In 2005, Eric Schmidt articulated a model for innovation at Google which advocated that employees should utilise their time:

• 70% dedicated to core business tasks
• 20% to projects related to the core business
• 10% dedicated to projects unrelated to the core business

Last year, when Coca Cola announced their new strategy to shift focus from 'creative excellence' to 'content excellence' (something of a marker in the inexorable trend toward brands-as-content-producers, and explained in two rather jargon-filled short films), they talked about applying a 70/20/10 investment principle to content creation:

• 70% of the content should be low risk, bread and butter marketing
• 20% should innovate off what works
• 10% should be high risk ideas that will be tomorrow's 70% or 20%

In the same year as Schmidt was espousing the Google approach to innovation, McKinsey published a report (`Boosting Returns on Marketing Investment’) in which they recommended that in the face of declining effectiveness and trust in mass advertising and the increasing fragmentation of media, brands spend 80% of their budget on banker strategies and tactics, and 20% on learning through well structured tests. It's a useful approach, and one that I've advocated before now as a pragmatic way to enable a greater experimentation with under-pressure budgets. But reading around those different approaches makes me realise that 70/20/10 is a much more useful contemporary model, not only to learning, and innovation, and content, but to something of fundamental importance in marketing: the allocation of budgets.

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Original Post: http://neilperkin.typepad.com/only_dead_fish/2012/02/the-70-20-10-model.html