The concept of organisation capability can be broken down into three groups of factors to determine what an organisation can achieve or not achieve: its resources, processes and its priorities (RPP) deeply rooted in its business model. The RPP provides a useful way to access an organization’s capabilities and weaknesses.
Resources represent the physical aspects of the RPP framework. It includes all the people, equipment, technology, capital and so on. Resources are usually visible, flexible and measurable thereby enabling managers to plan.
Processes provides an overview of the interaction, communication and decision making that transforms inputs of various resources into products and services with greater value. It also include the ways that products are being developed the techniques used in procurement, resource allocation, staff development and so on are fulfilled. Process can be formal, informal or organization culture.
But often the cause of an innovation’s failure is that the wrong processes were used in managing its development and execution.
The third class of factors that affects what an organization can and cannot accomplish are the priorities embedded in its business model.’ Employees at every level make prioritisation decisions. Senior executives decide to fund certain proposals to invest in new products, services, and processes, and not to fund others. priorities embedded in the business model often represent constraint – they define what the organization cannot do.
The Migration of Capabilities
In the start-up stages of a business, much of what gets done is attributable to its resources
particularly its people. Over time, however, the organization’s capabilities shift toward its processes and the business model that defines what it can prioritize. As people work together successfully to address recurrent tasks, processes become defined. And as the business model takes shape and it becomes clear which types of business need to be accorded highest importance, priorities coalesce.
Culture is a powerful management tool. Culture enables employees to act autonomously but cohesively.
Hence, the location of the most powerful factors that define the capabilities and disabilities of an organization migrates over time-from resources toward visible, conscious processes and priorities, and then toward culture. When the organization’s capabilities reside primarily in it> people, change is relatively simple to manage. But when the capabilities have come to reside in its processes and business model and especially when they have become embedded in culture, change can be extraordinarily difficult.
Selecting the Right Organizational Home for Innovations
Organisations develop a capability for sustaining innovation that resides in their processes. On the other hand, disruptive innovations occur so intermittently that no company has a practiced process for handling them. disruptions are inconsistent with the leading companies’ priorities because they have the resources required to succeed at both sustaining and disruptive technologies. But their processes and the priorities that are embedded in their business models constitute disabilities in their efforts to succeed at disruptive innovation, In contrast, new companies are actually more capable of pursuing disruptive growth markets. lacking resources doesn’t constrain them. Their priorities can embrace small markets, and their cost structures can accommodate lower profits.
Teams to Fit the Task
Functional and lightweight teams are designed to exploit the capabilities resident in existing
processes and business models.” A heavyweight team is a tool to create a new process, and an autonomous team is a tool to create a new business model.
Heavyweight teams allow members to interact differently than they habitually could across the boundaries of functional organizations. Members bring their functional expertise with them as they join the team. But their mindset is to collectively figure out a better way to knit things together so that the over-all project is successful
A project is disruptive if the existing business units in a company cannot prioritise it, relative to other investments that they have the options of making.
Explaining and Resolving Complaints about functional silos
One of the most common complaints heard from people working in almost every organisation is that working in functional silos is the persistent source of headaches, errors, frustrations and delays.
executives managing innovation need to structure the proper team by starting at the highest required level in the hierarchy of organizational design, and then cascading downward through the issues at each lower level. It the project is disruptive to the priorities embedded in the firm’s business model, the project needs to be autonomous. The reason why most people work in silos is that the functional organization is the “default”
mode at the end of the cascade down the hierarchy, where the majority of recurrent tasks arise.
Autonomous business units and functional units tend to be the more permanent form of organization. Heavyweight and lightweight teams are temporary mechanisms.
What is disruptive to one company might have a sustaining impact on another.
Creating New Capabilities
The RPI model can be a useful guide for executives who determine that they need to create new capabilities because those that their organization presently has aren’t well suited for building new growth businesses.
But processes and business models can also be made or bought.
Making New Processes
Whereas lightweight and functional teams are tools to exploit existing processes, heavyweight teams are tools to create new processes.
Creating New Business model
Companies can develop the Capability to prioritize a disruptive opportunity only by setting up a new business unit with a new cost structure.
When executives force different business models together into a single unit in the name of “cost savings,” at least one – and often both- –of the business models is destroved.
Buying Resources, Processes, and Priorities
The RPP framework can be a useful way to frame the challenge of integrating acquired organizations. When one company acquires another, it buys its resources, its processes, and the priorities embedded in its business model. if the acquired company’s processes and business model are the real drivers of its success, then the last thing the acquiring manager wants to do is fully integrate it into the parent organisation.
If processes and profit model were the reason for its historical success, a better strategy is to let the acquired business stand alone, and for the parent to infuse its resources into the acquired firm’s processes and business model.
Evaluate critically the model deduced to help executives avoid disruptive growth in the development of their organisations capabilities
Disruptive innovation occurs when new products or services will fulfil their needs better than previous products — in a manner that is cheaper, faster or more pleasing.
New entrants are more likely to overtake established leaders in disruptive circumstances – when the challenge is to commercialize a simpler, more convenient product that sells for less money and appeals to new customers. Established companies, conversely, can capture disruptive growth (rather than be defeated by it), if they are aware of the circumstances of disruptive innovations and are able to leverage them for their own benefit if their priorities can embrace small markets, and their cost structures can accommodate lower margin dollars per unit sold. Their less formal market research and resource allocation processes allow managers to proceed intuitively rather than having to be backed up by careful research and analysis, executives who are building new-growth businesses therefore must ensure that responsibility for making the venture successful is given to an organization whose processes will facilitate what needs to be done and whose business model permits prioritization of those activities. The theory is that the requirements of an innovation need to fit with the host organization’s processes and priorities, or it will not succeed
Teams to Fit the Task
Functional and lightweight teams are designed to exploit the capabilities resident in existing processes and business models. A project is disruptive if the existing business units in a company cannot prioritize it, relative to other investments that they have the options of making. In such cases, an autonomous team is a tool to create a new economic model that can prioritize and profitably serve the new targeted market.
