If you’re familiar with Google, you may have heard of the 20% rule they’ve followed since their early days as a startup. The simple rule says that every key employee needs to spend 20% of their time on projects that have no immediately visible payback for the company. While 20% may seem like a lot, this rule led to the development of Gmail, Adsense and other products that made Google the profitable giant it is today. Google executives credit this approach with much of their strategic growth over the years, and they consider it an important part of their culture.
Activities that meet the 20% Rule criteria are not just about product development. Outside reading, professional development and developing networks are often seen in this category. Basically, anything you see as beneficial, but not immediately so, could be pursued under this rule.
Why would this rule help a company? To begin with, it corresponds with attention to truly strategic initiatives. As I’ve said many times, really strategic things are very rarely urgent, and they often don’t lead to an immediate payoff in profit. The 20% rule gives employees permission to take a break from the “must do” pressures of the day to give time and thought to things that will add to your strategic growth and competitive advantages in the future.
A second benefit of the 20% rule is that it opens a space where employees can think about the future. If you aren’t focused on urgent things, the important things often come into much sharper focus. This can be an important way to encourage strategic alignment with employees. This mental orientation can be very useful in encouraging strategic growth.
It would be a mistake to miss pointing out that this rule also leads to a more capable workforce with better morale. If you function in a heavily information-oriented industry, the value of these things are quite high. Your strategic competencies reside in your people, and happy, growing employees are definitely more valuable.
Finally, rotating your attention away from your normal routine has been shown to be a great way to enhance both productivity and creativity. This means that – even if their 20% efforts never pay off – employees will end up doing their routine responsibilities more effectively.
How can you implement the 20% Rule in your company? To begin with, it can be baked into job descriptions for many positions. In addition, a good CEO can include this in his or her evaluation of managers, so they know they are expected to encourage this approach.
To do this well, however, you will also need to appreciate the capacity of your human resources, and take care not to overload people with routine “must-do” tasks.
In the Simplified Strategic Planning process, we examine and budget time as a critical resource in implementation. This activity – in meeting three of the three-meeting schedule – is a great place to examine how the rule is being observed. It’s also a great activity to use to encourage appropriate use of the 20% Rule.
You may also want to take a moment to ensure your strategic objectives include some longer-term targets. One of the great benefits of strategic planning is that it can lead to much better execution on ideas that don’t create immediate benefits. You can use your strategic planning process to push your team farther into the future.
Have you used an approach like the 20% Rule at your company? How has it contributed to your strategic growth? I’d love to hear your stories and discuss how you might get even more benefit from such practices.