The 70-20-10 innovation rule is a framework used by organizations to allocate resources for innovation. It suggests dividing resources into three categories: 70% for core business activities, 20% for adjacent or complementary business activities, and 10% for entirely new or experimental business activities. The benefits of using this rule can include:
- Focusing on Core Business: By allocating 70% of resources to core business activities, organizations can ensure that they are maintaining their current operations and sustaining their current competitive advantage.
- Expanding the Business: By allocating 20% of resources to adjacent or complementary business activities, organizations can explore new opportunities that are related to their core business and expand their offerings.
- Exploring New Possibilities: By allocating 10% of resources to entirely new or experimental business activities, organizations can explore new possibilities and take risks to innovate and stay ahead of the competition.
- Prioritizing Innovation: The 70-20-10 rule can help organizations prioritize innovation as an essential part of their business strategy.
- Encouraging Creativity: The framework encourages creativity and fosters a culture of innovation, as employees are encouraged to explore new ideas and take risks.
- Balancing Risk and Reward: By allocating resources across three categories, organizations can balance risk and reward and ensure they are not putting all their resources into one area.
- Promoting Agility: The framework promotes agility by allowing organizations to quickly adapt to changes in the market and customer needs.
- Achieving Long-term Success: The 70-20-10 rule can help organizations achieve long-term success by fostering a culture of innovation and continuous improvement.
- Aligning Resources: The framework can help organizations align their resources and investments with their business strategy, ensuring that they are investing in the areas that will have the most significant impact on their business.
- Supporting Employee Development: The 70-20-10 rule can support employee development by providing opportunities for employees to work on new and innovative projects that challenge their skills and help them grow professionally.
- Driving Competitive Advantage: By investing in innovation, organizations can drive competitive advantage by developing new products, services, or business models that differentiate them from their competitors.
- Encouraging Customer Focus: The framework encourages a customer-centric approach to innovation by focusing on understanding customer needs and developing solutions that address those needs.
- Building a Sustainable Business: The 70-20-10 rule can help organizations build a sustainable business by investing in innovation that supports long-term growth and profitability.
- Enhancing Organizational Learning: The framework can enhance organizational learning by encouraging experimentation and learning from both successes and failures.
In summary, the 70-20-10 innovation rule can provide a clear and structured approach to innovation that promotes creativity, agility, and long-term success for organizations.