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The challenges of implementing the 70-20-10 rule in a business include determining the right allocation of resources, managing risk, and ensuring that the business can sustain the investment in transformational innovation. It can be difficult to decide what constitutes core, adjacent, and transformational technologies, and there may be disagreements within the business about these definitions. Additionally, investing in transformational innovation can be risky, as it involves exploring unproven technologies that may not yield a return on investment. Finally, the business must be able to sustain the financial commitment to this rule, which may be challenging if there are fluctuations in revenue or other financial pressures.
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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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