Tag Archives: Change

Laws and Principles Entrepreneurs Live By

Pareto Principle  | Parkinson’s Law  | Law of Averages  |  Law of Association

4 Laws & Principles every Entrepreneur should know and live by:

The Pareto Principle

The Pareto principle is a very popular law …my guess is that you’ve probably come across it or have even heard of it numerous times throughout your life… however it was most likely referred to with a different name.  If you’ve ever heard of the 80-20 rule, or the law of the vital few, or even the principle of factor sparsity….then you’ve been exposed to the Pareto Principle.

Essentially this law states that, for many events, roughly 80% of the effects come from 20% of the causes.  And naturally this applies to a great many things and events especially concerning to the entrepreneur.  For starters….  as an entrepreneur….you’ve probably wondered why the distribution of wealth is the way it is….observing that just about 20% of the population has much of the wealth, while the other 80% doesn’t.  Who knows, maybe this keen observation on your part is the exact reason you are an entrepreneur…. so you can in fact make your way to the top 20% :).

This principle is also very relevant for the entrepreneur for purposes of time management…..20% of the things you do will account for 80% of your results while 80% of the things you do will account for 20% of your results.  I know…a bit depressing when you think about it….but this knowledge can be useful for creating and perfecting your plans of action.  In addition, the principle will come into play when trying to understand why some customers buy your goods and services, and why some….let me rephrase that…many, don’t.

So when 80% of the people you approach with your products, services, or opportunities say no….just keep in mind that it’s not you….and most likely not what you’re offering, and that it’s just a bit of the Pareto Principle at play.

Parkinson’s Law

Parkinson’s Law is something all entrepreneurs should be aware of.  Like the last law… you’ve probably experienced this one in the past but just haven’t been introduced to it formally.  So…I’ll do the honors.  Parkinson’s law was first articulated  in an essay of The Economist in 1955 and has been made more or less mainstream by author/blogger/entrepreneur Tim Ferriss.

The law essentially postulates that…  work expands so as to fill the time available for its completion.  So if you have ever had some friends or co-workers who were given an easy task to do with a somewhat large amount of time to complete….and yet they  somehow managed to stay extremely busy, spending an inordinate amount of time on a task that you could have finished in a day….. well then, you’ve been acquainted to Parkinson’s Law.

This is essential knowledge for an entrepreneur….especially those new to being their own boss and in charge of running their businesses efficiently.  The understanding of this law will help the new entrepreneur combat the programming received while they were an employee who wasn’t 100% vested in how long tasks actually took to complete.  Ultimately, if one truly cherishes their time and leisure, and doesn’t want to be a slave to their business….knowing this law is critical.

Law of Averages

This is a great law for us.  It’s the idea that probability will influence all occurrences in the long run, that one will neither win nor lose all of the time.  For example, If it rains every day this week, by the law of averages we’re bound to get a sunny day soon. This colloquial term is a popular interpretation of a statistical principle called Bernoulli’s theorem.  As an entrepreneur or professional, this law becomes important to you when  you decide to start going after the deals, the partnerships, and the sales.

The more you experience the no’s and failures in the pursuit of your ventures….the more likely you are over time, to experience that crucial yes and ultimate success.  A fantastic example I like to refer to, is the baseball player….  he strikes out 7 out of 10 times….and still get’s paid 5 million dollars per year.  The same success awaits the entrepreneur who  understands that with every no…they inch that much closer to their YES…and indeed their SUCCESS!

Law of Association

This law is often looked over for striving entrepreneurs but is crucial in moving towards the achievements you set for yourself.  Basically this is a law which suggests that we become like the average of the five people whom we spend most of our time with.

Meaning….that everything about you will average out to be similar to those five people whom you are currently spending most of your time with.  For instance,  your income will tend to be the average of your five best friends’ incomes.  If you want to raise the quality of your life, hang out with people who have already been there and done that…and who are living the quality life which you seek. If you want to become a better communicator, hang out with great communicators.  If you want to be more positive, hang around with more positive and up beat people. If you want to be a terrific parent, spend lots of time with men and women who have mastered the art of parenting.  If you want to start making at difference….get around those who are out there making some waves of impact.  So in essence… birds of a feather flock together.

