[Index: INTRO, Step 1, 1b, 2, 3, 3b, 4, 5, 6, 6b, 7, 8, 9, 9b, 10, 10b, 11, 12]

WARNING… you might be successfully failing! Even a finely tuned and designed Ferrari will fail if driven in the direction of a brick wall.

STEP 3 – Separate Efficiency from Effectiveness

What if you are doing the WRONG things RIGHT?

Here is where we are so far:

In Step 1 we figured out the things we needed to stop doing—our compulsive responses to work addictions, and the things that suck up most of our time, attention and life force.

In Step 2 we learned to set and protect our boundaries so other people or outside forces would not fill our newfound time, energy and capacity with derailing activities.

Now, in Step 3, we need to ensure our time is focused to gain maximum success in the shortest amount of time, allowing us to compound achievements at a much faster rate.

Take a look at the graph to the left. Direction is more important than speed. The right side of this chart is the “right” side. Even the upper right—doing the right things not very well—will take you further.

A Ford Pinto going in the right direction is better than a Ferrari headed toward disaster. The goal is to do the right things right. It’s tough to beat a Ferrari heading in the right direction and squarely at the finish line.

I have friends on both extremes of this principle:

1. One friend is a rather unsophisticated person in his business acumen. Everything in his business is done on paper, he does his accounting by hand, all his transactions are entered manually, none of his systems are automated and he is still baffled by e-mail. But his business is incredibly successful, and he is worth a significant fortune.

2. My second friend is an amazing talent. His business is automated in a way that would awe-inspire Bill Gates. He is on the cutting-edge of every technology and gadget you and I still don’t know about. He is operationally efficient, and has flawless and relentless execution. His business is failing miserably, and he is on the verge of bankruptcy.

What’s the difference?

Even while friend No. 1 might operate sloppily and be somewhat inefficient, he is doing the right things in his business. That could be his UVP (Unique Value Proposition), business model/positioning, focus on sales and revenue, world-class customer service or attention, etc. He is excellent—where it counts.
My other friend is executing excellently in the wrong things. In other words, he is a Ferrari headed in the wrong direction.

Find your vital few.

I read a great book, Vital Factors, in which the authors suggest boiling down your business to the most essential “vital signs” that can tell you its health and success at any given moment. Just like with the body, I can ask how you are feeling, and you can say you have a headache, a sore knee, a hang nail on your pinkie, etc., but if you are in intensive care the only things that matter are your vital signs—body temperature, heart rate, blood pressure and respiratory rate. Those are the signs that tell us whether you are living or dying.

In a business, there are also vital signs that need to be monitored daily. They might not be as discernable as revenue, margin and profit if you can’t measure those numbers daily in your business. You need to determine the daily functions that drive those ultimately important statistics. Maybe its click-throughs, site visits, shopping cart transactions or average price per order. Maybe it’s the number of calls made, appointments set, presentations delivered and purchase orders issued.

The key is to figure out the daily vital signs for you and your business. Those functions should drive your weekly vital statistics, then your monthly, quarterly and annual ones. Now all (80+ percent) of your time, energy and creative capacity need to go, exclusively, to activities that directly drive those numbers.

Learn to value your time to produce your worth.

Let me give you another perspective for the reason to focus strictly on what drives your vital statistics and your resulting income.

Let’s say you want to earn $150,000 a year. That’s about $3,000 per week, $600 per day and at least $60 per hour, thus $15 every 15 minutes and $5 every 5 minutes. That means if you spend 15 minutes chatting with a co-worker in the hallway, begin working 15 minutes later than you should, take 15 minutes extra at lunch, you need to pull a $10 and $5 bill out of your wallet—it costs you $15, each and every time. Over the course of a month, a quarter and a year, you can see how that can drastically erode your earnings outcome.

Correspondingly, every hour of your focused work time ask yourself, “Is what I am doing right now going to produce me $60 in income?” If not, you are likely working on ineffective activities, not those that drive your vital factors.

When I gained this perspective and wanted to earn an income much greater than the analogy above, I became vigilant about the value of my time and the value of strictly focusing on what was most effective for driving my vital statistics.

My recommendation to you: Determine your core vital factors (three to six statistics) for your business annually. Revenue and net income will certainly be factors. Now break down that number quarterly, monthly, weekly, daily and hourly. Now you have perspective on the productive financial output you and your business need to be responsible for each hour to reach your annual goal.

Next, take your daily vital factors and figure out the exact few functions and behaviors responsible for driving those vital factors. Now be sure that you spend most of your time on those functions. Most everything else can be ignored, forgotten or remain inefficient, as those things are mostly distractions from what’s responsible for your success.

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