The 80/20/20 Principle was introduced to me earlier this year by the fantastic CEO of Triodent, a small dental supplies manufacturer from New Zealand. An exuberant character, he spoke about how the 80/20/20 Principle is the key in allowing his company to be continuously innovative and compete against major market players.
The principle is simple, a new product idea is formed and it is made a marketable reality as quickly as possible. Well to 80% of its finished form anyway. But for 20% of the total development cost and in 20% of the time it will take to have the product in its final form. Sound confusing? It really isn’t…
You see the main advantage us SME’s have compared to our behemoth counterparts is the ability to move quickly. While the multi-nationals of this world have new product development procedures to follow, we can dream up a new product and have it in the market in a fraction of the time. Sure it may not be in its finalised, refined form but what is the point in committing time and resources to an innovative new product when you’re not sure if your market is even interested in it?
So give the 80/20/20 Principle a go in your business. Make the new idea a reality, throw it off the cliff and see how it flies. Get feedback, refine it based on the response you get and maximise your resources to get the best bang for your buck!