02 Aug How to achieve more with less

We’ve all heard the line ‘work smarter, not harder’ and most of us understand what it means, but few of us are truly nailing it when it comes to how we do our jobs. That is – the way we spend time and energy on activities that earn us money, or make our businesses profit, could be better utilised if we knew exactly where to focus our efforts.

Thanks to the 80/20 principle, aka the Pareto Principle, aka the Law of the Vital Few there is help available as we strive to be successful within the limited amount of time we are given in life.

The 80/20 principle asserts that there is no direct relationship between efforts and results, causes and consequences, inputs and outputs. There are some easy things you can do which lead to excellent results, and there are some hard things you can do which lead to poor results. The 80/20 principle tells us that the majority of effort and resources we use is largely wasted.

80/20 is not always precisely true. It could be 70/30 or 90/10 or 95/5. What’s important to understand is that 50% of effort rarely leads to 50% of results.

Here are some common observations of the 80/20 principle showing up in different areas of life, business and work:

• 20% of your time leads to 80% of what you achieve
• 20% of how you arrange your life leads to 80% of your happiness
• 80% of your time with friends is spent with only a fraction of your friends (the vital few)
• 20% of your investments will give you 80% of your returns
• 80% of customers use only 20% of software features
• 80% of software issues come from 20% of the bugs
• Most of us wear 20% of our clothes 80% of the time
• 20% of motorists cause 80% of road accidents
• 20% of criminals account for 80% of the value of all crime
• 80% of your grief comes from 20% of your customers (and staff!)
• 80% of your profit comes from 20% of your customers
• 20% of your menu accounts for 80% of your sales
• 20% of your customer-facing staff generate 80% of your sales
• 80% of your profits are generated during 20% of your opening hours

The key to benefiting from the 80/20 principle in a business or work context is to identify the few methods, techniques, products, people, activities, uses of time etc. which will lead to great results and use them more, while minimising (if not completely avoiding) the things that don’t. If you know the 20% of causes which give you 80% of the results, you can double down on the vital 20%, which will then have a multiplying effect on the positive results you achieve.

So what does ‘working smarter not harder’ look like in a hospitality business?

Consider these ideas as a starting point, to get you looking for opportunities.

• Identify the 20% of products that accounts for 80% of your profits and ensure that the quality and consistency of these items is maintained
• Direct any sales and marketing effort toward selling the products that account for most of your profits
• Identify the 20% of your customers responsible for 80% of your profits and make sure they remain loyal to your business for ever
• If you are frustrated by customers occupying valuable seats/tables for very little return, you have an opportunity. Identify the customers you can afford to loose (if not benefit from loosing) and look for ways of encouraging them to try somewhere else (let them be someone else’s burden). 1 Flat White and a bottle of tap water between 3 people anyone?!
• Identify the top 20% of your most productive employees and keep them happy (don’t lose these valuable people!)
• Find the top 20% of salespeople in your team and find out how they do it, then get them to help with the training of others
• Don’t waste time trying to correct the performance of the 20% who are least productive, instead use that time to recruit and train more of the kinds of people who represent the top 20% of performers in your team (after all, they are ones who account for 80% of the results!)
• Limit the time and effort spent trying to cut costs and expand your efforts to grow your business and generate more revenue
• Don’t attend a meeting unless there is an agenda. How much time is wasted in meetings?

A simple way to apply the 80/20 principle to improve your own results is to identify the times throughout the day when you are most productive and least productive, and understand why. You might find that you can double the amount you achieve each day simply by changing your work routine or location. I personally get more valuable work done before 9am than most other times of day, because the phone rarely rings before then.

If you can find your vital ‘20’ and double or even triple it, you’ll work less, earn more and be happier.