Pareto’s Law states that a minority of causes, inputs, or efforts usually lead to a majority of the results, outputs, or rewards. Parkinson’s Law states that a task will swell up in perceived importance and complexity in relation to the time allotted for its completion. The Laws are inverses of each other and when applied together, can drastically make you more productive. This is a good time to give thanks to my friend Tim Ferris, author of The 4-Hour Workweek. I don’t actually know Tim, but I feel a bromance forming between us. I have read his book, The 4-Hour Workweek seven times and no other book about business has influenced me as much as it did. This book is where I first learned about the effectiveness and the efficiency of Pareto’s Law and Parkinson’s Law.
Vilfredo Pareto was a controversial economist who lived from 1848 to 1943. He was an engineer by training and started his career managing coal mines. He later took a position at the University of Lausanne in Switzerland and explored the income distribution of 19th century England. He found that 80% of the wealth in England was controlled by 20% of the population. When Pareto started to explore this phenomenon more, he noticed that this pattern of imbalance was repeated consistently whenever he looked at data at different time periods and within different countries.
The critical thing is not to look at the specific 80/20 relationship, but to focus on the main concept. There is an inherent level of imbalance between inputs and outputs. I experienced this phenomenon many times throughout my time as the creator and owner of Great Black Speakers Bureau (GBS), a company dedicated to spreading African-American thought to the masses. I remember the early days of January 2007 when I was working to elevate the company from its humble beginnings. I would put in 10 to 12 hour days, six days per week, personally building the website, making sales calls, emailing potential clients, getting contracts signed, mailing thank you cards, and everything else required from an entrepreneur. The company was growing at an accelerated rate and, in turn, I was exhausted at the end of each day.
Then it happened. The Lord blessed me with a scholarship to earn a Master of Business Administration (MBA) at Cornell University. My life changed forever. After a couple of weeks of pure elation, reality started to settle for me. I began to realize I would not be able to effectively run my company and pursue an MBA at the same time. By this time, GBS had multiplied by 900% since the company began the prior year. The problem was not the growth itself, but instead the problem was that much of this growth was directly related to my personal inputs. How on earth was GBS going to grow, or even be maintained, if I was not there to run it? (Although I had no real answer to this question, I wrote a wonderful and politically correct answer to this question for my business school applications. Unfortunately, it was a question for which I was still pressed to find a feasible resolution.)
I now had to do some real soul searching and heavy prioritizing. TOver the course of two days, I turned off all communication with the world and I spent hours analyzing every facet of GBS with a single question in mind that I learned from Mr. Ferris: What inputs in GBS generated the majority of the outputs? After the analysis, I wasn’t very happy with myself because I noticed major ineffectiveness in my process. At that moment, I made a vital decision to revive my company. I would go through a business liposuction process in order to cut off the fat that in the long run, if not checked, would cause GBS a slow but inevitable death.
My first priority was to start a search for a new executive director for GBS. I was looking for a highly organized person who was excellent at selling. I found both of these traits and more in my childhood friend, Diana, whom I have known for many years since my days in Louisville, Kentucky. In fact, Diana is an improvement over me in both of these areas. Secondly, I assessed the mundane, but essential tasks that consumed most of my time. Some of these tasks included making cold calls, working on the website, writing thank you letters, filling out contracts. One by one, I started outsourcing these tasks to other companies that specialize in one or more of these areas. It was actually much less expensive than I originally thought it to be.
The results had been outstanding since I started this process. I have increased my personal income by 250%, while decreasing my GBS workload from 55 to 70 hours per week to eight to tenhours per week. Furthermore, most of my gains were made after I started business school. From this situation, I learned a couple of lessons. First, you don’t have to work like crazy to generate sufficient income for yourself; and secondly, if you surround yourself with the right people and implement the right processes, you can accomplish a lot with very little.
