The Pareto principle or the law of the vitals says that 80% of the results come 20% of the efforts. So if you run a business, 80% of the revenue comes from 20% of the efforts. Now using this rule of thumb might lead you to the conclusion that you should go ahead and eliminate 80% of the products that don't provide as much revenue as others.
But the paradox lies in the fact that now you have another 80/20 breakdown, and if you continue in this fashion, soon you'll have nothing left to call revenue.
The 80/20 rule is nothing more than a negotiation gambit; don't get blindsided by its simplicity.Stick to actual data and rule this rule of thumb out.
But the paradox lies in the fact that now you have another 80/20 breakdown, and if you continue in this fashion, soon you'll have nothing left to call revenue.
The 80/20 rule is nothing more than a negotiation gambit; don't get blindsided by its simplicity.Stick to actual data and rule this rule of thumb out.
