In the realm of business innovation, managing an innovation portfolio has evolved into a strategic imperative for organizations striving to stay ahead in a fast-paced, competitive market. This dynamic concept involves carefully curating a mix of incremental advancements, adjacent innovations, and transformative projects. While the 70:20:10 ratio prescribed by the Harvard Business Review in 2014 remains a pivotal guide, the specifics of how this framework is applied can significantly vary based on diverse factors, including industry landscapes, company objectives, and prevailing market conditions.

Embracing this model, forward-thinking companies have embraced an allocation strategy that channels resources towards three distinct categories. The lion’s share of the innovation budget, about 70%, is directed towards gradual enhancements. This commitment to incremental innovation facilitates continuous research, development, and refinement of existing products or services. It allows businesses to keep pace with evolving customer needs, ensuring ongoing competitiveness and relevance in the market.

The 20% allotted for adjacent offerings serves as a means of expanding the scope of a company’s offerings. It involves exploring variations or complementary products and services that align with a company’s core portfolio. By diversifying within the existing spectrum, businesses can capture additional market segments or cater to different needs, thus mitigating risk by leveraging pre-existing expertise and resources.

However, it is the 10% earmarked for revolutionary projects that often captures attention and sparks innovation. These initiatives concentrate on groundbreaking, transformative endeavors that have the potential to disrupt markets, redefine industries, or introduce entirely new paradigms. Such projects demand substantial resources and a high tolerance for risk since their outcomes are uncertain, yet if successful, they can be game-changers.

Successful management of innovation portfolios necessitates agility and adaptability within this model. Companies proficient in this aspect continuously reassess their allocations, pivot strategies when necessary, and remain vigilant to changing market dynamics and emerging trends. This adaptability ensures that the innovation portfolio remains aligned with the company’s overarching objectives and is responsive to the evolving demands of their customer base.

The role of technology in the evolution of innovation portfolios cannot be overstated. Technological advancements have significantly expedited the development process and reduced the cost of experimentation and failure. This reduction in cost has made it more feasible for companies to invest in high-risk, high-reward transformative projects, enabling innovation to flourish.

Moreover, the nature of innovation has transformed over time. It is no longer restricted to product development but extends to processes, business models, and even customer experiences. This expanded landscape of innovation opens up new opportunities for businesses to differentiate themselves in the market and create sustainable competitive advantages.

Furthermore, collaboration and strategic partnerships have become vital elements in shaping innovation portfolios. Companies are increasingly open to partnering with startups, academic institutions, or even their competitors to foster innovation. Such collaborations bring in diverse perspectives, accelerate ideation, and help share the risk associated with larger transformative projects.

In conclusion, the creation and management of an innovation portfolio demand a delicate equilibrium between gradual progression, strategic expansion, and audacious transformation. By embracing and customizing the 70:20:10 principle as a guiding framework, companies can effectively navigate the complex landscape of innovation. This approach fosters a culture that thrives on change, nurtures growth, and ensures long-term success in an increasingly competitive market.

The future of innovation portfolio management is expected to witness further evolution. With emerging technologies like artificial intelligence, machine learning, and the internet of things becoming more prominent, companies will need to adapt their portfolio strategies to leverage these technologies effectively. Additionally, the impact of societal changes, environmental concerns, and geopolitical shifts will likely necessitate a more holistic approach to innovation that not only drives profitability but also addresses broader social and environmental responsibilities.

Successful companies will continue to invest in innovation, recognizing it as the lifeblood of their sustained growth and relevance in a world where change is the only constant. They will remain agile, adaptive, and open to redefining their approaches, all in pursuit of the next groundbreaking innovation that will define the future of their industries.



70%: Gradual contributions

20%: Related products

10%: Projects aimed toward transformation