The Crucial 20% That Moves The Needle
I’ve built seven businesses and coached well over 100 CEOs in the last decade.
There’s one pattern I've seen (and experienced) in exponential growth across all industries, whether the business is venture-backed or bootstrapped:
Business success comes from a tiny fraction of activities - the crucial 20%.
Known as the 80/20 rule, this powerful concept remains highly underutilized by CEOs.
Instead of focusing on the crucial 20%, most CEOs end up working in what I call the sludgy 80%.
The sludgy 80% are the things that need to get done but don’t significantly move the business forward. They’re a hindrance, slowing down progress. You end up working on the wrong things, which steals growth from you and the business.
Not only does it steal it, it suffocates it.
While pretty much anyone can pile on a long list of things to get done, work all night, and live to repeat it day in and out, very few can pull themselves above the noise.
Imagine what your business would look like if most of your time was solely focused on what moved the needle.
Think of the growth and clarity you'd have. Can you imagine what your days would look like? What would your business would look like?
While it takes work to set up, it’s time worth investing. You'll go from playing checkers to chess.
Today I’m giving you a powerful playbook to quickly get clarity into what you’re working on, and what the business needs you to work on: The Crucial 20%.
This is the same playbook I’ve used in building each of my businesses, and the same playbook I use with my clients.
Let’s dive in.
The Efficiency Hamster Wheel
I recently spoke to a founder with a nice-sized business of ~$10M in annual revenue. Although the business is doing well, it’s not reaching its full potential. After our conversation, it was clear that the founder was stuck in the sludgy 80%.
He was being pulled in 100 different directions, and with the best of intentions, focusing his efforts on increasing efficiency within the business. This was his best approach to growth. Optimize, and increase efficiency.
But he was stuck in the efficiency hamster wheel.
He’d built a beautiful ship that had tremendous potential. But as he steered that ship things began to break. Holes cropped up and it turned out he didn’t have the right team to fix the holes.
Like any of us in his position, he was determined to NOT let his ship sink. So he started to fix the holes. And as he fixed one, another one cropped up, and so on.
He’s great at fixing the holes. He’s been doing it for so long, that he’s now trying to figure out how to outsmart the holes. His thinking is the better he can get at fixing holes, the more holes he can fix!
The boat is definitely not sinking. But it’s also not moving much. It’s floating. Surviving.
He measured success by how many things he got done, not by how far he took the business.
He needed to find people to fix the holes, so he could switch to working on the crucial 20% that would move the business forward.
Here’s how we did that…
Step 1: Be Specific About Where The Business Is Going
The first thing to do is to look at the business's specific goals for the next 12 - 18 months. These should be the most impactful things that will push your business into its next stage.
You won’t know if you’re working on the right things without having specific goals for the business. Notice here the term I used: specific goals.
General goals tend to be difficult to measure, making it difficult to plan for how to reach them. It’s also difficult to know what you as CEO should be doing to reach them.
Specific goals are the money makers. They’re measurable, time-bound, and detailed, giving us a solid way to plan and evaluate our progress.
Be very specific with your business goals. How much revenue are you planning to reach? Where are you expanding to? What kind of margin are you shooting for? In what time frame?
Here are some examples of general vs specific goals:
Step 2: The Crucial 20%
Next, you’ll outline the crucial efforts needed to reach the business goals.
For example, one of the businesses I run is Alice, an agency that helps CEOs hire a vetted and trained Executive Assistant (EA). This is a new business just getting off its feet, reaching predictability in the last few months. It’s now ready to scale.
Our goal for this year is to reach $3M in revenue with a 68% profit margin, and less than 2% churn.
To reach this goal, we need to do 3 things:
Expand marketing efforts: lean into those that we know work, and start testing new
Automate with tech across the business to keep profit margins high
Invest heavily in EA training, and the caliber of CEOs we partner with to reduce churn
This is the crucial 20% that moves the needle. These 3 efforts will give us the strongest ability to reach our goal.
Step 3: What Does The Business Need You To Work On?
To make this a bit more objective, think about what it might look like if you were to hire a CEO, paying them $1M in annual salary.
With that kind of comp, you’d have high expectations they’re going to reach your business goals. But now think about what you’d expect the CEO to focus on.
Would you love them to spend their day solving HR problems, answering emails, and putting out fires for the team with no time for business growth? Probably not.
List out what the business needs the CEO to focus on to reach the business goals. Each of these areas should align with the crucial 20%.
This is what you should be focusing on as CEO - today.
Step 4: Analyze Without Judgement
This is by far the toughest part of the process. Most of us know we aren’t working on the right things, but avoid looking at it analytically to create a plan to get out of working in the sludgy 80%.
My best advice here is to give yourself grace.
This is a common stage just about every CEO experiences when they’re ready to scale, even the most well-recognized. I see it all the time in my clients and peers.
You can’t learn this without practice. But you do need to learn this, and you do need to practice getting better at this to scale your business.
Without judgment, take a hard look at where you’ve spent your time over the last couple of weeks (or days).
Start at the beginning of each day. What meetings did you attend? What were they? Who was there? Why did you need to be there? What emails did you respond to? Who did you help? What did you fix?
Take stock of everything you’ve done.
Once you’ve listed out everything, look at which of these things you can eliminate, or hand off to someone else on your team. If you don’t have that person on your team today, put a note next to it to hire for it in the future.
Step 5: Create The Crucial 20% Plan
Like anything else in your business, you need a plan for how and when you’ll be able to start working on the crucial 20%. It might be in phases or all at once. Do whatever works best for your business.
The plan should include two phases:
the handoff of things you've been doing in the sludgy 80%, and
when you'll start working on high-impact areas the business needs you to work on, the crucial 20%.
A few tips for The Crucial 20% Plan:
Look for groups of things that can all go to a new hire, or someone on the team you trust. For example, let’s say you’re approving marketing decisions, sitting in on marketing meetings, and reviewing marketing reports. These are great to hand off to someone you trust.
It could be a new hire, or may turn out this person is already in your org but needs to stretch themselves a bit over the next few months to take it on fully.Put firm dates on when you expect to be able to hand off or stop doing each item in the sludgy 80%. This will keep you moving towards executing on your plan rather than hoping it will happen one day when you're not so busy.
Put a goal date for when you’ll be taking on your new CEO role and working on the crucial 20%. Is it three months, or six? Time boxing will you give you a north star, and make this real, not a wish.
Putting It All Together
I've seen firsthand how focusing on the crucial 20% transforms not just businesses, but also the lives of the leaders themselves. That's exactly what it did for me.
After I mastered this, I’ve been able to scale multiple businesses. The playbook stays the same no matter what the business is.
Instead of relying on brute force to scale the business, it becomes a game of strategy.
You’ll spend your time and energy in thoughtful planning and execution, not reacting to every fire. With this approach, the business thrives - growing much more sustainably and profitably.
Looking For More In-Depth Help?
Here are a few ways I can help:
⚫️ The 20 Hour CEO: Five-week live cohort where you'll learn how to scale yourself and your business, with 1:1 coaching from me. I share my exact methods, playbooks, and actionable strategies for building 3 businesses to $200M. Join the waitlist to learn when the course opens back up.
⚫️ The 20 Hour CEO Video Replay Course: Created for greater accessibility, this is the exact same course without the 1:1 coaching or community. You'll get instant access to all the templates, frameworks, and playbooks included in the live course.
⚫️ CEO Coaching: Private coaching for early and growth-stage entrepreneurs who want to lead more effectively, while increasing their resiliency. See if we're a good fit here.