Innovate or Die: Why Google’s 80/20 Rule is a Red Herring

Dating back at least to 2007, Google’s 80/20 policy has famously granted employees 20 percent time for creative side projects – and has been widely emulated by companies (such as Hootsuite) as a best practice for unlocking enterprise-wide creativity and innovation.

Yet now, suddenly, Google may be pulling the plug. Which begs the question: Have we been wrong all along? Is the 80/20 Rule, in fact, a bad idea?

There are two answers: YES and NO. Understanding the interplay between them is critical to understanding how innovation actually happens within large companies.
In one respect, the 80/20 Rule is very obviously a good idea. Innovation is a very difficult rhythm to scale across a large, distributed organization … in which the largest barriers, by far, are time and attention. Because we are all so busy executing – meeting deadlines, delivering revenue, pleasing the boss – it’s not impossible to find time for anything new, unproven or risky. The 80/20 Rule is a clever policy lever (among many) for sanctioning “time for innovation.”

Yet, it’s a VERY BAD idea to use the 80/20 Rule as an innovation panacea. Even the most daring and creative employees struggle to trust that Big Brother is acting in good faith because in most companies, the very notion of the 80/20 time violates our normal expectations of corporate life. As Peter Drucker [allegedly] quipped, culture eats strategy for breakfast.

The most enlightened and well-managed companies (e.g. Google) sometimes avoid this culture trap. But that’s when even more deeply rooted problems arise.

Innovative ideas are by definition risky, uncertain or both – which operational leaders will correctly recognize as threats to profitability and efficiency. Their natural (correct) reaction is to shelve such ideas until they make sense to pursue. Usually that point never quite materializes …until it’s too late.

Furthermore, to see the light of day innovations typically require at least some degree of resources (funding, staffing, specific expertise), and both operational and functional support and buy-in. As a result, along the path from initial concept to real-world innovation any of a dozen (or more!) influential executives can stop the train in its tracks.

This means the vast majority of innovative ideas never have a fighting chance. As employees hear countless variations of “great idea … but not now” they become increasingly jaded. This leads to one of two outcomes: they “give up” and bury their creativity, or they take their passion underground and launch a competing startup.

Innovation never happens in a vacuum. Which is why the focus on the 80/20 Rule is a red herring. It’s merely the iceberg-tip of a much larger, and more fundamental, set of issues plaguing modern corporations.

Fortunately, there is a silver lining. Companies such as Xerox, Chubb, and Whirlpool have learned how to create sustainable innovation discipline across the enterprise. They have embraced innovation as a company-wide discipline, making innovation part of everyone’s job.

There are no silver bullets – whether the 80/20 Rule or anything else. In creating a sustainable, enterprise-wide innovation discipline the road is long (at least 5 years, if not more) and fraught with difficulties and complications.

But the alternatives – irrelevance, bankruptcy, and oblivion – are much scarier. The reality is summed up in a meme that has begun to surface: “Innovate … or die.” Here’s hoping we all choose the former.