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The 70-20-10 rule can be applied in different industries by allocating resources to different areas of innovation. 70% of resources should be dedicated to core technologies or operations that are already established and generate the most revenue. 20% should be allocated to adjacent areas, which are new areas that are related to the core operations. The remaining 10% should be dedicated to transformational innovation, which involves exploring completely new areas that could potentially bring about significant growth in the future. This allocation allows for a balance between maintaining current operations and exploring new opportunities.
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How do you know how much to invest in each category? Use the 70-20-10 rule. A safe allocation dedicates 70% of resources to core technologies, 20% to adjacent, and 10% to transformational innovation to test the waters. Think about Meta and their $10 billion allocation to VR and the metaverse through metaverse labs. With $71 billion in expenses in 2021, that accounts for about a 14% allocation. (Slide 12)
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Why do so many perfectly managed companies fail? Inspired by the seminal work of author Clayton Christensen, this deck provides the solutions to the “...
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