How Google Works: The 80% Rule

Great business leaders usually have great teams behind them. As we have discussed previously on this blog, Google's incredible success is the result not just of great executives, but of a company culture that prizes innovation and strategic thinking. They hire top talent, encourage transparency and collaboration, and employ practices that focus and inspire their employees. 

We've analyzed Google's hiring practices and their efforts to create transparency in the workplace. Now it's time to discuss their strategic time-management practices as illuminated by former CEO Eric Schmidt in his inspiring and challenging book, How Google Works.

The 80 Percent Rule

Schmidt writes:

“When I became CEO of Novell in 1997, I got some great advice from Bill Gates on how to manage the company.  He said, ‘Spend 80 percent of your time on 80 percent of your revenue.’”

He credits this advice with helping him focus on the most important aspects of the business during his time at Google's helm. If we are to follow this inspiration, there are several important steps that must be taken to ensure we delegate our time, remain focused, and stay determined as successful business owners and entrepreneurs. 

Prioritize

Schmidt claims that he took Gates' advice to heart and spent 80 percent of his time each day on the tasks that generated 80 percent of his revenue. The first step towards duplicating this strategy is to identify the tasks associated with that 80 percent.

Make a list. Prioritize the list by placing what needs to get done and what is the most important at the top. These “Most Important Tasks” (MITs) are a small, yet vital group of tasks that should be attended to immediately. Belle Cooper explains in her blog,

“When using MITs, your to do list would have 1-3 of these and anything else listed would become bonus, 'nice to do if you have the time' tasks. You only work on bonus tasks if all your MITs are done, and if all you get through are your MITs, you've still had a successful day.”

Are those emails you’re choosing to send something that has to be done this very second? Does that employee or customer inquiry need to be responded to within the hour it is received? If we can answer no, then it probably can wait and our valuable time can be spent on something that is creating value and revenue for the company. This doesn't mean putting off those smaller tasks forever, but spending the majority of our time on the most valuable tasks.

Tomorrow Begins Tonight

Our first hour of work every day tends to be when we are the most fresh and energized, so we should begin the day with our most important tasks. As Arina Nikitina recommends in an article for LifeHack,

“Put all the taxing, difficult and challenging tasks on your agenda during the first hour… such methods make you stay focused at work, without spending precious time on doing tasks you don’t like.”

Outlining these first few hours of work the night before ensures our most productive hours aren’t wasted.

Give Yourself A Break!

So what happens to the other 20% of your time? During Schmidt's tenure at Google, The "ITO (Innovative Time Out) Policy" gave employees the freedom to use that remaining 20% of the work week (or roughly one day) to focus on work-related innovation tasks that connected with their personal passions and interests.

This time isn't "down time" or Facebook surfing time — it allows employees to recharge their work by combining their own interests with the company's interests, and often results in major innovations. In fact, as LifeHacker notes,

"notable 20% projects include GMail, Google News, Google Talk, and AdSense. According to ex-employee Marissa Meyer, as many as half of Google's products originated from that 20% time."

The major benefits of the 80% rule, better prioritization and efficiency for key tasks, free up that 20% of your time to advance your business in potentially unexpected ways. In addition to re-engaging employees by giving them the freedom to connect work with their own passions, it capitalizes on those passions to drive the company forward. Sounds like a situation in which everybody wins!

We'd love to hear your strategies for defining priorities at work - tweet them @EidsonPartners!