Gauging Business Disruption with the Disruptability Index | Accenture

Copyright © 2019 Accenture. All rights reserved.
Embrace the power of the wise pivot
BREAKINGTHROUGH
DISRUPTION

ATAGLANCE
• Industry disruption is
persistent and rising
• Playing it safe risks future
financial performance
• To succeed, companies must
make an “innovation pivot”
$41Tin enterprise value
is exposed to
disruption for
10,000 companies
in 18 industries*
Pivot out of
persistent disruption
(*) )% companies from sectors scoring above the weighted average on ‘current level of disruption’.
This equates to 4,889 unique companies with Enterprise Value (market cap + net debt) of $41tn (out
of $75tn). Sample comprises the largest (by revenue) 10,000 operating, publicly listed companies,
with 471 excluded because they are multi-sector holding companies or in industries out of scope.
2

C-suite mentions of “disruption” have
increased significantly over the past
decade . And with it, the anxieties of
executives across industries
“I’ve been living in this cozy world of
old brands, big volumes, nothing
changing very much…but now we are
being disrupted in all ways…we are
running to adjust.”
Jorge Paulo Lemann, co-founder 3G Capital
ADECADEOFDISRUPTION
Executives are aware of
the threat
71%of companies are
currently in, or
stand on the brink
of, significant
disruption
3

Measured industries’ current level
of disruption and susceptibility
to future disruption
Examined how the nature of
disruption has evolved since 2011
for 18 industry sectors
SO,HOWWELLARE
INDUSTRIESCOPING
WITHDISRUPTION?
Our research has…
4

83%of industries we
analyzed spent at
least five years in
the same period
of disruption
DISRUPTIONISA
PERSISTENTCONDITION
Industries fall within
one of four periods
of disruption:
5
Viability
The opportunity lies in growing
the core by offering new products
in existing markets, but also
existing products to new markets.
Durability
Period where companies
have a great opportunity to
seek and experiment with
new business ideas.
Vulnerability
This blind spot distracts many
from a great opportunity: scaling
up new ideas and venturing into
new markets.
Volatility
Most companies focus on
resolving pressing issues in the
core business; what’s much
harder is redirecting investment
capacity to grow new businesses.

INDUSTRIESARE
IMPACTEDDIFFERENTLY
6

Our research shows all industries
have taken action to reduce their
susceptibility to disruption. But, why
then are they still being disrupted?
Because they are taking proven,
familiar paths to respond, rather
than seeking out new terrain.
PLAYINGITSAFE—
ANDFALTERING
7

They don’t just protect their
position, they truly change it.
They Make an Innovation Pivot
THEREISA
BETTERPATH
Some companies confront disruption
in an unconventional way.
8

4WAYSTOSTARTAN
INNOVATIONPIVOT
Disruption informs when and
how to focus innovation efforts
Strategic considerations:
Create Your Next
Cutting Edge
Fund Your
Future Bets
Find Partners
to Scale With
Disrupt From
the Inside
when your industry is in
VIABILITY
DURABILITY
VULNERABILITY
VOLATILITY
9

Embrace new technologies to develop
potentially disruptive ideas, in and
outside of your current industry.
Createyournext
cuttingedge
If you’re in Software & Platforms, Communications
& Media, or High-Tech (Viability period)…
10

Progressively bolster and allocate
your innovation investments so you
can test and turn new ideas into
commercial realities faster.
Fundyour
futurebets
If you’re in Health, Life Science or Chemicals
(Durability period)…
11

Commit to scaling new ideas with
ecosystem partners who can
provide access to technologies
and specialized talent.
Findpartners
toscalewith
If you’re in Banking, Capital Markets, Industrial
Equipment & Machinery, Insurance, Utilities,
Automotive or Energy (Vulnerability period)…
12

Establish a specialized entity, such
as a “digital factory” to bring
meaningful innovation into your
established business.
Disruptfrom
theinside
If you’re in Consumer Goods & Services,
Infrastructure & Transportation Services, Natural
Resources or Retail (Volatility period)…

