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The 70, 20 ,10 Approach to Innovation

When I talk to companies about digital culture, agility and innovation I often end up talking about organisational focus and particularly the challenge of embedding continuous innovation. Joel Gascoigne, the co-founder of Buffer has a great post on just this (and I've written before about Buffer as an exemplar of organisational culture). He references this conversation between Reid Hoffman (LinkedIn) and Matt Mullenweg in which Hoffman talks about their approach of 'core', 'expand' and 'venture' projects as the 3 key areas of activity which they try to balance. 

Buffer, says Gascoigne, have adopted this approach (calling it 'core', 'expansion' and 'labs') as a way to stay innovative as they scale and mature as a business. For them, 'Core' means 'to work on what Buffer already is', 'Expansion' is the term for 'any projects worked on which are logical expansions of what the product already is', and 'Labs' is higher risk stuff that they 'want to just try and see what happens'. Working continuously on all three enables them to focus not just on incremental improvement and expansion but also breakthrough innovation. Gascoigne believes the ratio is around 50:30:20 for them, but I also like the 70:20:10 approach. The latter is championed by Intuit (the financial software business that thinks of itself as a '30 year-old start-up') who explain this model (sourced with thanks from Martin Bailie) in these terms:


The 70:20:10 model is also akin to three horizons thinking, which Tim Kastelle has a good write up of. One reason I particularly like 70:20:10 is because it is perhaps a more palatable way for larger organisations to embed the pursuit of breakthrough ideas. With the pressure of short-term targets and stretched resourcing this is not always easy but in the current environment, can companies really afford not to do it?

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