AgileSHIFT, one of the latest best practice solutions from AXELOS introduces a new concept, the delta. But what is it, and how do we use it?
The purpose of the delta is to illustrate how organizations need to think in order to be more resilient to disruption. If we look at the diagram below, the dark blue indicates the current position of an organization at any given time, and the green area is the gap between where the organization is, and where it could be. The light area is simply indicating work that the organization is doing in order to close the gap.
What is important is that disruptors will look for ways in which they can offer something you don’t offer between the current state and the target state that the organization wants to be. In the case of the diagram, the green area.
This could be anything from the same service for less, a completely new service, or a similar service in a different way which offers something new. For each organization it will be different, but it is highly likely that individuals within each organization have ideas about where threats may lie, or opportunities exist.
The delta represents the distance between where the organization needs to be, and where it currently is. The larger the gap, the more open that organization is to disruption. And the hard truth is that the target state will constantly move as new technology, ideas and working practices emerge. As we see in the diagram, as the organization changes, so does the delta. This could reflect new products and services coming to market, or new technology impacting the way the organization works.
So, in short, the delta can be understood by asking;
- Where is the organization currently?
- Where does it want to be?
- What is the organization doing to close the gap?
- Where does the organization think the target state will move to in the future?
For the latter section of this post I want to share a couple of well-known disruptor examples. I am not aiming to tell you something you already know but to illustrate how disruption happens in many ways (and not just through technology).
- Low-cost airlines; one of the great disruptor examples is the story of low-cost airlines. By maximizing efficiency (through minimizing time on the ground) and cutting out costly extras (such as check-in luggage and meals included as part of the ticket) budget airlines such as EasyJet and Ryanair were able to turn an industry on its head. Not only did they change the way many of us travel, they also forced premium competitors to change the way they operate. If we look at British Airways, it’s now no longer standard for every ticket to include check-in luggage and a meal.
- Streaming video services; perhaps the most famous disruptor story is the demise of Blockbuster (and other video rental stores) to firstly postal rentals and then Netflix and other streaming services. What Blockbuster failed to do was properly understand their target state; i.e. that they were in the business of providing entertainment, not physically located retail stores. By not understanding their target state, they didn’t see the gap until it was too late.
These two examples are obviously very well known, but in the context of the delta pose an interesting set of questions for many organizations.
To finish this post, I want to share one more thought on Netflix; although they are still a relatively young organization, they have already transformed themselves multiple times. In the space of a little over 20 years their core business has evolved from postal rental service, to streaming service to now arguably a film and TV studio. Their target state is constantly evolving, and the organization supports that move to reach it. They have demonstrated in a short space of time how one business can constantly evolve to meet the needs of their customers, and have seen the rewards of those efforts.
Read Tom Lynam's previous blog post for AXELOS about AgileSHIFT, How to be comfortable with feeling uncomfortable.