Testing the waters with transformational innovation has several benefits. It allows companies to explore new technologies and markets, potentially leading to significant growth and competitive advantage. It also helps to diversify the company's portfolio, reducing reliance on existing products or services. Furthermore, it can stimulate creativity and innovation within the company, encouraging employees to think outside the box and come up with novel solutions.
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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)