In 1906, an Italian sociologist, philosopher and economist, Vilfredo Pareto noticed that 20% of the peas that he had planted in his garden was giving 80% of the total production. Pareto studied further the 80/20 ratio, proving that in his country, Italy, 20% of the population possessed 80% of the total wealth and providing many other examples that confirmed the aforementioned principle.
Nowadays, the 80-20 rule indicates that 80% of the results are usually obtained by 20% of the effort or actions put by a person or a company. In other words, the 80-20 rule means that fewer factors (20%) are vital and many (80%) are trivial.
Maybe this reminds you of the famous ancient Greek saying “less is more”or “quality over quantity”. You are right, except in the case of the Pareto rule, this definition is quantified and helps us to improve our performance as an individual or as a business. So, what would you think if for example, 80% of your pharmacy revenue came from 20% of your customers? If 20% of your efforts yielded 80% of your turnover? If 20% of your staff is responsible for 80% of your dissatisfied customers?
A modern pharmacist must integrate modern management in his business. Your decisions about how to make good use of your employees’ time, about targeting to your important customers, rewarding the most productive employees or promoting specific products and brands are no longer taken by chance. You need to comprehend the investment-return relationship, to research what inputs are producing the best results, to be able to run marketing campaigns targeting the vital 20% of your clientele!
Of course, nothing should be taken at face value. Not be surprised if you find out that in your case the 80-20 can be expressed by 70-30 or even more extreme numbers. We are not talking about a rigid rule, but about an observation base that gives us a valuable tool: to understand where we should aim in each area of our responsibility: our staff, our products, our customers. We always have to focus on the significant 20% to make the most out of it. The Pareto principle contributes to working smart, efficiently and productively.
Τhe rule of 80-20 ensures the optimum exploitation of your pharmacy’s resources. You will probably wonder: Is it satisfying to stop at 80%? My answer is no! There is a 20% remaining, which will allow your pharmacy to stand out regarding to the competition. This critical size – 20% – will require 80% of your efforts. Pharmacy2020 pursue persistently the 100%, because that’s where the limit of every pharmacy is. Because, by pursuing the ideal, we conquer the feasible.
Sincerely,
George Pakertzoglou
Founder Ph2020 | Development Consultant
