Core Business, Related Projects and New Business
Microsoft isn’t the only technology megalith which uses the 70-20-10 rule. Rival Google also uses it to describe the allocation of their investment in innovation. CNN Money explored the concept in its interview with CEO Eric Schmidt called ‘The 70 Percent Solution’ (thank Richard).
“Spend 70 percent of your time on the core business, 20 percent on related projects, and 10 percent on unrelated new businesses”
“Does Google have some kind of grand strategic plan for the new products it creates? Virtually everything new seems to come from the 20 percent of their time engineers here are expected to spend on side projects. They certainly don’t come out of the management team. ..What do you do with your 20 percent time? Well, 20 percent time applies to the technical staff. It does not apply to sales or management. Here’s how it works for management: We spend 70 percent of our time on core search and ads. We spend 20 percent on adjacent businesses, ones related to the core businesses in some interesting way. Examples of that would be Google News, Google Earth, and Google Local. And then 10 percent of our time should be on things that are truly new. An example there would be the Wi-Fi initiative–which I haven’t kept up with myself. God knows what they’ve done in the last week. I’ve been too busy on core search and ads. “
The article goes into good depth about how the rule is applied, measured, managed and even how it applies to the founders Larry and Sergey.