Warren Buffett’s 5/25 Rule
Warren Buffett’s 5/25 Rule

Warren Buffett’s 5/25 Rule

Prioritization is hard… Warren Buffett’s approach is easy to understand, but difficult to follow.

What’s the 5/25 Rule?

Buffett’s approach to prioritization starts in a standard manner: he recommends we make a Top 25 list of the things we want to accomplish. And then he suggests we organize our time around the top 5. No surprises at all yet.

The nuance comes when he then mandates we must avoid spending ANY time on priorities 6 to 25.

These are seductive distractions, and we need to “strategically underachieve” by choosing not to put any energy into any of them.

The crux is we cannot spend ANY TIME at all on priorities 6 to 25.”

Every hour we spend on a lower priority is time he argues we could - and should - spend on one of our top priorities. They’re literal distractions, distracting us from what matters more.

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When to use the 5/25 Rule?

We’ve seen 5/25 work in several areas:

  • PRODUCT PRIORITIES: here’s a great 3-minute video from Steve Jobs in 1997 right after he returned as CEO talking about how Apple’s “sum was less than the sum of its parts” and about “how focusing is about saying ‘no’.”
  • Staying with Steve Jobs, he’s also part of a favourite anecdote from Jeff Weiner, LinkedIn’s CEO from 2009-20 (and on both of our Mount Rushmores for legendary operators). Jeff shared in this NY Times interview that Jobs joined a Yahoo! offsite in 2007 and taught him:
“True prioritization starts with a very difficult question to answer, especially at a company with a portfolio approach: If you could only do one thing, what would it be? And you can’t rationalize the answer, and you can’t attach the one thing to some other things. It’s just the one thing. And I was struck by the clarity and the courage of his conviction. He felt it so deeply, and there wasn’t a person in the audience that day who did not take that with them as a lasting memory.”
  • BTW since we’re business geeks and John was at Yahoo! from 2006-2010, we couldn’t resist linking to “The Peanut Butter Manifesto” by Brad Garlinghouse (now CEO of Ripple), published in 2006: it sounds like the opposite of 5/25
  • CHANGE MANAGEMENT: we’ve both seen leaders come into big new roles - often from outside the company - and suddenly decide that a dozen things need to change ASAP. This is a recipe for failure since “more is less” when it comes to change management and trying to pull your priorities and message through (see our experiences below).
  • PERSONAL PURSUITS: 5/25 can be especially helpful with New Year’s Resolutions and Annual Goals. We’ve both been guilty of peanut-buttering our focus across 15+ priorities on January 1: we’re going to read, write, exercise, and meditate more, eat plant-based diets and learn new languages and technologies, while also becoming better dads, spouses, siblings, friends, mentors, and leaders. Then March 1 arrives, we’re making limited progress on most of our supposed priorities, and we give up on the majority of our list.

How do we use the 5/25 Rule?

James:

At work, I’ve rarely cut a list at exactly 5 priorities - why not 3? Why not 7? - but I’m a stickler for stack-ranked lists. Especially when it comes to GTM folks giving feedback to R&D teams. I’ve shared something along this dozens of times: ”It’s not whether your product suggestion is a good idea; it’s whether it’s a better idea than everything else we have planned. Therefore, the more you can stack-rank what you’re hearing from customers, the easier it is for us to figure out if and where to slot it into our roadmap.” Outside of work, I took a year-long career break from late 2022 through late 2023 and did a pretty good job of adapting 5/25 to 2/25: I focused almost my entire year on kiddo time + open water marathon swimming, turning down almost everything else to zero. My extreme focus had pluses and minuses, documented in this write-up:

John:

I haven’t used 5/25 exactly, but I’ve learned over and over again that “less is more” when it comes to priorities. We often talk about projects consuming a lot of “bandwidth” but I think we also underestimate the duration required for real change management. - During the Yahoo! glory days, I learned about the commitment it takes to change something successfully. A senior exec taught me it takes 3 quarters for any change to take hold in a sales org because Q1 is resistance, Q2 is begrudging compliance, and Q3 is finally, “aha, this new stuff actually works.” - Even at a much smaller company, CyberGRX, I found that there are no shortcuts to change management. You can have a direct relationship with most people on your team, but making real change still requires a ton of preparation, repetition, and encouragement. I’m sure you can remember how many times at LinkedIn Jeff (Weiner) would share, “You need to repeat yourself so often that you’re sick of hearing yourself say it; only then are people beginning to remember the message.”

James:

Jeff called it David Gergening, after the advisor to several Presidents. It’s in my top 3 “Jeffisms” and is a concept I share with somebody I’m meeting or advising at least once a month. Getting meta for a second, I’m sick of hearing myself talk about how important repetition is ;) Here’s Jeff’s full piece about the importance of repetition.

John:

Let’s see if we can get Jeff to go in-depth with us on some of his frameworks. He’s the king of using frameworks to operate and would be an amazing interview.

JAMES:

Deal, let’s make it happen. [Jeff: if you’re reading this, here’s your invitation!]

Want to learn more?

WANT TO GO DEEPER ON 5/25?

If you like a British cockney accent - think Michael Caine - and want to spend 6 minutes digging in with some sort-of-cool, sort-of-cringe graphics, this video is for you…

James Clear is a fan of 5/25 too [he’s the author of Atomic Habits, a book James in particular loves (read his What’s the So What write-up here)]

Hmm, perhaps Uncle Warren didn’t author 5/25? No matter, we still love it…

WANT TO GO DEEPER ON PRIORITIZATION MORE BROADLY?

Our first Blueprint Favourite Operator interview was with LinkedIn COO Dan Shapero on The Priority Matrix (PMAT)The Priority Matrix (PMAT).

We’re also fans of Hamilton Helmer’s 7 Powers, popular with the Acquired crew. We’ve also directly benefited from Jeff Weiner’s idea of the prioritization bullseye, covered amongst a range of helpful counsel in this interview with Henry Blodget.

Expanding from prioritization to decision-making, we’re both big fans of Jeff Bezos’s 1-Way vs 2-Way DoorsJeff Bezos’s 1-Way vs 2-Way Doors and we’ll Blueprint RAPID sooner than later.

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