Traditional 80/20 analysis told an appliance company to focus on its top customers and top products. Sensible advice. The 80/20 Matrix told them the truth: Quadrant 1 was generating 150% of profits, Quadrant 2 was adding 40%, and Quadrants 3 and 4 were each destroying 45%. The company was creating 190% of potential profits and […] Read More

A shopping cart company surveyed retail shoppers and discovered that 82% had left a store without purchasing because of bad cart wheels, 97% had spent less money at least once due to the same problem, and 41% had reduced spending because of rusty carts. The B2B customer — the retailer — had never surfaced this. […] Read More

PROS pricing research confirmed that a 1% improvement in price delivers an 11% increase in operating profits. A 5% price improvement on 30% gross margins increases profit by 50%. Most executives spend months on cost-reduction initiatives chasing a 2% improvement while ignoring pricing opportunities worth five to ten times that amount — and they do […] Read More

Most executives understand addition. Almost none apply multiplication to their funnels. A 20% improvement at one stage gives you 20% growth. A 20% improvement at each of five stages gives you 149% growth — because 1.2 × 1.2 × 1.2 × 1.2 × 1.2 equals 2.49, not 2.00. That gap — the difference between 100% […] Read More

Across every manufacturing context I have personally led — from a $42M industrial scales business to a $900M refrigeration platform — the same distribution holds without exception: 20% of customer-product combinations generate 140 to 150% of total profit, and the bottom 80% actively destroys 20 to 50% of what the top tier built. The income […] Read More

Harvard professors Kaplan and Narayanan documented what I’ve seen in every transformation I’ve ever led: your top 20% of customer-product combinations generate 150 to 300% of your total profits. That’s not a typo. Everything else combined actively destroys the surplus. MIT research confirmed companies can release up to 38% of avoidable costs simply by realigning […] Read More

MIT documented it. McKinsey confirmed it. HBR published it. And yet most manufacturing organizations are still spreading overhead costs uniformly across their portfolios as if every SKU costs the same to produce, store, administer, and quality-control. They don’t. Complexity costs grow exponentially with each new variant added — and traditional accounting makes every one of […] Read More

The research is in, and it’s damning. McKinsey found that complexity costs can silently erase up to 7% of your margins while your accounting system reports nothing wrong. MIT studied a healthcare company and found financial justification for cutting 27% of their product portfolio — translating to $75 million in savings over five years. Your […] Read More

Here’s the dirty secret nobody in your boardroom will say out loud: your top 20% of customer-product combinations are generating 140% of your profits — and everything else is quietly eating the difference. I’ve seen this exact pattern at Whirlpool, ITW, Berkshire, and JBT Marel. Your portfolio isn’t a strategy — it’s an apology to […] Read More