Somewhere around 1906, economist Vilfredo Pareto observed that 80% of the land in Italy was owned by 20% of its citizens. Sometime later he noted that 80% of the peas in his garden came from 20% of the pods. Thus, the well-known 80/20 rule was born. During his career he studied this as it relates to distribution of wealth and income. As a side note, his work was very controversial during the rise of Fascism
In the 1940s, Management Consultant Joseph Juran applied this principle to business. “80% of our revenue comes from 20% of our customers” and so on.
Today it is primarily a “given” that 80% of the sales come from 20% of the salespeople. A debate crops up from time to time regarding the best use of a sales manager’s efforts. Should he nurture the top 20%, the middle 60% or the bottom 20%. Several schools of thought exist as to the best answer.
Here’s the rub. Many people consider the 80/20 rule as a truth. It may be a truth but it most assuredly is not an absolute truth.
The best example of truth Vs. absolute truth I have heard is this: Read the rest of this entry