Innovation Rule Template - Allocation Strategy for Success

70-20-10 Innovation Rule Template The 70-20-10 Innovation 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. 70% Core 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. 20% Adjacent Innovation: 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. 10% Disruptive Innovation: 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or methods of performing a service might transform the industry as it currently stands existing methods become outdated and redundant.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. 1 Want more best practices? Visit Praxie.com

70-20-10 Innovation Rule Enter your own percentages of resource allocation and focus on each type of innovation. List examples of your innovations in each category. Identify ways to create a more balanced portfolio if needed. Long term, higher investment & risk Short term, lower investment & risk Core Innovation Small changes in processes, products, services, etc. (continuous improvement) Adjacent Innovation New markets, product categories, and other major advancements to the business Disruptive Innovation Breakthroughs that change the game (new business models, blue oceans, etc.) Goal 70% 20% 10% Actual Enter your % Enter your % Enter your % Enter examples of your Core Innovations here Enter examples of your Adjacent Innovations here Enter examples of your Disruptive Innovations here Examples 2 Want more best practices? Visit Praxie.com

Actions Enter actions to create a more balanced portfolio so that your own investments and resource allocation are focused on 70-20-10 Innovation Rule. Actions Owner Due Date Enter action here Enter owner Enter due date 3 Want more best practices? Visit Praxie.com

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