In sports, the expression "feed the big dog," means giving the ball to your most productive players. Similarly in business — the Pareto principle (often called the 80/20 rule) — says it's vital to direct resources to where they make the most difference. But you have to follow the rule to benefit from it.
"Most businesses unknowingly waste 80% of their resources on activities that produce only 20% of results," said Bill Canady. Canady is CEO of Arrowhead Engineered Products and chairman of Ohio Transmission, which have combined revenue of $2.5 billion. "Stop wasting resources on trivial activities and instead concentrate 80% of your efforts on the 20% of products and customers that actually drive profits and achieve critical results," he said.
Take Bold Action On the 80/20 Rule
Canady, the author of "From Panic To Profit," recommends using the 80/20 rule to launch a company or turn one around. "Imagine starting from scratch — what would it take to serve only your best customers with your best products?" he said.
Keep in mind that 20% of your customers typically produce 80% of your revenue. And 20% of products typically generate 80% of profits. Knowing this will help you keep your eye on efforts that improve the business the most.
Develop Talent With The 80/20 Rule
You must nurture employees who will return the biggest yield. But how?
Roughly 70% of employees' development comes from on-the-job experience. It's important to give employees time to figure things out by themselves. The next 20% comes from mentoring them. This requires more hands-on attention. The final 10% of development comes from a formal training system.
The payoff, Canady said, is 20% of employees drive 80% of productive work.
Bring New Ideas To Your Clients
What stops professionals from executing the 80/20 rule and bringing new ideas to clients? It's their fear of being seen as pushing sales too hard, Matthew Dixon said.
Dixon is a founding partner of DCM Insights, a training and advisory firm. Based on a global study of nearly 3,000 partners in professional services firms, Dixon and his colleague found clients' biggest complaint about the professionals they work with is that they don't hear from them enough.
"Clients tell us that they are so heads-down in their own business priorities that they feel like they have blinders on," Dixon said. "They know that the professionals they work with will talk to more people like them in a week than they'll talk to all year. They want and expect their professionals to bring new ideas to them when they think it's worth their time."
Dixon recommends that professionals ask themselves "What's one thing I wish all of my clients knew about a specific issue or opportunity?" and then use that as the basis for a value-added outreach to clients.
"You'll be surprised how receptive your clients are and how this effort will lead to paid work," Dixon, lead author of "The Activator Advantage: What Today's Rainmakers Do Differently," adds.
Start Building A Business Development Habit
Psychologist Anders Ericsson spent years studying how high performers become high performers. "One of his most startling findings is that spending 100 hours a year – or 18 minutes a day — on a new skill or behavior will enable somebody to perform better than 95% of the population," Dixon said.
So, start building a business development habit by blocking out small chunks of time on the calendar and building from there," Dixon said. "It doesn't take much."
Connect With Your Clients
It's critical to get into the flow of information so that you can spot new opportunities and then sell your services to clients. One of the easiest ways to do that, Dixon says, is to connect with clients and prospects on Microsoft's LinkedIn.
"Many professionals get uneasy about this and wonder whether clients will find it off-putting," he said. "But clients are quite open to connecting in this way."
The reason to do this, Dixon explains, is that once connected you are training the LinkedIn algorithm to show you what the client cares about and talks about — the things they are posting, liking and commenting on.
"It gives you a perfect opportunity to spot ways you could offer value to them," Dixon said. "More importantly, if you don't do this and a competitor does, you can't act surprised when they swoop in and sell your client their work right under your nose."
