Confederate general Nathan Bedford Forrest (1821-1877) was not a great man. His actions in combat were sometimes that of a terrorist, as when he massacred hundreds of Union troops at the Battle of Fort Pillow (Tennessee, April 12, 1864) after they had surrendered. He doesn’t look any better when he was elected the first Grand Wizard of the KKK in 1867, after the Civil War. In fact, he was a bad man. But he did compile a compelling record of remarkable victories, as when he defeated a force more than twice the size of his (8,500 vs 3,500) at the Battle of Brice’s Cross Roads (Mississippi, June 10, 1864). Perhaps the greatest praise for Forrest came from Ulysses S. Grant’s righthand man, General William Tecumseh Sherman, who growled, “that devil Forrest must be hunted down and killed if it costs ten thousand lives and bankrupts the federal treasury.”

Generations of military historians have sought to dissect Forrest’s genius for tactics, but none ever did this very convincingly. Maybe they should just have reread his own two most famous utterances on tactics:

       1. “War means fighting, and fighting means killing.”

       2. “Get there fustest with the mostest.” (I admit he might have actually said “Get there first with the most men.” Same tactical advice. Just doesn’t sound nearly as cool.)

In business, “simplification” is a process that identifies non-performing or low-performing products or markets and reallocates resources to more productive product lines or markets. A great deal of time, effort, and agony may be devoted to structuring the simplification. Often, however, a business seeks to simplify because it is losing money. Time is not on the side of such a business. That is when 80/20 quad-based simplification may be applied not with the leisurely finesse of an interior designer rearranging a room but with the brute force of “that devil Forrest” clearing out a battlefield.

The Pareto Principle—80/20—is an observed law of nature holding that 80 percent of activity, work, and resources produces just 20 percent of productive results. Looked at through the other end of the telescope, we see that our efforts produce both the trivial many as well as the critical few.

Fortunately, in business, you can use this 80/20 law to alter the 80/20 outcome in favor of greater performance and profit. You can use 80/20 to segment your winners and losers. Compile your data and segment the intersection of customers and products into four quads:

The percentages indicated in this sample segmented quad make two things obvious:

•           Quad 1: A customers buying A products account for about 64 percent of sales and 200 percent of total profit. Action? Grow.
•           Quad 4: B customers buying B products account for just 4 percent of sales and lose 120 percent of profit. Action? Simplify.

Both Quads 1 and 4 demand immediate attention. If time were on the company’s side, a strategic simplification of Quad 4 could be undertaken. The “Magnificent 7” menu of tactics could be deployed:

1. Guns N‘ Roses: Slash it—get rid of it.
2. The Pirates of the Caribbean Price: Price up to profitability.
3. It’s a Date: Make specials or low-volume runs on announced dates only.
4. Everybody into the Pool: Consolidate sufficient orders to make a special order or a low-volume order big enough to run.
5. One Size Fits All: Keep the product in the line but reduce the number of size offerings.
6. Kitchen Sink: Include all components in the offering. Make the customer buy it all and throw away what he doesn’t need.
7. Combo Platter: Combine similar products into one offer. Minimize ways to satisfy each application.

But the Quad 4 hemorrhage represented in the example above calls for brute force administered with “fustest with mostest” speed. Personnel and effort need to be moved from Quad 4 to Quad 1, which means that the least productive B products will be dropped, those showing some life must be priced up, and all sales must be handled with minimal human service. Expect to shed products and customers from this quad. And be thankful for it, since the customers and products here are starving Quad 1 of the resources it needs. To grow Quad 1, you must simplify Quad 4. In this example, these two actions in these two quads are of existential urgency.

After Quads 1 and 4 have been attended to, take the time and effort to look more strategically at Quads 2 and 3. Quad 2, the “Necessary Evil,” cries out for neither growth nor simplification but rationalization. Quad 2 consists of A customers buying B products. Instead of wielding a Forrest’s cavalry saber on either customers or products, use a scalpel to make pricing decisions aimed at moving as many B products as possible into the A category. As for Quad 3, consider it territory ripe for self-service selling as well as “inside”—that is, remote or virtual—sales and for house accounts. For both Quads 3 and 4, the objective is to move as many resources from both of them to Quad 1.  Quad 1 is all about growth. Quad 4 is the enemy of growth and needs to be simplified—if necessary, simplified out of existence. After positioning Quad 1 for growth and Quad 4 for simplification, Quads 2 and 3 are to be rationalized, with the objective of moving as many products and customers from B to A status as you can.

And now you know what to do.