Innovation: Core, Adjacent, Transformational

By brucelynn

July 6, 2012

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Harvard Business Review’s article (May 2012) by Bansi Nagji and Geoff Tuff entitled –“Managing your innovation portfolio” provides yet another perspective on the 70-20-10 Rule applied to Innovation. Referred to it by Ken Hudson’s ‘Speed Thinking’ blog on it “The 70, 20,10 rule of innovation” (which happened to have borrowed by original 70-20-10 pie chart graphic) also helpful since the HBR article is paywalled.

· 70% – Core: “Innovation efforts in the core (i.e. use existing products and assets to serve existing markets and customers).”

· 20% – Adjacent: “Innovation projects– expand from existing business into new to the company (i.e. add incremental products and assets and enter adjacent markets and serve adjacent customers e.g. Google Maps).”

· 10% Transformational – “Developing breakthroughs and inventing things for markets that don’t yet exist (i.e. develop new products and assets and create new markets and target new customer needs e.g. ipad).”

Applying 70-20-10 to Innovation has been discussed before in the context of Coca Cola (marketing) and Google (technology), but the Najgi and Tuff piece are aiming for a more generic model. They also provide a most curious inverse corollary…

“Yet here is the rub. In terms of innovation returns — the core generates 10%, the adjacent 20% and the transformational 70%.”

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