The 80/20 Principle

What is most simple and standardized is hugely more productive and cost effective than what is complex.

The 50/5 Principle asserts that, typically, 50 percent of a company’s customers, products, components and suppliers will add less than 5 percent to revenues and profits.

The 50/5 Principle asserts that, typically, 50 per cent of a company’s customers, products, components and suppliers will add less than 5 per cent to revenues and profits.

Cutting the number of products, customers and suppliers usually leads to higher profits, partly because you can have the luxury of just focusing on the most profitable activities and customers.

Simplicity raises prices as well as lowering costs.

The key problem with head offices is not their cost. It is the way they take away real responsibility and initiative from those who do the work and add the value to customers.

Where a chunk of business is simple, the chances are that it is closer to the customer.

You don’t need to wait. ‘If your eye offends you, pluck it out!’ Just remove the offending overhead.

The need for overhead coverage from unprofitable segments can disappear pretty quickly.

All organizations are a mix of productive and unproductive forces: people, relationships and assets.