For nearly all organisations Digital Transformation represents a fundamental shift in almost everything they do. The challenge facing the organisation is how to make sense of this shift, and what it means for every part of the organisation.
They need something to assist them and their organisation. They need a common structure and language that can be used to understnd the impact on their people and functions. This will allow everybody to frame, analyse and discuss how transformation will impact them.
While there are many frameworks that could use, a lot are overly complicated, and not always accessible to all levels of the organisations. The model proposed in "Meeting thechallenge of Disruptive Change" by Clayton M Christensen & Michael Overdorf*remains one of the simplest and most effective available.
In this model it is proposed that any organisation that is looking to transform needs to ask 3 questions:
- Does it have the right resources to transform?
- Does it have the right processes to transform?
- Are the right values in place to allow transformation?
These 3 questions provide a simple approach to understanding not just the capability that exists to transform but also the impact (size of change) that the transformation will have on the organisation, a function, team or individual.
Lets look at each attribute in more detail.
Resources
This attribute refers to the tangible and intangible assets that a company can use to perform its activities. Resources include people (talents, skills, knowledge), equipment, technology, brand, customer relationships, financial assets, and even information like market data or intellectual property. Effective management of resources involves not just having access to these assets but also being able to deploy them where they are most needed, especially when exploring new opportunities or innovations. For companies dealing with disruptive change, this might mean reallocating or acquiring new resources that align with the innovation.
Processes
Processes are the patterns and methods by which work is performed, including the ways resources are used to create a product or service. These include manufacturing processes, budgeting, planning, and development methodologies, among others. Processes determine how daily activities are carried out and how decisions are made. In the context of disruptive change, existing processes may need to be altered or entirely new processes created to be more agile or responsive to market demands that differ significantly from the company’s traditional markets.
Values
Values in an organizational context refer to the criteria by which decisions are made, priorities are set, and trade-offs are judged. Values influence every aspect of organizational behavior, including what products get developed, which markets are pursued, and how resources are allocated. They are often deeply ingrained in the corporate culture and can be challenging to change. For an organization facing disruption, aligning values to support innovation and risk-taking is crucial, as traditional values may prioritize existing customers and demand patterns, potentially ignoring new growth opportunities.