The allocation of resources can significantly impact a company's innovation strategy. By using a strategic allocation, such as the 70-20-10 rule, a company can ensure that it is investing in its core technologies while also exploring new, potentially transformative technologies. This balance allows for steady growth and the potential for breakthroughs. For example, Meta's allocation of $10 billion to VR and the metaverse represents a significant investment in potentially transformative technology.
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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)