But…do you know why birds of a feather flock together? It’s because they’re all going in the same direction. They share a common vision. So if you’re going after a goal, any goal, go and find the people who have already achieved that goal, or who are well along the path to attaining that goal, and then be with them, hang out with them, camp on their doorstep if you have to. :).  Joking aside…this is an important law to live by….so get out there and make some connections with those whose lives you want to be living.

And if you find your self in a situation where making critical associations with people is difficult because of your location, or because you just need some time to gain the courage to reach out, remember that the next best thing to associating with great company is reading great books.  It was Rene Descartes after all who once said “The reading off all good books is like conversation with the finest men of the past centuries”.

To Your Success!

“Our acts can be no wiser than our thoughts…our thinking can be no wiser than our understanding.” – George S. Clason

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Mastering Mountains

This post serves to compliment my last two posts…and well many of the other posts that have been weaved throughout this blog that have been a type of  nudge from me to you  to grow…to change.  I think it’s appropriate for me to post this now because, let’s face it…I ask a lot of you.  I know I throw a lot of ideas and challenges out there to you that aren’t necessarily your everyday habits, and so I definitely understand that they are not easy to consider, let alone do.

So think of this post as your hiking gear to go along with all the “mountains” I’ve pointed out to you.  What I’ll stress first is this idea of not shrugging off ideas, activities, or goals that seem too hard to initiate, or from retreating from your challenge, your “mountain”, all because it looks too high or seems too difficult.  For instance, a couple of posts ago…I suggested being positive all the time as a way to live better, be happier, and to live a healthier life.  Of course I know it would be tough to automatically be “that” supercharged positive person starting tomorrow.  So if you decide to do it…will you be that person tomorrow?  No, but you’ll be closer.  Should you still try?  Yes!  Another example I suggested was journaling everyday, morning and night as a good practice to learn more, learn quicker, and to grow and become more at an exponential rate.  Do I think you will be writing five pages and have a completely revolutionized life by tomorrow?   No, not necessarily.  Do I think it’s a great idea and that you should strive for it?  Absolutely…no doubt!

I guess there are two things to really keep in mind when considering not just my recommendations, but anyone’s, or in starting anything new for that matter.  The first thing is….to start, and the second is…. to take small steps.

If you actually give your toughest challenges a try and pay attention…you will see, oddly, that there really is some type of magical power behind just starting.  What happens is….a momentum is created and shortly thereafter with enough persistence… the positive results begin to show up.  It’s Crazy!  Perhaps this is what Johan Wolfgang Von Goethe meant when he said:  “Whatever you can do or dream you can, begin it…boldness has genius power and magic in it”.

And then of course, there is the second thought to keep in mind when you are about to make some changes….and that is….take small steps, even baby steps if you have to.  The idea is to just start moving in a determined fashion towards your end point.  It always seems to work for the tortoise; it’s been working for the people who have achieved greatly…why couldn’t it work for you?  I’ll bet this is exactly what Confucius had in mind when he made his famous quote:  “A journey of a thousand miles begins with a single step.” 

So..as much as I like to challenge you I am sure life likes to do it a whole lot more.  If you remember these two points I’ll bet your chances of surmounting those challenges, of mastering your mountains…. will go way up!  Give it a try…..Good luck!

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What Are You So Afraid Of?!!

A Bundle of Powerful Maxims from Osho, Author of Courage:  The Joy of Living Dangerously.

 

I love Osho.  I read his book a couple of months ago and saw immense amounts of wisdom contained within it that certainly had potential to help me in my personal and business ventures.  Being the nice guy that I am, I will share some of the love just in case you can’t make it out to your local library or purchase it.  So, here are a few of his ideas to ponder on as you think about your life and why it is where it is in relation to the notion of fear.  Hopefully one of these maxims will serve you in going more confidently in a direction which you feel uncertain about, or through issues which have caused  you discomfort and insecurity in your personal life or business life.  Enjoy!!

“Why are you afraid?  What can the world do to you?  People can laugh at you; it will do them good – laughter is always a medicine, …healthful”

 

“Commit as many mistakes as possible, remembering only one thing: don’t commit the same mistake again, and you will be growing”

 

“But in the beginning there is not much difference between the coward and the courageous person.  The only difference is that the coward listens to his fears and follows them, and the courageous person puts them aside and goes ahead”

 

“Trust is the greatest intelligence, Why don’t people trust?  Because they don’t trust their intelligence.  They are afraid, they are afraid they may be cheated.”

