P2M6 How To Set Priorities

If working to your strengths is one missing secret ignored by many improvement programs, then so is the entire issue of how to set priorities.

There is this big jump between setting goals and taking the actions necessary to achieve the goals.

Some goals are much more important than others

Some actions play a much bigger role in successfully completing a goal than others.

And some actions just have to be done, even though they don’t come from your goals.

Just a few days ago, I did my end of year tax returns. It’s not a goal of mine, just one of those must-do activities that comes with running a business.

I loved this quote from John Assaraf and his book “The Answer” as soon as I heard it.

“There’s a difference between being committed to your success and being interested in your success. If you’re interested, you’ll do whatever’s convenient. If you’re committed, you’ll do whatever it takes.”

That’s powerful and nicely sums up the issue of your real priorities.

Do you want big success or an easy, convenient, comfortable life?

There’s no wrong answer.

Just don’t fool yourself into thinking that you want big success if you won’t do what’s needed.

Why Set Priorities

  • Life is full of options
  • Always more to do than time to do it – especially when you own a business
  • Without priorities people follow the path of least resistance – interruptions, easy stuff
  • Danger of “goal overwhelm” – identify a small number of key goals and take critical actions
  • Do something every day to move you to your main goals

Here’s a thought for you…

“The man who chases two rabbits, catches neither” (Confucius).

What was true in 500Bc remains true now, perhaps even more because there are some many things you could do and so many distractions. Especially for a hungry information junkie like me with the temptations of the Internet.

You always have options on what to do and how to spend your time – many that are useful and many more that waste time.

Even if you’re really strict with yourself and just focus on the good, constructive things, there are usually many more things you could and should be doing than time available to do them.

It’s partly the curse of being your own boss.

An employee can cut off from work outside of 8:00 am to 6:00 pm but a business owner always hears the impatient call of the business to get more done.

If you don’t set priorities based on consciously deciding what’s important and the best thing to do, then you’re leaving yourself open to going down the path of least resistance.

First you let your staff and everyone else interrupt you.

If you haven’t decided that what you’re doing is important, even critical to your business goals then the nice, polite thing to do is to give others your time. Especially when they seem so eager to take it.

You’ll also finding yourself putting the tough stuff to one side to do later – it’s called procrastination – and instead do the easy stuff.

Without setting priorities, you also have the danger of goal overwhelm. There is so much you want to have, to do and to be, you can finish up with a list of twenty or thirty items. You want them all but where do you start?

The answer is to identify a handful of critical goals – sometimes just one or two – and identify those things you must do to achieve these few goals – these are your critical actions.

Then make it a policy to do something on these big goals every day.

You’ll be surprised at how momentum can build up when you are continually taking a small step to your goals.

80/20 Pareto Principle

  • 80% of results come from 20% of efforts
  • Implication 80% of effort produces little result
  • Common problem – know the rule, see it in action but don’t use it
  • Imbalance between effort and reward (reinforces need for measures)
  • Confusion between activity (doing stuff) and productivity (getting results)

I’m sure you’ve heard of the 80/20 rule or the Pareto principle. It’s one of those spooky principles which is proved time after time.

The idea is that 80% of your success comes from 20% of your actions.

By implication that means that 80% of what you do consumes a huge amount of time but doesn’t give you much back.

The 80/20 ratio may change – 85/15 or 75/25 but the principle is the same.

There are the important few and the trivial many.

I’ve played around with the idea of Return on Time.

It’s like Return on Investment – the output you get for the input you give – but linked to time rather than money.

In the 80/20 principle, those top 20% of activities give a Return on Time of 4.

And the 20/80 have an average Return on Time of 0.25 – in reality the range is probably from 1.5 to 0..01 or even negative if some things you do cause more problems than solutions.

There’s a common problem with the 80/20 rule.

People know the rule.

They see it in action.

But they don’t use it to manage their lives.

I want you to be different.

That’s why I keep referring you to the idea of the Stop Start More Less Grid to help you to focus your time on your most productive areas.

Of course, applying the ideas of the 80/20 rule implies that you know what’s working and what’s not working so well. It reinforces the need for measures about what is happening. That way you can measure by facts rather than opinions and gut-feel.

Without measures there is confusion between activity and productivity. Confusion between doing stuff to keep busy and getting results.

