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We surround ourselves with too much and superfluous information that complicates decision making and frequently makes it less effective. As a result, we are often incapable of determine what really matters and overwhelmed by the impossible task of focusing on it all. Stop trying to focus on everything! Instead, increase focus on the five areas that really matter.
The 80-20 Rule is a great tool to focus on the most productive activities
Before we review the 5 most important areas of focus, let’s review the 80/20 Rule. 80 % of your sales and profit will come from 20 % of your efforts.
Don’t believe me? Let’s look at what some of the most profitable companies and industries are doing:
- Banks are focusing high wealth customers rather than spread their efforts among less productive clients.
- Retailers are closing small stores and scaling back on inventory to allow them to focus their time and budget on their most profitable products and stores.
- Companies are reducing unproductive practices to improve profits and reduce costs. Costo continues to thrive by offering fewer, more popular products.
As a startup entrepreneur, your primary goal is likely to develop as much positive cash flow as possible within a 12–18-month period. Laser-clear goals require laser focus.
5 Most Important Areas of Focus
Increase Focus on: Change
Change is the only constant in life. While it’s impossible to predict changes, there are ways to train yourself to become singularly focused on finding solutions and making improvements.
Rather than getting overwhelmed by the big picture, focus in on key areas that will jump start your programs. Simplify and reduce uncertainty and stress, understand what really affects your business, and allocate your concentration there.
Change your mindset. Rather than focusing on the hassle of making of changes; frame them as opportunities for increased sales, higher profits, and competitive positioning. This is the kind of flexible thinking that leads to success.
Increase Focus on: Open Systems
Despite the fluctuations, there are several tools for executing solutions and gains. Electric cars, women’s sports, and weight loss drugs are examples of emerging changes that will create massive opportunities
The first order of “open” business is facilitating open communication and collaboration. Empower your staff and management, and trust your employees. This may require reassessing your current workflow and hiring process to ensure you are hiring and training good people, giving them the authority they need to do their jobs well, and understanding that they will make mistakes at times.
Embracing the “status quo” of how things have always been done is the biggest mistake business owners make. Not convinced, take a look at how executing innovative solutions has been a game changer for major corporations.
What did all the success stories have in common? They all embraced the pillars of open systems:
- Open Assets
- Open Engagement
- Open Services
Increase Focus on: Prioritizing
Our problem is not a lack of choices, it’s lack of information about each of those choices. Without all the information, prioritizing is impossible – for business owners and customers alike.
Cheese, beer, bread, and turkey breast are among the most over-assorted products in our lives. Yet, stores spend little time educating customers on varieties, taste, and price of different products. Prioritizing consumer education improves consumer satisfaction, which – in turn – improves consumer retention (and revenue).
Consumer-Facing Prioritization: Prioritize providing what consumers actually want and how they want to get it. Amazon had about 22-24% of all web traffic this holiday season and, yet, we’re still talking about less successful alternatives like retail and Internet outlets rather than educating businesses on how to capitalize on Amazon’s success.
Internal Prioritization: Prioritize what you’re good at and pay less attention to your weaknesses. Much of analytics in sports is based on getting players to focus on the efforts with the greatest probability of success.
Increase Focus on: Managing Risk
We are frequently afraid of risk when dealing with the rapid changes in our society and environment. Relying on old methods and a “we’ve always done it that way” mentality can actually be riskier than adapting and making change.
One of the biggest opportunities in evaluating risk is dealing with innovation and the exceptional. Better data also needs to be accompanied with some risk in searching for the exceptional.
“Risky” Ways to Improve Company Results
- Create an open culture within your organization
- Encourage testing of ideas
- Embrace and cultivate diversity
- Permit (within reason) “deviant” behavior
- Test innovative recruitment strategies
Increase Focus on: Process
Many planning programs put financial objectives at the end of the process. Developing financial parameters at the beginning and then revising as programs develop has many benefits. It particular, it can help you avoid pursuing poor paths and highlight opportunities.
Key Takeaways
Focusing encourages you to prioritize key issues and reduce attention to insignificant ones. We’ve identified key issues and provided suggestions to help prioritize and consider the most significant opportunities. Encourage out-of-the-box thinking and ideas and avoid normal day-to-day problem solving. Encourage testing new ideas and scrapping ones that don’t work. Also, recognize that you will make mistakes and focus on solving them rather than blaming someone.
And, As Always:
- Don’t neglect key elements of success: We sometimes forget that the chain is only as strong as the weakest link. Operations, customer service, and logistics are just as important as traditional functions. They present huge opportunities for a business to become more efficient and differentiate itself (i.e. selling on Amazon or bundling products).
- Always be willing to improve. What are some specific areas you’d like to improve? Focus on those. Try to channel your energy into clear goals rather than on general ideas. And remember that success takes time and consistency. It may not happen overnight, but if you keep putting in the work, you will see progress.
Related: Embracing Rationality: An Opportunity in Decision-Making