was taking myself out of my comfort zone and challenging myself physically and mentally. This example illustrates the process of growth.

      Fortunately, we can create situations that stretch us in our personal and professional lives.

      What Is a Stretch Goal?

      A stretch goal – as authors Sim B. Sitkin, C. Chet Miller and Kelly E. See detail an article “The Stretch Goal Paradox” in Harvard Business Review[1] – is something that is extremely difficult and novel. It is something that not everyone does, and it’s sometimes considered impossible.

      Advertising

      In general, you establish stretch goals by doing things that are difficult or temporarily challenging.

      For instance, when I was first promoted to a senior communications management role, I knew I needed to beef up my relationships with media personalities. I set a goal to once a month book a day of media interviews in New York City – which is home to many media outlets, including SiriusXM radio, CNN, NBC News, HuffPost, VIBE.

      This was a huge goal because it meant not only identifying the right people to meet with but convincing them to meet with me and my team. While I didn’t end up meeting the goal of doing a full day of media interviews in New York City, I met more people than I would have met had I not established the goal and instead stayed in the comfort of my D.C. office.

      It is important to note that just because you establish a stretch goal doesn’t mean you’ll achieve the goal each time. However, the process of trying is guaranteed to provide some level of growth.

      The Importance of Creating Stretch Goals

      The beginning of the year is a perfect time to assess where you are excelling and where there is room for you to grow. I typically start the year by creating a yearlong strategic plan for myself.

      I think about the things that are necessary to do and things that would be cool to do. I assess the people I should know and think through how to meet them. Then I ask myself if the goals are realistic and what would need to happen for me to achieve them.

      Over time, I have learned that there are five things I can do to set stretch goals:

      1. Get Outside of Your Head

      If I exist within the confines of my imagination, I imperil my own growth and creativity.

      If I examine my accomplishments and celebrate them in isolation of others’ accomplishments, my vantage point is limited.

      I want to be comfortable with what I accomplish, but I also want to be motivated by watching others. In some respects, stretching is about expanding your network of friends, associates and mentors. These are the people who will propel or slow your growth and development.

      Since two are better than one, I always value being able to share my progress with others, seek feedback and then map a plan for success.

      Advertising

      2. Focus on a Couple Areas at a Time

      When setting goals, it is important to focus on a couple of areas at a time. Most of us are only able to focus on a few things at a time, and if you feel you are unable to tackle all that is before you, you may simply disengage.

      I see this in so many areas of life:

      When people get in debt, if they believe the debt is insurmountable, they refuse to look at incoming bills for fear of facing down the debt. Unfortunately, many businesses go awry when setting stretch goals.

      In “The Stretch Goal Paradox,” Sitkin, Miller and See note:

      “Our research suggests that though the use of stretch goals is quite common, successful use is not. And many executives set far too many stretch goals. In the past five years, for example, Tesla failed to meet more than 20 of founder Elon Musk’s ambitious projections and missed half of them by nearly a year, according to the Wall Street Journal.”

      Goal-setting is like a marathon, not a sprint. It doesn’t all need to happen at the same time, and pacing is extremely important if you want to get to the finish line. It is better to focus on a couple goals at a time, master them and then move on to the next thing.

      3. Set Aside Time Each Year to Focus on Goal-Setting

      When I was a managing director for communications for the Advancement Project, I spent the first part of every year facilitating a communications planning meeting.

      The planning meeting began with the team members assessing the goals the team had established in the preceding year, and whether those goals were realistic or not. If we failed to meet certain goals, we broke down why that happened. From there, we brainstormed about possibilities for the current year.

      For instance, one year we set a goal of pitching and getting 24 opinion essays published. This was audacious because no one on the eight-person team had the luxury of focusing exclusively on editing and pitching opinion essays to publications around the world. We would need to focus on pitching in between the rest of our work.

      We hit this goal within the first eight months of the year. Remarkably, in total, we ended up getting 40 opinion essays published that year, which was an indication that our original goal was too low. We upped the goal to 41 the next year, and amazingly, we hit 42 published opinion essays or guest columns.

      From this experience, we not only learned what was feasible, we also learned the power of focus.

      Advertising

      When we focused as a team on getting the commentary on our issues out in the public domain, we were successful. The key in all of this is that there was a ton of discussion around which goal we’d pursue and why.

      Equally important, as a manager, I didn’t set the goals alone; the team members and I established the goals collaboratively. This ensured buy-in from each individual.

      4. Use the S.M.A.R.T. Goal Model to Set Realistic Goals

      S.M.A.R.T.

      is a synonym for specific, measurable, attainable, realistic and time-bound. For the sake of this article, the realistic portion of the acronym is most important.

      While you want to set audacious goals, you want to ensure that they are realistic as well. No one is served by setting a goal that is impossible to accomplish.

      Failing to meet goals can be demoralizing for teams, so it’s important to be sober-eyed about what is possible. Additionally, the purpose of setting goals is to advance and grow, not depress morale.

      For instance, my team would have been discouraged had I begun the year asking it to pitch and place 40 opinion essays if we didn’t already have a track record of placing close to two dozen essays.

      By using the S.M.A.R.T. formula, we were able to achieve all that we set out to do.

      5. Break the Goal up into Small Digestible Parts

      I am a recovering perfectionist. As a writer, being a perfectionist can be counterproductive because I can fail to start if I don’t see a clear pathway to victory.

      The same is true with goal-setting. That’s why I join Lifehack’s fellow contributor Deb Knobelman, Ph.D., in noting that it is critically important to break goals into bite-sized chunks.

      When I had a goal of doing daylong media meetings in New York City, I had to think through all the barriers to achieving that goal and all the steps required to meet the goal.

      Advertising

      One step was identifying which reporters, producers and hosts to engage. Another step was writing a pitch or meeting invitation that would capture their attention. Another step was thinking through the program areas I wanted to highlight and the new angles I could offer to different reporters.

      Since reporters want to cover stories that no one else has written, I needed to come up with fresh angles for each of the reporters I was engaging. An additional step was thinking through who from my team I’d take with me to the various meetings.

      I was clear that, as a talking head, as public relations reps are sometimes called, I needed the right spokesperson in order to land repeated meetings with different outlets.

      A final step was thinking through what I needed to bring to each meeting and which reports, videos and testimonials would buttress our claims and be of interest to media figures.

      As I walked through what was needed to bring my goal of doing daylong meetings to reality, I realized that not only was the idea within reach, but I was excited to tackle the challenge.

      From that point until now, I have learned to break down goals into smaller parts and tackle the smaller parts on the path to knocking the goal out of the park.

      The Bottom Line

      These are my recommendations for setting stretch goals, and there are a ton of other resources to support you in the workplace and in your community.

      For instance, LinkedIn’s Lynda.com platform has a wonderful suite of leadership development videos, including ones on establishing stretch goals. This is a paid resource but may be worth the investment if you lead a team or want to invest in tools for your own growth and development.

      Featured photo credit: Avatar of user Isaac Smith Isaac Smith @isaacmsmith Isaac Smith via unsplash.com

      Reference

      [1] Harvard Business Review: The Stretch Goal Paradox

      Read Next