The Four Quadrant Theory of time management offers a simple way to prioritize your work. It was popularized by Stephen Covey is his longtime best-selling book, The Seven Habits of Highly Effective People. I have seen U.S. president Dwight Eisenhower credited with actually creating it.

The basic tenant of the theory is that all tasks can be effectively prioritized by two criteria: how important they are, and how urgent they are.

Importance

In terms of trying to grow and prosper with regard to your small business, you can best think about importance as “How important is this task for driving ahead the long-term success of the business?” There are exceptions when this perspective doesn’t work—for example, when you are facing an immediate struggle to keep the business out of bankruptcy, then your importance question might focus on “How important is this task for keeping us out of bankruptcy and ensuring the business will survive?”

Urgency

I think for a business that you can best think of urgency as “If I don’t do this task soon, will performing the task at some later point in time be less valuable?” Note that under urgency we are not asking how valuable the task is at either date to the entire business, only how time-sensitive it is. If performing the same task at a later point in time will be just as useful and valuable, then it is not time-sensitive; it is not urgent.

So by using these two criteria, you can divide all tasks into four groups, or quadrants, as the graphic shows.

Important but Not Urgent

An example is working on next year’s business plan. Creating a great annual business plan is extremely important to running a successful business. But it is not urgent because whether or not you finish the plan a week from now or a month from now will probably not have much impact on how effective it is in running the business next year.

Important and Also Urgent

You need to prepare for tomorrow’s sales presentation for a major new product launch for your largest customer. It is important because the presentation will have a significant impact on the successful launch of the major product. It is critical because the presentation is tomorrow, so if you prepare later than today the effort will be wasted.

Not Important but Urgent

You are planning on replacing the wastebaskets in your office. The office furniture store you plan on buying them at is running a sale that will allow you to save 20 percent on this purchase if you place the order today. Whether or not you replace the wastebaskets is not important because it is going to have very little impact on the overall success of your business. But the task is urgent, or time-sensitive, because if you don’t place the order today you will pay substantially more for the same order tomorrow. Note that it doesn’t matter in evaluating urgency that the overall cost of the wastebaskets is very little.

Not Important and Also Not Urgent

You want to clean out the mess in your supply closet. It is not important because it will have very little impact on the overall success of your business. It is not urgent because whether or not you organize it today, next week, or next month, you will obtain approximately the same value from the task. It is not time-sensitive.

If you haven’t encountered the concept of the Four Quadrant Theory of time management before, I think it is important to completely understand it. However, keep in mind that I have outlined the general principles of the Four Quadrant Theory here in a rather simplistic way.

In reality, while I appreciate the theory and implicitly incorporate it into my thinking, I don’t follow it exactly. For example, another important dimension to weigh may be “How much time will the task take?” If one task is twice as important as another task but will take ten times as long to do, I might accomplish the shorter task first.

Then some tasks might take more energy or effort or thought and I might decide to do tasks like that when my mind is fresh and full of energy.

For other tasks that may be extremely important but not necessarily critical, like reflecting on my overall business strategy, I might just wait for that perfect moment when I am feeling not only fresh and full of energy, but also unusually inspired, creative, and upbeat. For example, if some unimportant or especially critical but unimportant task crops up, I might “knock them out” just to get them out of the way, to de-clutter my to-do list, and to de-clutter my mind.

Another thing I like to do is knock out a whole bunch of roughly similar tasks at once. I find I am much more efficient this way. So, for example, rather than taking advantage of a wastebasket sale today and a chair sale tomorrow, I am more likely to update all of our office furnishings at once and get the best price I can at that particular point in time.

Although I appreciate the Four Quadrant Theory of time management, I don’t actually put my tasks into four boxes. When I am working most effectively (which is seldom, to be honest!), I create a “master list” of all my upcoming key tasks for the month and group them by priority. Then I might edit the list, adding new tasks and deleting completed tasks from this one list during the month. Then I might have some small tasks that are on my daily to-do calendar that don’t even show up on the “master list.”

So, while the Four Quadrant Theory of time management may not be the total perfect solution, it is a great place to start to quickly get a grasp on how to prioritize your work.