A ladder for successful innovation : Sutherland's Law

In the last month, two marketing people have quoted me the 70:20:10 principle of budget allocation.

And I've always liked a nice simple device like this whether the classic Pareto's 80:20 law or the more recent 89:10:1 Web 2.0 rule which I think I got from Antony Mayfield.

Using this new idea, the rule of thumb is that when allocating budgets in  uncertain times you should spend 70% replicating stuff that always works, 10% on trying completely new stuff, never  tried before and the balance on the new stuff that worked well last year (in the 10% pot) that  you can roll out more aggressively this year.

This way you get a "ladder for successful innovation" as Rory Sutherland calls it.

Indeed it seems that this new meme originated from the Ogilvy Wizard, and as I have taken to frequently using this new thought could I suggest that we christen the new law Sutherland's Law? (don't check out Wikipedia's entry just yet as it needs a bit of polishing).

It does seem like quite a good way of positioning (OK, selling) higher risk ideas to clients much as Independend Financial Advisers talk about building a Risk Pyramid of investments for your pensions (a base of solid cash and bonds at the bottom,  a few high risk equities at the top and a bunch of blue chip equities in the middle).  I am trying it on with (as opposed to just "trying it on" with) a Corporate Banking client of mine soon.

And as I can't resist a bit of semiotic gilding,  I have colour coded the bottom layer BLUE (for solid, reliable, but maybe a bit boring), the middle layer SILVER (for a bit more quality and attention getting) and GOLD for the top layer (potentially the most valuable but could be fool's gold?).

With any luck we will soon have all our clients saying "great presentation but I think we need some more gold ideas too". And that would be nice.

For those of you who are more visually minded, imagine a diagram about here showing the above.

Oh alright, I'll make one for you :

Comments

[Lenster]

I'm liking the Sutherland Law. Not surprising coming from him, it used to be a Direct Marketing mantra that c. 80% should be devoted to bringing home the bacon with up to 20% being spent on Test. A simple way of minimising risk exposure I guess.
Good chart action BTW.