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The 70-20-10 rule aligns with Clayton Christensen's ideas on innovation in the sense that it encourages a balanced approach to investment in innovation. Christensen's theory of disruptive innovation suggests that companies should not only focus on improving existing technologies (core) but also invest in developing new ones (transformational). The 70-20-10 rule suggests a similar approach, with 70% of resources dedicated to core technologies, 20% to adjacent, and 10% to transformational innovation.
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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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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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