Mark Richardson's Think Business: The 80/20 Rule

Article Image: 

Everyone in business has heard of the 80/20 rule. This rule applies to how a relatively small percentage of people can enjoy the lion’s share of the results. In this business environment, it also applies to those who achieve positive results and others who are not and may be struggling.  Most find this rule more interesting than impactful in their planning and thinking.

The last several years have been very challenging for most businesses. The phone has stopped ringing. Clients are taking a long time to decide to proceed with remodeling projects. And many team members are feeling the pinch in their pocket book. While this basic environment is the same for most, the results for some companies and leaders are really quite different. As I travel around the country speaking to thousands of business leaders, I have found that around 20 percent are not only seeing good results but in many case having positive record years. The following are a few common denominators of the 20 percent making it happen versus the 80 percent that are just hanging on:

1) “When is it going to get better?” This is one question that I am never asked by the 20 percent making it happen. They have accepted this environment. They like the challenges that this new world order brings. They have found ways to not only survive but also thrive. Like someone who enjoys sailing, they like windy conditions and the challenges that come with navigating stormy waters.

2) They have not lost their mojo. People talk about “getting your mojo back.” (In fact, it is the subject of a talk I give.) The 20 percent have not lost it. They understand that now more than ever, leaders need their mojo. They need the positive attitude that creates the enthusiasm that becomes contagious in their business. This mojo is the magic that sells. This mojo is what gives them and their team the conviction to succeed. Have you lost your mojo?

3) The business has changed. The 20 percent seeing success have adopted change as an integral element of their thinking and business strategy/culture. The product that they are selling today is not the same. The process and how they sell is not the same. The speed at which they react is much faster (or slower when it needs to be). When weather conditions change, your approach to what you wear or how you drive needs to change. The 20 percent understand change and embrace it enthusiastically.

4) Team sport. We all know the concept of team is important in business.  However, the 20 percent have embraced team at a different level. They think synergistically. They have deputized all team members to help generate leads and opportunities. They have adopted team selling techniques knowing that they can differentiate themselves by having two people show up on an appointment when there is a scarcity of opportunities. They understand that today the heavy lifting needs to be shared by all to be successful.

5) Training is an investment not an expense. I did an informal study of about 20 businesses recently. Approximately 20 percent had increased the amount of time per week spent in team training and about 80 percent had decreased the hours per week in training (to reduce the expense). The 20 percent that had increased the investment had seen substantial growth in sales and the other 80 percent had seen top line revenues slip. While there are many factors that go into growth, this was hugely telling. With a tougher environment, a business has to invest more, not less, into training. Where does your business fall in this equation?

In closing, while the 80/20 rule can be a way to divide us into groups, it is also a way to communicate. It is a way to recognize that there are those out there today dealing with the same environment and making it happen, and those that are not. It is important to see that your success may be more a product of what you are doing, and not just the cards you are dealt. Then you might not only see better results, but also better enjoy the journey. PR

--

Mark Richardson, CR, is co-chairman of Case Design Remodeling and the Case Institute of Remodeling. He is a member of the NAHB Remodeling Hall of Fame and a Fellow at Harvard University’s Joint Center for Housing Studies. Richardson is the author of the best-selling book, “How Fit is Your Business,” and a forthcoming book, “Business Themes to Live By,” to be published this year.