Self-Leadership and the 80/20 Principle

In 2017, I started tracking the books that I read on an excel spreadsheet. Yes, my inner finance geek is showing. There is something so orderly and calming about having things documented in an excel spreadsheet.

I periodically review my spreadsheet to remind myself of the books I have read and the lessons I have learned. As I review the books, I have decided to write a brief review for each book, and include the leadership lessons learned.

The first book that is a must read for anyone who is serious about upping their leadership game is "The 80/20 Principle" by Richard Koch. I mention this book in nearly every speech or training session I give. It is that important. It is one of the books that I have determined to re-read every year. Why is this book so important? Let's dive in.

Koch begins by explaining the 80/20 principle. It is a concept first identified by Vilfredo Pareto in the late 1800s. While studying wealth distribution in Europe, Pareto noticed that wealth is predictably unbalanced. Regardless of country, wartime or peacetime, about 20% of the population owned 80% of the wealth. His findings were referred to as Pareto's Law. This finding was largely ignored for half a century.

His findings had a resurgence in the mid-1900s when the 80/20 relationship was noticed among social relationships, criminal activity and quality control, to name a few. Joseph Moses Juran, the man behind the Quality Revolution of 1950-90, addressed this in his book "The Quality Control Handbook". Among other things, he noticed that roughly 20% of the inputs were responsible for 80% of the product defects. He rightfully noted that if companies spent their time monitoring the 20% of the inputs (versus equal time spent monitoring all inputs), they could solve 80% of the defects while drastically saving time.

Now, how does this apply to leadership? In every way possible. Koch identifies how the 80/20 rule shows up in business strategy, products, customers, negotiations, and even business consulting. There are many golden nuggets to extract from there. I have a brief summary available HERE.

My favorite portion of the book describes how the 80/20 principle applies to our time, relationships, money, happiness, and productivity.

The catch? You need to train yourself to think and act in 80/20 terms. Part of that means that you need to give up the guilt associated with acting in such a strategic manner.

For example, per the 80/20 rule, about 20% of our activities contribute to 80% of our happiness. That means that 80% of our activities are for the benefit of others. Other people control 80% of your schedule. Are you willing to look at your schedule and say "no" to others? Are you truly willing to take control of your day?

Now, you might say that it's not that easy. We have duties and responsibilities, after all. That is true; AND, it is also true that we do have control over it, nonetheless.

We have the responsibility to meet our basic survival needs. In order to do that, you might need to work a job that you dislike. It might seem that it is something you "have" to do and that you have no control over it. However, applying the principles of self-leadership, you do have control over how you perceive and perform on the job. Do you view this as something you have to do, or do you view it as a strategic tool for your long-term goals? Do you take ownership of your performance and achievement right now, exactly where you are? The 80/20 rule shows that high achievers either work for themselves or act as if they do. If you change the way you perceive the situation, you will change your actions, which will then change the situation itself.

If you choose to be a victim – to take on the mentality that this is something you have to do, and you have no choice in – then you are giving up your power to effect change. Not only that, you are then choosing to be miserable for the time that you are working in that job. That negative attitude overflows into your non-work activities as well, making your entire life less productive and less enjoyable.

Now, on to the other duties and responsibilities: the activities in our schedules that we feel we are obligated to our family, friends or society to do. This could be going to a happy hour networking event, a friend’s party, or a family member’s soccer game. In most cases, you don’t actually “need” to go. You are going because you want to avoid the possible confrontation or the discomfort of saying no. When it comes down to it, you’re not obligated to go to those events, you are too afraid to say no.

I didn’t say this book would make you feel better about yourself. It is about being brutally honest with yourself, identifying your goals, and strategically choosing your actions.

This book is a very practical manual on how to be a super effective self-leader.

That’s not to say that empathy, love, and relationships are thrown out the window. On the contrary, you can use these tools to invest more time with the relationships that matter the most to you.

Some relationships, such as family and true friends, are treasures that we would like to invest in for the long run. The ROI of these relationships is the feeling of community, the love we get and give, and the memories we build. The 80/20 approach helps you identify these relationships so that you can re-allocate your time to be primarily focused on them. You probably spend only 20% of your time currently on these relationships, and they drive 80% of your relationship satisfaction. If you shift your time allocation to spend only 40% of your time on these relationships, your relationship satisfaction could double to 160%!

The same goes with identifying strategic long-term relationships. If you identify them and then set aside another 40% of your time for these relationships, you have doubled your strategic relationship building.

That still leaves 20% of your time for the other relationships.

The concept of how you allocate your time across your relationships is just a paragraph in the chapter on time. That is why this book is an absolute must read.

The bottom line: know your goals, identify the main inputs, and double down on those. Be willing to be strategic, different and disciplined. If you apply the 80/20 principle, you can achieve more (success, happiness, wealth, etc…) with less (time, resources and other inputs).

The question is, are you willing to be a self leader?

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