In today’s competitive market, many brands must stay ahead of the curve by implementing an innovative business strategy that will enable them to succeed. Such is the case with Google. Eric Schmidt, who is its current president, stated that one of the strategies that have given them the best results in their growth and innovation is the 70/20/10 strategy.
But what is this strategy about?
1. This rule works as follows:
- 70% of the resources, time and money, go to the core of the business; that is, what brings the income to the company.
- 20% goes to joint projects, which do not necessarily have as their main objective to generate a return.
- The remaining 10% is allocated to experimental projects, some may be considered out of proportion, but could give the company a total transformation if carried out.
This idea is born from asymmetric marketing, which is based on experimenting through controlled risks, discovering alternatives to develop a business of accelerated results. Why? Because as we mentioned earlier, today's global competition forces companies and brands to find better routes for their businesses.
2. And now, how can you apply this strategy to your business model?
First of all, it is necessary to define which activities are those that are effectively profitable in the company or in the brand, that is, which ones contribute the income.
- After being clear about the previous point, it is to this nucleus that 70% of all the resources that your company has will be allocated: money, time, and work.
- For example, if what you offer is some kind of service, it is to this one that you will dedicate 70% of the time. If you sell a product, 70% of the time will be to sell and promote it.
- Indeed, it is not easy, but if from this concept attention is paid to all the details that have not been taken into account such as sending the company's newsletter or carefully reviewing the frequently asked questions section (F.A.Q), you will not get the precise data of the products that your customers are looking for or the concerns that may arise and your company does not get will achieve the desired growth.
- The 20% that we mention as projects that are not the most profitable, can not be left aside since they can contribute a lot to the brand: image, reinforce the voice of the business, reinforcement of the marrow of your company, etc., to these points 20% of the time, work and resources are dedicated.
What can you implement this 20% in?
- Virtual reality. This is an option to train your corporate and allow them to practice their skills and help them reinforce them to do their job with greater confidence.
- Social networks. These work perfectly to develop communication between employees and allow the exchange of ideas for future projects.
- eLearning. Unlike receiving direct training from an instructor, this tool is more efficient by representing economic savings for your company and the learning process is personalized, which motivates your team.
And the remaining 10% is to experiment, to play so to speak risking with innovative ideas that do not represent in real terms a loss, but an investment, probably in the long term. This risky 10% can grow and reach at some point 20% of the resources that are allocated for the projects and maybe they will become 70% of your business strategy.
To advance on the path of innovation it is essential to have this 20/10 to open the way to new ideas that can transform the business idea.
Here you can get more ideas to grow your business.
3. The strategy of Google
Following Google as our example, they have dedicated themselves to launching large numbers of proposals that did not come to be made but did not have losses, although they have also had winning bets such as their office suite on the web, which is approaching the core of their business.
Although, in theory, the strategy is easy to understand, the difficult thing is to take it into action; the dedication of 70% of the work and economic effort may not be the most fun part of the project in everyday life, but it can take you to the top.
You can get more ideas on this link.
4. A business strategy
To take into account:
The more effort you put in, the more profit can represent; companies that have implemented this rule or business model, come to surpass their competition obtaining a greater relationship between cost and profit.
5. Businesses in which this strategy has worked
The companies that have benefited the most from implementing this system are:
- Health Care
- Durable products
Given this panorama, companies need to reinvent their operating model and invest in opportunities that generate an opportunity for innovation.
Are you ready to give an innovative turn to your company by applying the successful 70/20/10 rule? We can't wait to hear your answer.
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