A Different Viewpoint On The 80/20 Principle
As every credit union CEO knows, there is a world of difference between efficiency and effectiveness. The 80/20 principle states that 80% of your results are caused by only 20% of the effort invested in obtaining those results. A quick look at some numbers highlights this idea. Consider the following:
* 80% of what you achieve at work comes from 20% of the time you spend working.
* 20% of a company's products usually account for 80% of its sales. And 20% of its employees contribute to 80% of profits.
* 20% of criminals account for 80% of all crimes.
* 20% of motorists cause 80% of all accidents.
* 20% of your carpets get 80% of the wear.
* 80% of traffic jams occur on 20% of the roads.
* 20% of your clothes will be worn 80% of the time.
* 20% of your marketing efforts cause 80% of your results.
Just knowing that only 20% of your marketing really works is a compelling reason to research how each of your members learned of your existence, and what made them join the credit union. It will also motivate you to recognize that all members are not created equal and that 20% of them most likely account for 80% of your profits.
Your job as a credit union marketer? To find out which 20% of your marketing is working, motivating the most members. You might also want to take steps to determine which 20% of your members are producing 80% of your profits, and to learn which 20% of your potential members are most likely to become actual members.
When you discover which 20% of your members are responsible for 80% of your credit union's success, focus on keeping them happy, increase the amount of business you do with them, and seek ways to encourage other members to be more like these members.
Once your mind has absorbed the full implications of the 80/20 rule, consider applying it in other ways: celebrate exceptional productivity rather than raising average efforts. Look for short cuts. Be selective more than exhaustive. Delegate and outsource as much as possible. Target a limited number of goals and focus like a laser beam upon them.
But don't do any of these things in a hurry. Patience will enable you to spot the areas that need changing, and then implement the changes so that humanity remains part of your modus operandi. Fast isn't beautiful. Big isn't beautiful. Small isn't beautiful, either. It's simple that is as rare as it is beautiful.
Laura Enock is CEO of CUVA, an independent company providing free and low-cost marketing solutions to credit unions. Enock can be reached at www.cuva.us.