Anticipate Disruption And Prepare For It To Thrive In The Digital Economy


Industry disruption is not new, but it’s taking the stage in business vocabulary today. Why? Because the frenetic pace at which disruption is occurring has never been seen before. The rapid growth of the Indian startup ecosystem, the steady rise of unicorns from India, and the surging user base of Google, Facebook, Airbnb and Amazon are indicators of the state of play. The latest research from Accenture shows that more than two-thirds of Indian companies are affected by disruption, and an estimated $1.8 trillion of enterprise value could be displaced or migrate due to this disruption. What does that mean? It means that whether disruption is an opportunity for growth or a cause of obsolescence depends on how enterprises deal with it.


The first step to dealing with disruption is to understand it. This can be challenging because of the multitude of factors that contribute to it, and the complex correlation between them. The robust and growing repository of research reports and expert points of view can muddle things even more. Accenture created the Disruptability Index to address this specific problem. The index is a tool that can help businesses understand the disruption faced by their industry today and their susceptibility to disruption in the future. Armed with this knowledge, companies can then crack disruption and map a clearer path forward.

Take the banking sector, which is already experiencing above-average levels of disruption. Bad debts, combined with regulatory changes and new competitive threats, have compounded the pressure on Indian banks, making growth harder to achieve. Competition is coming from the ants and wolves, different but equally menacing threats. The ants are the mass of small, tenacious, nimble players offering services that are cheaper, more transparent and delivered differently. The wolves are the incumbents entering an existing territory, or new players challenging long-standing industry norms with new business models, tireless innovation and groundbreaking customer experiences.

It is also important to understand the myths that surround disruption—that it is random and unpredictable, beyond control and happens at an industry-wide scale. The truth is that disruption does not sweep an entire industry at the same time. Rather, it comes in predictable phases and can be managed. Our Disruptability Index defines business disruption through four distinct periods—viability, volatility, durability and vulnerability.

It helps to measure the current level of disruption and the susceptibility to future disruption. To unlock growth, businesses need to identify where their industry is positioned in relation to these periods and why. They then need to use this knowledge
to assess the likelihood and speed of future disruption. The more clearly business leaders see what’s changing around them, the better they can identify opportunities to create value from innovation for their business and rotate to the New.

Anticipate Disruption And Prepare For It To Thrive In The Digital Economy


To succeed in the digital economy, companies need to transform and grow their core business while simultaneously innovating to create and scale new businesses. Embracing digital is the key. Our research shows that disruptors in the consumer goods industry have digitalized 50 percent of their processes, compared with 27 percent for incumbents.

More specifically, organizations need to consider four strategies and calibrate them consistently and simultaneously:

1) Transform the core business to drive investment capacity. Build competitive agility and competitive cost structures to improve flexibility and increase profits.

2) Grow the core business. Use the new investment capacity and leverage digital technologies to gain new operational insights, activate new demand and expand into new markets.

3) Scale the new business. Develop a new innovation architecture inside the business, including innovation hubs, labs and ecosystem partners, to support the different levels of maturity of those innovations. The architecture is essential to move innovations from the startup community and make them scalable enough for large corporations.

4) Pivot wisely. The right balance is essential. Pivoting too quickly from the core to the new may cause a financial stretch, while pivoting too slowly could lead to obsolescence.

Reinvention is essential to ensure relevance for the future. It requires courage— to shake off the past, divest some parts, revitalize others and embrace the new. This is the mantra businesses need to adopt to shape their future and thrive.

*This is a sponsored article by Accenture