While Eric Schmidt was CEO at Google he highlighted the importance of the 70-20-10 model to inspire and nurture creativity and innovation amongst employees. The model emphasises the proportional of time employees should spend on different activities:
- 70% of time on the core business
- 20% of time on related projects
- 10% of time on unrelated projects
Eric Schmidt is also quoted as saying that “virtually everything new seems to come from the 20 percent of their time engineers here are expected to spend on side projects. They certainly don’t come out of the management team.”
This relates back to the earlier philosophy from 3M of allowing employees to spend 15% of the their time working on personal projects and the consequential invention of the post-it note.
While I was at Apple I was also given permission to work on projects not related to my main area of responsibility. I was formally part of the speech recognition group (focusing on Chinese and Japanese languages), but in my spare 15% of time (and in the evenings) I worked on using speech recognition technology ideas to solve handwriting recognition problems. Luckily I had a breakthrough with my work and consequently got transferred to lead the handwriting recognition team. This resulted in the work being launched as part of Apple’s Advanced Chinese Input Suite product in 1996 and the technology being licensed to several other companies.
I think this balance or ratio suggested by Eric Schmidt matches well with Dan Pink’s ideas of Drive and Intrinsic Motivation and Ken Robinson’s work on creativity. The ratio gives employees the permission and freedom to explore new ideas, but also to make sure they deliver on core areas of work as well.
The model proposed by Schmidt also goes some way to addressing the issue of The Innovator’s Dilemma highlighted by Clayton Christensen where his research found how new technologies and/or business models can cause great firms to fail.
As I mentioned in a previous article, Gordon Macrae from Incub and Gripple highlighted how their company’s strategy is to generate 25% of their turnover from products launched within the last three years. That strategy demands creativity inside the organization and avoids complacency creeping in. Again the company follows a similar model to the 70-20-10 model proposed by Schmidt.
For companies looking to encourage more creativity inside their own organisation, but fearful of the consequences, the 70-20-10 model is a good structure to follow. Even if just 10% of time is given to employees to pursue personal projects, the permission and freedom that gives to employees can be incredibly powerful. There is plenty of evidence to show the benefits of taking such an approach.