SM2: The 80/20 Principle

The Amazing 80/20 Principle has the power to grow your business up to 16 TIMES FASTER and make your life a whole lot less busy and complicated.

Got your attention?

We consider it one of the fundamental rules contributing to optimising your business for growth and productivity with least input of your time and resources.

Richard Koch lists 10 areas where 80/20 can be applied in a business as the first 10 below. We think there are others as well and have added them to the list.

1. Strategy
2. Quality
3. Cost reduction and service improvement
4. Marketing
5. Sales
6. Information technology
7. Decision making and analysis
8. Inventory management
9. Project management
10. Negotiation
11. Staffing
12. Time Management

To take is further, the 80/20 Principle asserts that a minority of causes, inputs or effort usually lead to a majority of the results, outputs or rewards.
Taken literally, this means that 80 percent of what you achieve in your job comes from 20 percent of the time spent.
This implies that:
• 80% of your sales will come from 20% of your products.
• 80% of your time produces 20% of your gain.
• 20% of your time produces 80% of your gain.
• 80% of your problems will come from 20% of the people.

The 80/20 Principle is widely referred to throughout 12Faces.

SM2.5 How to do an 80/20 Data Analysis

We frequently refer to the 80/20 Rule in 12Faces.  It assumes you can spot the best and worse performers among your products, market, staff and customers.  This article explains the simple methodology behind quickly allocating each candidate to a slot in the rankings chart.  Blue Belt


SM2.10 80/20 Sales Growth; Double Sales, Triple Profits

The 80/20 Rule is readily applied to your sales team and processes. We outline some of the ways to improve sales performance in this discussion. The 80/20 Rule points out that sales can improve by as much as 16 times through diligent implementation of its principals.  That might be a...