70-20-10 Innovation Framework

Diagram of the 70–20–10 Innovation Framework showing three investment categories: Core (70%), Adjacent (20%), and Transformational (10%). Each category lists key characteristics such as optimization, expansion, and high-risk innovation. The bottom row provides examples including feature optimizations, cost reduction, new product variations, service add-ons, new business models, emerging tech prototypes, and moonshot ideas.
The 70-20-10 framework primarily addresses strategic friction by providing a structured approach to allocating resources for innovation. It helps organizations balance exploration (new ideas) with exploitation (refining existing offerings) and risk management, which are core strategic decisions.

The 70-20-10 Innovation Framework is a strategic tool used by organizations to balance their investment across core, adjacent, and transformational initiatives. It suggests allocating 70% of resources to core business activities, 20% to adjacent innovations, and 10% to transformational efforts. This distribution helps companies maintain competitiveness while also investing in future growth and innovation.

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70-20-10 Innovation Framework
Measure my
Strategic
Friction

Steps / Detailed Description

  • Identify core, adjacent, and transformational projects within your organization.
  • Allocate resources according to the 70-20-10 rule: 70% to core, 20% to adjacent, 10% to transformational.
  • Implement projects while monitoring progress and adjusting allocations as needed.
  • Measure the impact of each type of project on overall business performance.
  • Refine and iterate the innovation strategy based on feedback and results.

Best Practices

  • Regularly review and adjust the resource allocation
  • Ensure clear definitions and criteria for categorizing projects
  • Foster a culture that supports all types of innovation

Pros

  • Encourages a balanced approach to innovation
  • Reduces risk by diversifying investment
  • Promotes long-term sustainability and growth

Cons

  • Can be challenging to correctly categorize projects
  • May lead to underfunding transformative ideas
  • Requires constant adjustment and monitoring

When to Use

  • In companies seeking balanced growth
  • When diversifying product or service offerings

When Not to Use

  • In startups or companies with limited resources
  • When immediate returns are a priority over long-term innovation

Related Frameworks

Core-Adjacent-Transformational (CAT)
Core/Edge Innovation Framework
Disruptive Innovation Theory Framework
Fuzzy Front End (FFE)
HYPE Innovation Framework

Categories

Ideation
Innovation

Lifecycle

Not tied to a specific lifecycle stage

Scope

Organization

Maturity Level

Intermediate

Time to Implement

3–6 Months

Copyright Information

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