The Resources-Processes-Values (RPV) Framework
The resources-processes-values (RPV) framework is a useful tool to understand why big companies fail in responding to disruption:
- RESOURCES are usually assets like technology, fund and people.
- PROCESSES are how organisations transform inputs (resources) into products and services.
- VALUES of companies, included in culture and ethics, are important criteria that companies consider when making decisions or priorities.
Put simply, these 3 factors decide what a company can or cannot do.
Surely, the Resources needed to create disruptive products are available to industries' leading companies. But, none of these companies remained atop after disruptive startups entered the market.
Why are these leading companies good at sustaining innovation but not at introducing disruptive innovation? The RPV framework can answer this question:
- Industry leading companies can introduce sustaining innovations using resources from time to time. These resources are aligned with their processes and values. Hence, they are successful in sustaining innovation.
- Disruptive innovations on the other hand require different processes from the ones leading companies use. Additionally, disruptive innovations are not consistent with leading companies’ values. Hence, leading companies may have the resources, but not the processes and values. That's why startups can be successful in disrupting these big companies and the market.
Source: Christensen, C. M. (1997), "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail", Boston, Mass: Harvard Business School Press.
