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When you are feeling overwhelmed by so much to do, do you ever just wonder how the richest people on the planet manage it all? As of last month, Warren Buffett – through his primary company Berkshire Hathaway — owns more than 65 companies that are diversified across the technology, consumer cyclical, energy, financial services, and healthcare industries. Of those, 47% of the portfolio is dedicated to financial services and 27% to technology companies, which are evolving at a rapid-fire pace. Jeff Bezos is best known for founding eCommerce behemoth Amazon in 1994. Today, Amazon has 40 subsidiaries in several industries, including health care, retail, robotics, real estate, and media. But Bezos, personally, also has direct investment in 38 additional companies through his investment arm, Bezos Expeditions. Meanwhile, Elon Musk cofounded and runs six companies including electric car maker Tesla, rocket producer SpaceX, tunneling startup Boring Company and social media platform Twitter. These three individuals own a total of 149 companies and they have a combined net worth of nearly $500 Billion dollars.
Imagine what the task list might be like for three people running 149 highly-complex, profitable companies. While they obviously have a platoon of brilliant Execs overseeing the battalion of top Chiefs running those companies, who in turn each have an entire division of brilliant mid-level managers and employees they oversee, ultimately these three men must at least manage the top Execs. These are people who don’t do any of the mundane things that most business owners do such as shopping, cooking, cleaning, or organizing. They have people for all that. But there are some things that cannot be delegated such as time for family and friends and the demands that accompanies those relationships. So how do they do it all and still find time for eating, grooming, and sleeping? These are people who have mastered the art of time and task management.
Warren Buffet’s So-Called 25:5 Rule
In the case of Warren Buffet, a legend arose about how he managed tasks. The story goes that Buffett told his personal pilot Mike Flynn his method for prioritizing his life’s goals and thus his tasks. It became known as Buffett’s 25/5 Rule. It boiled down to three basic steps:
- First, write down a list of your top 25 work / career goals.
- After carefully reviewing the list to ensure the most important goals are on it, circle the five most important ones that truly speak to you. These are the highest priorities on which to focus.
- Cross off the other 20 goals listed that are “less important”.
That’s it. No effort at all should be invested in the 20 goals that are not the highest priority. They rob focus and energy from the five highest-priority goals. Delete, defer or delegate them. But don’t try to work on them at all today. That’s the advice, and it’s good advice, but it actually has been debunked as a myth. Buffett never actually shared this compelling advice with his personal pilot or anyone else.
In fact, at the Q&A Session of the 2013 Berkshire Hathaway Shareholders Meeting, Alex Banayan, author of The Third Door, asked: “Mr. Buffett, I’ve heard that one of your ways of focusing your energy is that you write down the 25 things you want to achieve, choose the top five and then avoid the bottom 20. I’m really curious how you came up with this and what other methods you use for prioritizing your desires?” Mr. Buffett replied, “Well, I’m actually more curious about how you came up with it.” Buffett explained that he and his business partner, Charlie Munger, are not disciplined enough to make decisions that way. He added that “I can’t recall making a list in my life.”
The 25/5 Rule is really 80:20 Rule of Saying No
So what does that say about Buffett’s so-called 25:5 Rule? Well, it may not be properly credited as his advice but the system does boil down to what Buffett actually does recommend: “Say No to almost everything.” Buffet recommends ruthless prioritization that requires saying “No” to 80% of tasks that try to get on his plate. That means he says yes to 20% (which is the same as picking 5 out of 25, which is also 20%).
Making the list of the top 25 goals helps to get priorities separated from what is a clear waste of time. It’s the first step of prioritization. But then applying the “no” rule when going through those 25 goals forces you to ask yourself: “What 20 things do I have to say “No” to so that I am able to focus intently on the five most important goals that require a “Yes.” Once the list is down to five goals, then it is possible to focus all efforts on getting those five highest priorities done at all costs, no matter what. That is the 80/20 Rule. Say “No” to 80% of what is requested.
The Power of Elimination
For many, saying “No” to that much is very difficult or nearly impossible. But only by doing that can you maximize your productivity by spending time only on things that will propel you toward success. According to James Clear – author of Atomic Habits who writes about habits, decision making, and continuous improvement – there is power in Elimination. He sees eliminating the inessential as one of the best ways to make life easier, make good habits more automatic, and increase gratitude for what you have. To Clear, getting rid of wasteful items, decisions and tasks is relatively easy. What isn’t so easy is to eliminate things about which you care. It is hard to prevent spending time on things that are easy to rationalize, but have little payoff… items 6-25 on the list. The tasks that have the greatest likelihood of derailing progress are the ones you care about but aren’t actually important. Clear rightly points out that “every behavior has a cost.” Even neutral behaviors aren’t really neutral. They take up time, energy, and space that could be put toward better behaviors or more important tasks.
This is why Buffett’s strategy is particularly brilliant. Items 6 through 25 on your list are things you care about. They are important to you. It is very easy to justify spending your time on them. But when you compare them to your top 5 goals, these items are distractions. Spending time on secondary priorities is the reason you have 20 half-finished projects instead of 5 completed ones. Eliminate ruthlessly. Force yourself to focus. Complete a task or kill it.
One Essential Task for Success
A huge part of task management is about knowing what is most important, rejecting everything else, and focusing only on that relentlessly. So what does Buffet focus on relentlessly that has made him successful – and is also a top priority for other hugely successful people such as Bill Gates, Elon Musk, Mark Cuban and Mark Zuckerberg? Learning. Buffett’s goal is to go to bed a little smarter each day.
According to Buffett, “That’s how knowledge builds up. Like compound interest.” In theory, the Buffett formula should give you the same advantage over a lifetime as it has for Buffett. The way he does it daily is by reading voraciously. He sees that as the foundational tool to improve knowledge and spends 80% of every day reading. He reads six newspapers a day, including The Wall Street Journal, Financial Times, The New York Times, USA Today, Omaha World-Herald, and American Banker. He also reads countless books, but sticks to non-fiction. He estimates that he reads about 500 pages a day to improve his level of knowledge. He knows that the mind is the most powerful weapon to succeed in business. But Warren Buffett is not the only billionaire who credits success to reading as a top daily task. Tech entrepreneur Elon Musk reportedly learned how to build rockets by reading books. Bullied a lot as a child in South Africa, Musk found comfort in fantasy and science-fiction books. Another a lifelong bookworm, Bill Gates reads about 50 books a year, but strictly nonfiction ones. Similarly, in 2015, Mark Zuckerberg invited the world to join him on his quest to read a book every two weeks or 26 books in one year. While all of these people get to visit a lot of places and meet interesting people, they would still rather read books to acquire new knowledge. So the key is to make learning one of the 20% of priorities that get a Yes and are on each day’s list of things to do. Hopefully that reading is related to the other four goals that got a Yes.
Next week, we’ll look a few other systems for prioritizing tasks to help eliminate the chaff and keep the wheat. Stay tuned!
Quote of the Week
“The most dangerous distractions are the ones you love, but that don’t love you back.” James Clear
© 2023, Keren Peters-Atkinson. All rights reserved.
