Occam’s Razor is a problem-solving principle that says, "simpler theories are preferable to more complex ones because they are more testable.”
Occam's razor is based on the notion that simplicity equals perfection. It is a guide or a suggestion—that states that when given two explanations for the same thing, the simpler one is usually the correct one.
Then you have Benford’s law, which states in many naturally occurring numbers, the leading significant digit is likely to be small.
Next is the 10/90 Gap that states that only 10% of worldwide medical resources are spent in countries that have 90% of all preventable deaths worldwide. African startups that target this gap could be quite successful in the coming years.
Next is the 1% Rule, which states that in Internet culture, only 1% of the users of a website actively create new content, while the other 99% of the participants only lurk.
Finally, you have Pareto’s Principle (also known as the 80/20 Rule or the Law of the Few). This principle states that, for many events, roughly 80% of the effects come from 20% of the causes.
In other words, 80% of your revenue comes from 20% of your customers. The original observation was made in Italy’s land ownership. Pareto noticed that 80% of Italy’s land was owned by 20% of the population.
A Few Examples
It’s well known by Project Managers that 20 percent of work (usually the first 10 percent and the last 10 percent) consume 80 percent of the time and resources. You can apply the 80/20 Rule to almost anything from the science of management to the sciences of the physical world around us.
- On average, 20% of your inventory on hand occupies 80% of your warehouse space. Similarly, 80 percent of your inventory line items (Stock Keeping Units or SKUs) come from 20 percent of your vendors.
- 80% of your revenues will be made by 20% of your sales staff.
- And 20% of your workers will cause 80% of your problems, while another 20 percent of your personnel will deliver 80% of your entire production. The formula appears to work in both directions.
- Or 80% of your problems come from 20% of your employees.
What’s the point?
Stay Focused. And focus on what you must do, not what you can do.
A real life case study can be seen in the worldwide juggernaut McDonald’s. 87% of McDonald’s revenues were hamburgers, fries, and drinks. That’s it.
They were an overnight sensation 30 years in the making. Why? Because they focused on what was producing the results.
Too often in the startup world, we try to build too many things too quickly. When you really should be focused on solving the 20% of problems that will give you 80% of results.
In Africa, this number may be exponential. Because to solve any problem, it takes solving half a dozen smaller ones along the way.
There are a lot of focus principles out there. None of them matter unless you actually focus and apply them.
Some workplace productivity questions to ask yourself and your team today:
- How often do you check your communication platform (email, WhatsApp, messaging)? Are you so focused on hitting the dopamine responders that you don’t actually get anything done? Everyone’s communication, but accomplishing nothing.
- What are the 20% of things that produce more results in your day to day work? If you don’t know, discuss which problems you are given the freedom to drop versus which ones you must focus on. Do those priorities need to shift?
- Where does the bulk of your revenue come from? Can you focus on that 20% output?
- Where do the bulk of your problems come from? Can you fire that person/employee/client/customer? Or can you focus as a team and solve that problem?
(photo via gopal vijayaraghavan)
Posted on June 15, 2017
by Tim & Tommy filed under