Using Pareto for Growth

In a previous post, we emphasized the importance of the Pareto principle or the 80-20 rule that is widely used in management and known in Optometry. We also listed many places the Pareto principle is employed including in practice and business growth. 80% of the growth comes from 20% of practice activities. How do we apply this on a day-to-day basis?

The way and the speed a practice grows relates directly to its ability to increase productivity and use working time well beyond what other practices are doing. Productive work requires high amounts of focus, energy, discipline, consistency, and willpower to accomplish and achieve goals. The way we think about our work defines how well we will do. Many practitioners work the same amount of time but think differently about their practice therefore the productivity of their practice completely differs.

To achieve maximum practice growth through the most appropriate perspective we have of our practice we can use the Pareto principle. Plan for the coming five years, write down a list of the tasks that you and your practice staff can perform best, know that you’ll never have to perform all tasks if you want to grow, prioritize your list by order of growing profitability (not the time spent on each activity), and subdivide the list into groups of tasks that you want to perform first, second, third, etc… Apply the Pareto rule to your list and keep in mind that the first 20% of activities are responsible for 80% of your growth and profit.

Once you have identified the 20% activities responsible for the 80% of your growth and profit, you copy them on another list that you place on your desktop that you open and review the first thing in the morning. Before you start you meet with staff at the beginning of the workday you go through this list and apply the ABCDE method. The ABCDE method consists of putting a letter next to each activity by level of results or consequences of completing or not completing this task.

You put an “A” next to the activity that is of high importance to the consequences it makes and so it must be accomplished. An “A” activity has serious consequences for being completed or not completed. “A” activities cannot be delayed and they should be handled the soonest possible. A “B” activity has mild and moderate consequences and should be performed. A “B” activity can be performed soon as it can also be delayed. A “C” task has no consequences but it would be nice to perform it. A “C” task like spending time with colleagues chatting or talking over coffee. A “D” task is something that is better done if you delegate it or outsource it to someone else. An “E” task is a task that you can eliminate.

With time, as you identify the most common ABCDE activities you become more oriented to performing activities that have a direct impact on your growth and profitability.