Leading companies push out of
their comfort zone to shape their
own future. They don’t just protect
their position, they truly change it.
EMBRACE THE POWER OF THE WISE PIVOT
HOWDOYOU
WININTHEAGE
OFDISRUPTION?
TIME FOR COURAGE
14

62 INDICATORS
10,000 COMPANIES
12M DATA POINTS
2011 TO 2018 TIME SERIES
Automotive, Banking, Capital Markets, Chemicals,
Communications & Media, Consumer Goods &
Services, Energy, Health, High Tech, Industrial
Equipment, Infrastructure & Transportation,
Insurance, Life Sciences, Natural Resources, Retail,
Software & Platforms, Travel, Utilities.
ABOUTTHERESEARCH
We used our own disruptability index to measure an industry’s
current levels and susceptibility to disruption
18 industry sectors
15
Disruptive Incumbents
Disruptive Start-ups
Disruptive Capital
Growth & Expectations
Profitability
Volatility
CURRENT LEVEL
OF DISRUPTION
DISRUPTORS
PERFORMANCE
SUSCEPTIBILITY TO
FUTURE DISRUPTION
DEFENCES
INNOVATION
EFFICIENCY
Transaction Intensity
Asset Intensity
Labour Intensity
Commitment
Digital Effectiveness
Positioning for the Future
Brand Prominence
Openness & Strength
Value Creation Potential
DISRUPTABILITY
INDEX 2.0

OMAR ABBOSH
Group Chief Executive,Communications,
Media and Technology Group.
PAUL NUNES
Global Managing Director of Thought
Leadership at Accenture Research.
DR. VEDRANA SAVIC
Managing Director of Thought
MICHAEL MOORE
Senior Principal, Thought
He serves on Accenture’s Global
Management Committee and was
previously Accenture’s Chief Strategy
Officer. He has extensive experience
in advising C-level and board-level
members across a wide range
of industries.
He focuses on technology–driven
innovation in business and marketing
strategy. His research has helped to
shape the company’s strategic vision
as well as its critical imperatives for
change, spanning three decades.
She has extensive experience in
strategy and management consulting,
and in financial services. She is a
thought leader focused on innovation
strategy, value creation in the digital
age, and corporate reinvention.
He has extensive experience
in strategy consulting, developing
growth strategies for energy
companies. His research looks
at how companies can understand,
harness and scale disruptive innovation
in support of inclusive growth.
16
ABOUTTHEAUTHORS
Our team is at the forefront of helping
organizations navigate a path through
disruption and pivot to the future.

VISIT www.accenture.com/decodedisruption
17Copyright © 2018 Accenture. All rights reserved.
Explore the three
preconditions
to enable your
Wise Pivot.
“Make Your
Wise Pivot”
Decode disruption to
power your Wise Pivot.
“Breaking Through
Disruption”
“Discover Where
Value’s Hiding”
How to unlock the value
of your innovation
investments.
TELLMEMORE

Accenture Research shapes trends and creates data-driven
insights about the most pressing issues global
organizations face. Combining the power of innovative
research techniques with a deep understanding of our
clients’ industries, our team of 300 researchers and
analysts spans 20 countries and publishes hundreds of
reports, articles and points of view every year. Our
thought-provoking research—supported by proprietary
data and partnerships with leading organizations such as
MIT and Harvard Business School—guides our innovations
and allows us to transform theories and fresh ideas into
real-world solutions for our clients.
Visit us at www.accenture.com/research
ABOUTACCENTURE
Accenture is a leading global professional services company,
providing a broad range of services and solutions in strategy,
consulting, digital, technology and operations. Combining
unmatched experience and specialized skills across more
than 40 industries and all business functions—underpinned by
the world’s largest delivery network—Accenture works at the
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their stakeholders. With approximately 477,000 people
serving clients in more than 120 countries, Accenture drives
innovation to improve the way the world works and lives.
Visit us at www.accenture.com
18

Gauging Business Disruption with the Disruptability Index | Accenture

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Gauging Business Disruption with the Disruptability Index | Accenture