 

“The man of understanding dies every moment to the past and is reborn again to the future.  His present is always a transformation, a rebirth, a resurrection”

 

“A man really becomes a man when he accepts total responsibility – he is responsible for whatsoever he is.  This is the first courage, the greatest courage.”

 

“The more alive the person, the more problems there are – But there is nothing wrong in it because struggling with problems fighting with the challenges, is how you grow”

 

“Don’t call it uncertainty – call it wonder.  Don’t call it insecurity – call it freedom.”

So…. What are you so afraid of?

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Entrepreneurs Beware – Failure is Subtle

Failure is a sneaky thing.  It usually shows up in our lives when least expected and interestingly it is usually determined from the choices or acts we made long before the moment it is realized.

For instance.  Consequences have a very canny way of not seeming to be a big deal at the moment, even after a couple of days or months.  We can eat  our twinkie or drink our daily beer and think to ourselves “hey, it’s been a month and  I am still looking good, who said this stuff wasn’t good for you”  and so proceed to make the same choices.  And for a couple of months you are probably right, no big changes..no big deal.    And you still look good, well…somewhat, and you haven’t had a heart attack yet.  All is well right?   But..no, it’s down the road where that unwanted failure figure is lurking.  It will show up…and in this case it eventually does as a nice double chin, or that cute spare tire you’ve developed, or in extreme but still very possible cases…..death.

Another example of how failure is subtle can be seen by the employee who happens to take an innocent 10 extra minutes at lunch for personal time.  Thinking to him/herself that it will all be okay since it’s “only” 10 minutes and that their boss will never notice.  But what happens is a year goes by, and those 10 minutes (assuming the avg.  50 week work year) turn into a whopping 2,500 minutes of slack time.  In other words, you just took 41.6 hours of illegitimate paid time off.   Which may be good for you depending upon who you are or what you want.  But the failure comes in the lost opportunity, the lost options.  Now that you just took a whole week off, your competitive coworkers who might not have been as much of an opportunist as you  are now being considered for the promotion you wanted and it’s probably mostly because they are at least one whole week ahead of you!

The same could be said for the entrepreneur.  In this instance you could be a whole week behind in the preparation of an important presentation which was to get you the start up capital that you needed to move your business idea forward.  So, instead of practicing a few simple disciplines a day, and deciding not to sweep away those few “innocent” pleasures,  you lose out to the more prepared entrepreneur who actually does the sweeping that matters and sweeps the investors of their feet.

You see failure is a subtle and scary creature if you are not careful.  No need to fret however…. I am pretty sure that if you practice a few simple disciplines everyday you can still turn everything around.

Stay vigilant my friends.

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Are You A Change Agent?

Are you interested in trying to identify and solve social problems on a large scale?   Are you  innovative and relish the thrill of opportunity seeking?  Does making changes and improvements to systems or society interest you?  If so you may be a social entrepreneur.

Do you primarily seek to generate “social value” rather than profits for your business?  Is your work targeted not only towards immediate, small-scale effects, but sweeping, long-term changes in the world?  Are you an idealist?  If so you may be a social entrepreneur.

Now reverse these questions and replace social value with economic value and social problems with economic potential and you have yourself a true blue entrepreneur. 

Now I have a tough time with this rigid dicotomy of the entrepreneurial types, and often wonder why there isn’t a definition for the two combined.  It does seem reasonable that the two could combine.  So, I ask myself the question.  “What would you call an entrepreneur who has the goals of a capitalist but a heart of a saint?”

My answer?  A Change Agent…yeah a Change Agent, it sounds cool,  makes sense, plus I think Peter Drucker might agree.

So, what are your goals? What are your intentions?  Do you just want to make a profit, or is making a difference important to you too?  What are you going to do in your business to emerge from the average, the typical, to combine these two ideas and make some real change?
Hello, are you listening….Are You A Change Agent?

P.S…this doesn’t just apply to “Entrepreneurs”   See Why.

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