If the project is disruptive to the priorities embedded in the firm’s business model, the project needs to be autonomous. Within this unit, products and processes with the appropriate architecture can be developed; the way they must interface can then be defined; and the components or individual steps in the processes can then be designed. If the project sustains the organization’s priorities, then autonomy isn’t desirable, but if different people need to interact with different people over different issues with different timing, then a heavyweight team is the necessary starting point;
Companies can develop the Capability to prioritize a disruptive opportunity only by setting up a new business unit with a new cost structure. Charles Schwab, for example, set up its disruptive online brokerage venture as an autonomous organization, the corporation’s cost structure, and thereby its priorities, were transformed by launching a successful disruptive enterprise. Separation was a much simpler way to create a new business model rather than transforming the business models of existing units.
Fig 1. The disruptive innovation model
If a disruptive innovation is recognized, existing businesses are often reluctant to take advantage of it, since it would involve competing with their existing (and more profitable) technological approach. Christensen (2003), recommends that existing firms watch for these innovations, invest in small firms that might adopt these innovations, and continue to push technological demands in their core market so that performance stays above what disruptive technologies can achieve.
Generally, every organization has a business goal that is success in doing business, which is mainly achieved by quality product and services to the customers. However to improve quality, quality management is a necessity. Standards of quality management include recommendation and guidelines for quality management system including organizations procedures, structure, process and other successful means of quality management.
Use of quality tool in process industry: Although a research shows the possibilities and usefulness of all the seven tools of quality. Systematic usage example of quality tools is shown in system that includes process of dealing with the customer claims in communication with the customers. Corrective and preventive actions are taken as soon as a customer claim of dissatisfaction is received. An appropriate claim of all undertaken activities report is prepared and informed to the customer in written form. For three consecutive years the numbers of customer claims are collected. Claims are systematically examined at the end of each year so that the type and number of claims can be analyzed for that particular year in consideration and also to verify the effectiveness of all the undertaken corrective and preventive actions are analysed as well. Histogram is the broadly used tool to visualized collected data.
In the following examples it is shown that how a simple graphical visualization can present data clearly and help in decision making process.
2004 2005 2006
[Fig 1: Histogram of claims on damaged Cement bags.]
The figure above shows the damage of cement bags during the transport of three consecutive years, which has been increased continuously. We can also conclude that the corrective activities taken by the company in solving problem was not successful as well; so further actions should be taken in company section which deals with the transport of cement. To find and eliminate the root cause of damage of the transport of cement bags an improvement team with experts should be formed.
Apart from previous example, examining the customer claims on wet cement bag, the claims have decreased in three consecutive years by the corrective action taken.
2004 2005 2006
[Fig 2: Histogram of claims on wet cement bags.]
After many unsuccessful attempts the solution to solve the problem was found, new machines were installed in the beginning of the year that wrapped cement bags in plastic foil. The action taken proved successful and the number of claims on wet cement bags decreased to minimum.
The examples above demonstrates the systematic use of Histogram, collective data has been examined and visualized by Histogram.
The other quality tool that can be used in organization is the check sheet which is also known as Data Collection sheets and Tally Charts. Check sheets are relatively simple and non-Statistical like flow charts. To make decisions based on facts check sheets are used to obtain data in a formalized, reliable and manual way. Whatever data is collected it is transformed in a graphical presentation. Areas of improvement can be detected, either directly from the check sheet or by inputting the data in to one of the other basic quality tool.
To capture the incidences of the variables to be measured a simply table is designed; in the relevant boxes tick marks are manually put. They give a graphical presentation of the frequency of the incidences as the ticks build up.
Source: Tague, 2004
Develop and discuss a Quality plan for which the RPP framework (Resources, Process and Priorities) can be utilized by an organisation to gain competitive advantage within 3 months.
A Quality Plan is a way to identify your client’s expectations for quality and the management’s plan to make sure that the expectations are met. The Quality Plan is also the place to describe the processes and activities that will be put into place to ensure that quality deliverables are produced.
The Quality Plan contains the following information.
Organization analysis and Consultation. When carrying out a quality plan, the first step should be to analyze the organization for which the quality plan is been carried out. This will include an analysis of its Strengths and weakness, opportunities and threats. (SWOT)this will provide an opportunity to better understand the processes and the organization capabilities. Also there is a need to consult with current clients and would be clients if possible. This will provide an opportunity to better understand the market requirements so that adequate provision can be made in the quality plan. This can be achieved by the use of questionnaires and surveys.
Strategy: A plan of action would then be formulated to implement the quality plan taking into consideration the market requirements, organization goals and other relevant factors that could provide an input to the quality plan. This plan of action is going to be for a period of three months.
Budget and Schedule. The costing and schedule for the project plan has to be evaluated in order to put necessary control mechanism in place. A budget that is approved by the organization management is important to the success of the project plan and also the time line for the execution of the of the project plan has been agreed to be three months. Over this three months, the quality plan will be monitored and evaluated.
Quality tools. This describe the tools that will be used utilized to help manage and control quality on the project. Example of the quality tools include histogram, check sheets and so on.
Program Monitoring and Evaluation Framework. This will be a final step in the quality plan to access the impact of the quality plan on the organization, their market place and clients over the three month period. Necessary adjustments or improvements will be made if necessary.
The RPP framework has been seen to play an important role in organisations by the knowledge that it is deeply rooted in organisation’s business model. The RPP provides a useful way to access an organization’s capabilities and weaknesses.
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