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Don’t be a slave to the 80/20 rule

Also known as the Pereto principle. It was Vilfredo Pareto who, in 1906, observed that about 80% of the land in Italy was owned by about 20% of the population. He also noted that about 20% of the pea pods in his garden contained about 80% of the peas! (Wikipedia)

So we all know that 80% of our business comes from 20% of our customers and 80% of our debtors is owed by 20% of them as well. And so it goes on. Here are some more from Richard Koch “

Living Life the 80/20 way

  • 80% of a company’s profits come from 20% of its customers
  • 80% of a company’s complaints come from 20% of its customers
  • 80% of a company’s profits come from 20% of the time its staff spend
  • 80% of a company’s sales come from 20% of its products

     

  • 80% of a company’s sales are made by 20% of its sales staff

 

I was talking to a school principal the other day and he told me that 20% of the parents weren’t interested in their childrens’ schooling. I guessed that they were the same 20% who were always behind with their school fees and their kids were the 20% who performed worst and caused the most trouble. That’s when I got to thinking again about the 80/20 rule

Who says it’s a RULE?

As soon as you accept that it is a rule, you accept that you can’t do anything about it.

It’s not a RULE it’s a CHALLENGE!

your company is forced to employ more staff, rent bigger premises, carry more inventory, it’s the 80% rubbish (the 20% in the case of the school) that is forcing the extra cost. That’s not the fault of the “rule” it’s your fault for not doing something about it

Should you wish to make an appointment, please feel free to visit Derek’s diary and book a time that suits you.

 

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