Apply the 80/20 Rule to CFO Time Management

I always enjoy the time around New Years. Since my wife and I work for manufacturing firms, we have normally had the entire week between Christmas and New Year’s off for factory shutdowns. This downtime gives us the chance to spend some time together, plan our goals for the upcoming year, and determine what is really wasting our time.

The Pareto Principle — so popular in the world of revenue generation — has become a standard part of our “family knowledge base,” as well. The principle, commonly described as the 80/20 rule, describes the phenomenon of 80% of activity or results coming from only 20% of activity. Businesses often see 20% of their customers generating 80% of their revenues. The same principle often holds true in time management.

I attended a goal-setting tele-seminar last month that really drove this point home for me. I have always been aware of my goals and tried to set lofty yet achievable goals, but I often assigned the same weight to my goals. The seminar helped me realize the 80/20 rule applied to my own life as well as to businesses and customers. I have shifted my time management to ensure I understand the 20% of activities that will bring the greatest success for me in the coming year.

How can you use the 80/20 rule to better manage your own time in 2012? Try these simple activities to start.

• Eliminate reports you typically send. How many reports do you send because “we’ve always sent that report”? Will anyone really miss that report? The only way is to stop sending it and see what happens.
• Work on your highest-priority items first, and allow your staffs the same freedom. Earlier this week, I had four different requests come to my desk marked as “urgent”. Fortunately, my manager supported me to complete the highest priority item and ignore the other items until they were completed.
• Use back burner lists. I tend to generate many ideas, and I unfortunately act on too many of them and begin to burn out. I now keep several lists of ideas by topic and check these once or twice a month to see which items I turn into projects and which ones I remove. I started using this technique late last year, and it has helped me focus on the truly important items tremendously.

We are all extremely busy and sometimes forget what is really important in our professional lives. If you remember the Pareto Principle, you have a better chance of focusing on what really matters.