What is a 70-20-10 Rule, and what are best practices, tools and online templates for teams and organizations?
Definition of 70-20-10 Rule
The 70-20-10 Rule is a strategy for determining how to allocate time and resources in order to make a successful innovation. Generally, the rule helps organizational stakeholders determine if they should make high risk/high reward innovations or improve upon existing products or services. The basic idea behind the rule is that 70% of stakeholder time and organizational resources for innovation projects should be spent on core business, 20% on related projects to the core business and 10% of the time to projects unrelated to the core business but that can drive the organization forward. This rule can also be applied to budgeting.
Description of 70-20-10 Rule
The basic premise of the 70-20-10 Rule is that if the organizational stakeholders consistently makes small improvements to their existing line or enters into new markets, they will sustain the organization without ever evolving it to remain competitive with changing times. The allocation for time and resources indicated in the rule are really a suggestion and should not be rigidly adhered to. However, this framework has been proven helpful for successful innovation.
This section of rule stipulates that 70% of the organization’s core time and resources should be spent
on bettering current products or services that have already been established to be well suited for furthering the organization’s core purpose. Said differently 70% of the resources should be used to improve or make more accessible things that have been proven to work well in the past. Core innovations should be well-integrated into the existing business model.
This portion of the rule suggests that 20% of an organization’s time and resources should be spent
producing innovations that are slightly adjacent to their core mission. For example, new or different markets could be explored or time and resources could be expended to develop products or services that are outside of the realm of what the company typically produces. Because these actions, products or services deviate from the norm, they are a riskier innovation with more potential to drive the company forward. However, less time and energy is devoted to them.
The final portion of the rule proposes that 10% of the organizational stakeholder’s time and
resources should be allocated to breakthroughs that do not yet exist in the market. These innovations are often the riskiest because it unknown how the product or service will be received. However, they have the potential to bring high reward, as new technologies or methods of performing a service might transform the industry as it currently stands–existing methods become outdated and redundant. These innovations should be created separately from the core business.
Regardless of how the time and resources are allocated, successful core, adjacent and disruptive innovations requires able talent with diverse backgrounds. Further, core and adjacent innovations might progress more linearly whereas disruptive innovations might go through several non-linear stages as it is difficult to come up with a simple product for creating something that does not yet exist. Thus, it is critical to ensure the correct performance indicators are used for each type of innovation.
Tools & Templates
The tools managers can use to guide their employees through the steps for the 70-20-10 Rule are often communicated in presentations, spreadsheets, and other strategic documents.
upBOARD's Online Brainstorming Tools & Templates
Unlike most traditional 70-20-10 Rule processes, upBOARD’s online 70-20-10 Rule tools allow any team or organization to instantly begin working with our web templates and input forms. Our digital platform goes far beyond other software tools by including progress dashboards, data integration from existing documents or other SaaS software, elegant intuitive designs, and full access on any desktop or mobile device.
Learn more about upBOARD’s library of other innovation management online best practice tools and templates, including:
70-20-10 Rule, Agile Innovation Process, Brainstorming, Business Case Development, Business Model Canvas, Concept Development, Concept Screening, Concept Testing, Context Canvas, Crossing the Chasm, Crowdsourcing, Customer Empathy Map, Customer Problem Statements, Design Thinking, Disruptive Innovation, Empathy Interviews, Ethnographic Research, Experiment Canvas, Innovation Funnel Management Process, Innovation Horizons Model, Innovation Matrix, Innovation Roadmap, Jobs to be Done, Lean Startup, Listening Hats, Minimum Viable Product, Open Innovation Process, Outcome Driven Innovation, Painstorming, Phases & Gates, Rapid Prototyping, Saturate and Group, SCAMPER, S-Curve Mapping, Stage Gate Process, Startup Innovation Management, Technology Life Cycle, Technology Scouting, Teece’s Win-Lose Innovation Model, Value Proposition Canvas and White Space Innovation.