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Advice Centre
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Use the 80/20 Rule! - We Have!The principle states that there is an inherent imbalance between cause and effect, effort and reward, inputs and outputs, etc; and that imbalance tends to the ratio of 80:20 So, if we know which 20% of our work produces 80% of our income, we can do more of it and our income will increase proportionately! In the case of marketing, if we can identify which 20% of our budget spend produces 80% of the results, we could reduce our marketing budget accordingly and get the same results! The problem with marketing is a lack of feedback about specific elements of our marketing campaigns. We don't know if a customer is buying our product because of a recent advertising campaign, or because it is a 'family favourite'. In the case of the work that we, in the professional service industry, do; we have the opportunity to examine the profitability of each job done, whether for a fixed fee or on a time-charged basis. We can then see, which 20% of the work that we do brings in 80% of the profits, which jobs consistently result in a loss, and where the problems lay in work performance. The measurement of job profitability becomes an essential task so that management can take the required remedial action to positively affect future performance. You may have already seen that we have taken account of the 80/20 Principle [Pareto Hypothesis] in our approach to design.
T. Bookman
Limited - Company No. 4389244
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Designed through practical knowledge of time recording systems. A small, but essential part or your Management System. If you monitor the work that you do, then the question: "How well are we doing?" - can be answered precisely! Only when you answer the question: "Where are we performing badly?" - can you get constructive answers to the question: "How can we do better?" |
