Pareto's and Brooke's Laws

This just out from Direct Selling News.   I thought you would enjoy it. Click here to check it out.

On other news, although retiring Savvy is sad for sure, everyone at Young Living including all of us will benefit greatly from a focus on data driven winners in our product line.

We have all heard of Pareto’s Law whereby 80% of the work or sales or productivity is done by 20% of the people.  Brooke’s Law is that 90% of our sales are made up of 10% of our products.  (Ok, I just made that up).   But it is true.  

The challenge is a company never knows which products will end up in the top 10% so many products may be launched in order to find the winners.

Sound familiar?  Like many people will be enrolled before you find a leader?   That is also a Brooke rule, but it is more like 95/5%.

Unproductive distributors sort themselves out and do not necessarily become a burden on the system, but products do.  I can only guess but I imagine it costs Young Living between $250,000 and $1M in working capital to maintain any product.   Multiply that times 500 products that are not data winners and you have perhaps $100 Million dollars.

I know the value of a product is more than its data.  Some products profoundly heal, some products are spiritual, and some are just Gary’s soul products.  Those make sense to keep because they are an integral part of the culture. But the rest? Severe baggage.

There are better places to invest 100 million than in pallets of shaving cream, etc. 

Here are some places that would skyrocket our growth:

• Video education, inspiration, and enrollment tools. What if we had a million-dollar award winning documentary on the Young Livingstory?  What if we had a million-dollar 3-minute sizzle video that people went nuts for?  What if we had a million-dollar 30 minute Young Living Product and Income Option presentation that enrolled new brand partners on the spot?  Get the picture? (None of those cost $1M but they do require creative power, focus and capital)

• What if we have the most cutting-edge online ordering and customer service platform?

• What if we had the best and brightest staff always in every position?

• What if we had a massive PR department that provided us with mind blowing media, we could use to inspire our network?

• What if we had more farms?  What if we had better farm experiences (since that is one of our superpowers)

• What if we had more potency, more clinical studies and more profound education?

• What if every item was “in stock” all the time?

There are ways we can 10X our growth that are far superior to just adding more products.  100’s of products is excess baggage.  They complicate our whole enrollment, ordering, and education process. 

The low-level ones need to be retired, gracefully, with respect but retired to free up bandwidth for more winners and more tools that support growth.

I applaud Mary, Ben, and Prasaad’s wisdom and courage to move in this direction.  Yes, there is short term pain.  Savvy is painful.  But at 1.4% of sales, it is tens of millions in baggage.

Let’s support Young Living to retrofit Young Living for lean and screaming to we can build the teams and customer base to get us to 10 Billion.  

Wouldn’t you be happy with 5 times your current income?

Your comments are encouraged, contrarian or not