5 Things Every Business Person Needs to Know (Part 4)

I was thinking about Italian economist Vilfredo Pareto today. Well, not so much Pareto as his famous saying that 20% of the people own 80% of the wealth. Historically, we’ve taken creative license with his words – 20% of our customers generate 80% of our revenue, 20% of the people create 80% of our headaches, etc.

That leads me to the next topic on the list of things you need to know: PROJECT MANAGEMENT. Pareto’s principle is actually one of the most effective tools used in project management because it teaches us how to stop using 80% of our resources to generate 20% of our profits.

Project management is a science with a defined methodology. It’s about achieving the scope of a project while at the same time maintaining quality, optimizing resources, and fulfilling deadlines. It’s the classic 3-legged stool with results, resources, and time as the legs and a bucket of water on top called the scope. If you effectively manage all the components, then the water (or scope) won’t spill over the side.

In today’s economy, we are all being asked to do more with less. Doing more doesn’t mean physically doing the work. It means making sure that the work gets done and, usually, with fewer resources. That’s where the tools of project management become critical. Maintaining balance on the 3-legged stool will result in greater performance with efficient utilization of resources. That translates into a higher profit margin.

And learning the discipline of project management can reap everyday benefits in your career. While you might not create a GANTT chart every day, you will engage in communication. And, that’s what project management is about – communicating. As a project manager, you have to communicate everything from the goals of the project to resolving conflicts as they occur and, in most cases, reporting out on the final result.

I’ve seen a lot of companies struggle because all they do is promote the most technically competent people into leadership positions. But, the growth of a business depends on people who can lead and manage. Project management helps you shift the paradigm from doing the work to managing the work.