Identifying Priorities

  • Three filters for priorities
  • Based on consequences
    • Moving towards gain and profit
    • Moving away from pain and loss
  • Relevant to goals and your vision
  • Discrete activity or stepping stone or option creator

Time to look at how you can start to identify your priorities.

First is to realise that the priority of anything is determined by the consequences of taking or not taking action and not the task itself.

If there are no consequences – no impact of taking action, then you’ve found a worthless activity.

If you have a shop and two customers appear at the same time, one who you know to be a big spender and the other one, also a regular customer but one who buys bits and pieces, which are you go to deal with and which will you let wait or leave to your staff?

You have a goal that every customer receives great service but sometimes you have to choose.

One of the themes you’ll find come up repeatedly in Your Profit Club is the dual motivations we all have:

  • To move away from pain and problems
  • To move towards gain and solutions

While we each have our biases and it depends on how bad the situation and good the opportunity, most people have stronger motivation to move away from pain than towards gain.

Even though it’s the same money, most people would prefer to save $100 than to make $100. People will therefore spend many hours searching for the best bargains rather than looking for ways to earn extra money.

It shouldn’t need to be said but priorities move you towards your goals and vision. You have to do what you have to do.

One other item covers priorities and it’s not so obvious.

Some activities create the end result, some activities are stepping stones and some activities create future options.

As an example let’s think about your website.

You may have a website designed to sell from the page. No subtle courtship of customers for you, a straight pitch for their money. Your website is directly linked to the end result.

In contrast, you may have a website that is designed to capture leads from potential customers. You give some away for free in exchange for their details:

  • an email address so you can send them a series of messages designed to turn someone into a buyer
  • a telephone number so you can sell on the telephone or arrange an appointment.

The website is a stepping stone. It may capture leads but if you don’t take the next step with a follow up email, telephone or visit, there are no consequences. But getting that website set up and attracting traffic is the first step to getting the later benefits.

Or you may have a website but you’re not sure how you’re going to use it. The website has given you the option to sell or  to capture leads.

Some activities close doors which you may want to leave open.

In the UK the exams I did as an eighteen year old before university are called A Levels. You study the subject for two years so you have to make what is potentially a career defining choose at 16.

It used to be the case that if you wanted to be a doctor, a dentist or engineer, you had to study chemistry and physics but to be an accountant or lawyer, it didn’t matter what subjects you took, just that you got good grades.

If you didn’t know what you wanted to do, the safe option was maths, chemistry and physics. Those willing to shut doors could take history, economics and geography.

It’s similar now you are in business.

If you learn more about marketing, you have the option of doing it yourself or delegating it successfully to another because you know the difference between the good and the bad.

When you are looking at a stepping stone or option creator, you can’t consider the priority of the activity on its own. It would never get done so you need to look along the steps to the end result. Try to prioritise the sequence of steps so you don’t get stuck with lots of projects you’ve started and not finished.

How to Set Priorities

  1. Identify list of options/things to do
  2. Identify dependencies
  3. Rate
    1. Potential result
    2. Probability of success – expected values
    3. Use of any constraint
      1. Time and effort required
      2. Cost
      3. Other

Time to put the theory into action.

Take your list of goals or activities and first identify the dependencies so you can see linked tasks together.

Now start grading the actions based on the potential result and the probability of success. You can combine both to create an expected value.

Suppose you are having to choose between following through on three quotes. You’ve found in the past that trying to split your focus doesn’t work so you know it’s better to pick one and follow through rigorously than to try all three, burn yourself into a frazzle and frustrate each because you can’t get back with answers fast enough.

Quote A $12,000

Quote B $25,000

Quote C $6,000

Quote B is looking good at this stage when you only look at values but what if we consider the probability of success.

Quote A you estimate the probability of success at 50% because it is from a past customer who you have a great relationship with. It gives an expected value of $6,000  (12,000 * 0.5).

Quote B could net $25,000 but you think you’ve only got a 20% chance of success because it’s a business you haven’t had any dealings with in the past. This has an expected value of $5000 (25,000 * 0.2)

Quote C is from a  customer who always buys from you and could net you $6,000 and has a 95% chance of happening (there’s a small chance it may not go ahead) – expected value $5,700 (6000 * 0.95)

On straight arithmetic, Quote A looks to have it with the highest expected value of $6,000 although you’ll actually get $12,000 or nothing. Quote C is much less risky, virtually guaranteeing that you get something for your efforts while Quote B has the biggest gain and the biggest probability that you’ll end up with nothing.

