I’m sure you’re heard of the 80/20 rule where 20% of your products , services or people deliver 80% of your revenue, profit and results
But there’s a less well-known paradigm which is the 20/120 rule which shows:
In terms of product
- Your top 20% of products could be generating an impressive 120% of your profit.
- Your bottom 20% of products might be losing you 20% of that profit.
In terms of people
- Your top 20% are your high performers who consistently overachieve. You’ll often find these people doing 120% of quota etc.
- Your middle 60% are somewhat mediocre. They have potential but may lack coaching, systems, or accountability.
- The bottom 20% often need to be retrained, repositioned, or exited. They might not be the right fit.
In other words, your weakest performers aren't just underperforming; they're actively costing you money and eating into your best results.
The success of a business is not about the people - it’s about the right people
Once you've identified the underperforming 20%, you have critical choices to make:
- For Products and Services: redesign, repackage, or bundle with successful offerings -or cut
For Employees: Is underperformance due to skills gaps or being in the wrong role. If they have the right attitude, targeted training or repositioning within the company can help them thrive. But if they're fundamentally unsuitable, cut!!!
Cut
Cutting may free up valuable resources, time, money, and headache enabling you to invest in areas that truly create a leaner, more efficient, and more profitable organization.
❓Are you measuring your performance to determine what or who works or doesn’t ?
❓ Do you have KPIs that measure performance and hold people or products accountable? (including for yourself as the owner)
Thanks Rashid Kotwal for the insight http://www.revealedresources.com/
