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The Resources-Processes-Values (RPV) Framework
Akshay Nirmal, Business Consultant, Australia
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:
- The industry leading companies can introduce sustaining innovations using resources with time to time, which are aligned with the companies’ processes and values. Hence, they get success in sustaining innovation, an example of this is Microsoft.
- On the other hand, disruptive innovations require different processes from what leading companies follow. Additionally, these innovations are not consistent with leading companies’ values. Hence, leading companies having just resources but no processes and values let startups get success in disrupting these big companies and the market. An example of this is Blockbuster disrupted by Netflix.
Source: Christensen, C. M. (1997), "The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail", Boston, Mass: Harvard Business School Press.
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