A difficult choice and the decision will depend on your situation and your view of risk.

But you may not be seeing the full consequences.

We’ve focused on gains so far but what about what you have to do to play the game.

Suppose there was a cost involved which you could recoup. If you’re short of cash, then money becomes a constraint and it could stop you from considering one of the options.

Or what about your time.

Suppose Quote A would take 30 hours, Quote B 50 hours and Quote C 19 hours.

We can divide the hours needed into the expected value to give you a potential return on time

A  = 6000/30 = 200

B = 5000/50 = 100

C = 5,700/19 = 300

The best decision doesn’t looks so close now we are using the Return on Time concept does it.

C jumps out as the obvious priority.

Does it make sense?

That depends on whether the 11 hours you save by choosing C makes up for the $300 you expect to miss.

The financial values and hours worked well for me to make the point and show you how priorities can change depending on how you look at them. It can be difficult to make a detailed assessment.

In those cases use High, Medium and Low for the impact and probability or rate each from 1 to 3 (or 1 to 10 if you want more grades).

The idea is to help you to find the best actions so they become your priorities.

Eat That Frog

An alarming thought for how to deal with what needs to be done I picked up from Brian Tracy.

If you’ve got to eat a frog, don’t keep looking at it, just open your mouth and do it, otherwise you will find any excuse to put it off.

Fortunately you’re not going to have to literally eat a frog.

it’s a metaphor for the nasty, unpleasant, scary and difficult jobs that nag away and distract concentration, reduce productivity and lower motivation.

Instead of worrying about it, just do it.

You’ll feel much better when it’s out of the way and you can concentrate on positive things.

While I’m on a nature theme, how do you eat an elephant?

One bite at a time!

If you’ve been putting off a big job, breaking it down into smaller, discrete tasks will make it much more manageable.

yes we are at the stage where I talk about the enemy of achievement and success…

Procrastination

  • Putting off what needs to be done
  • Happens when “not doing it” is easier and less painful than “doing it”
  • Laziness, lack of energy, comfort zone
  • To change behaviour, you need to change beliefs about consequences.
  • See it more clearly
  • More, longer lasting pain
  • Delayed and reduced benefits

Procrastination means putting off today what needs to be done.

“I’ll do it tomorrow” you think to yourself.

Then tomorrow comes and you think “I’m not in the mood. I don’t think I should do it today.”

I like this quote from Napoleon Hill

“Procrastination is the bad habit of putting of until the day after tomorrow what should have been done the day before yesterday.”

It happens because the consequences of not doing it are seen as less painful than doing it.

The pain of doing something – time, energy and effort – are all too obvious but the benefits of doing something are often vague and uncertain.

This makes people lazy and especially if they are feeling down and lack energy or if the task is difficult and outside their normal comfort zone.

The only way to change behaviour is to change the belief on the consequences and see what’s likely to happen much more clearly.

If you’re putting off taking action to solve a pain, then you need to see clearly the pain lasting longer and getting worse.

I’m overweight and given a choice of eating or exercise, then eating wins. I am exercising because I know my weight is not good for my back and it will get worse as I pile on the pounds.

If you’re putting off action to seize a benefit, then you need to see that those benefits are being delayed by your inaction and you have less time to collect the benefits.

Suppose you have a couple of small kids and you have a goal to spend more time with them and less time working in your business. The more you delay systemising your business and delegating work, you lose memories of your children’s childhood that you can never get back. Your son might only win one race at the school sports day ever, your daughter might only be the main singer or dancer in a show once – you miss it and it’s gone forever.

Get clear on the consequences and start prioritising.

Putting Priorities Into Action

A quick recap

  • Rate your goals – High, Medium, Low – 1 to 3
  • Pick a small number to concentrate on
  • Assess action plans – focus on the necessary and sufficient – it may not suit any desire you have to be a perfectionist but do enough to complete the job and no more
  • Think of your goals monthly, weekly and then daily. That way you have a context for what you are doing today and tomorrow.
  • Make wise choices – you live with the consequences so take responsibility
  • Decide to live purposefully – don’t let yourself be a victim
  • Be proactive not reactive

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